Local Utility‘s Proactive Gas Purchases Shield Customers From Soaring Energy Costs
Decatur Utilities (DU) customers will largely avoid projected spikes in natural gas prices thanks to a long-term hedging strategy employed by the city-owned utility, officials announced today. While market forecasts predict natural gas prices climbing above $4.50/dekatherm (one million BTU) in 2026-2028 – a significant jump from current levels – DU has secured gas at an average price of $2.93/dekatherm through March 2026.
The proactive approach, years in the making, demonstrates the benefits of public utility ownership, prioritizing customer savings over shareholder dividends. “For many years, DU has strategically purchased future volumes of natural gas, especially those volumes needed for usage during winter months,” explained Gary Borden, DU Operations manager. “By making these bulk purchases when prices are lower,we were able to minimize the impact of market volatility.” Had DU not secured these lower wholesale prices, customers would have faced substantially higher retail rates.
DU hedged approximately 80% of its natural gas needs over the past five years. the utility’s success in mitigating price fluctuations stems from the dedicated work of Borden adn Debra Curtis, DU’s Energy Supply Coordinator, who continuously monitor gas markets for advantageous purchasing opportunities. Spot market prices reached a high of $12.44/dekatherm in August 2022, highlighting the potential for significant cost increases without proactive measures.
“DU is fortunate to have an in-house expert purchasing gas on behalf of our customers,” said Ray Hardin,DU General Manager. ”This winter, we will see the benefits of purchase decisions that were made over the past 2 years.” Hardin further emphasized that DU’s hedging program has consistently resulted in the lowest retail natural gas rates in the state.
Borden added that while current market volatility presents challenges to securing future gas contracts at competitive rates,the team remains committed to identifying opportunities to benefit customers. “We are not trying to produce a dividend for stockholders, but working for the customer,” Borden stated.”This hedging program is just one of the ways we strive to make sure our rates are kept as low as possible for everyone.”
