Natural Gas Winter Outlook - courtesy of the Gas Company Analysts are predicting continued higher natural gas prices this winter. The commodity price increase is due to several factors, including: increased demand, decreased production (caused in part by the recent 2004 hurricanes), higher crude oil and gasoline prices and a colder-than-average winter weather forecast for parts of the nation. Based on current industry price projections, a typical single-family residential monthly bill for 75 therms of natural gas could increase to between $90 and $100 this winter as compared to $70 last winter. Customers living in an apartment or condominium can expect their monthly average winter bill for 30 therms to be in the range of $35 to $40 as compared to $28 last winter. We strive to purchase natural gas at the best prices, and we store natural gas to help offset commodity price increases for our customers. While we will continue to do everything possible to help keep your gas costs lower, here are a few energy-conservation tips you can do as well: • Your furnace and water heater account for the majority of your natural gas bill. Be sure to “focus on your furnace” by lowering the thermostat 3 to 5 degrees, or turn it off when you’re away from home. Keep your furnace operating efficiently and check your filter monthly during times of use. You can also lower the setting on your water heater thermostat, to help keep your bill lower. • Make energy efficiency and conservation a priority. Find out about rebates available from The Gas Company on the purchase of new energy-efficient appliances. • Visit our online Home Energy Efficiency Survey for a personalized assessment of your home’s energy usage, along with ideas about how to improve its energy efficiency. • We have programs that can help for customers with special needs such as rate discounts and energy-saving measures for income-qualified customers, and an extra allowance of gas for customers with certain medical needs. Natural Gas Price Update Effective December 1, 2004, the procurement component of the core sales rate will decrease 11.194¢/therm to 60.815¢/therm. This decrease resulted primarily from a 10.017¢/therm, or about a 13.8% decrease in commodity prices. Compared to a year ago, the procurement rate is about 36% higher (16.098¢/therm) than what it was effective December 2003. Combined with the transportation rate, core residential and C&I sales customers will see about a 11% rate decrease from last month. Understanding Natural Gas Prices Your natural gas rate includes two primary charges: Gas delivery service, which The Gas Company provides - the "delivery" or "transmission" charge; and, The cost of the natural gas itself -- which is reflected in the "procurement" charge. Many people believe that The Gas Company produces natural gas, but we don't. For our residential and smaller business customers, we buy natural gas from producers and marketers at the best possible prices on the open market. The wholesale gas prices we pay are based on market supply and demand. They're not marked up by The Gas Company, and are shown on your monthly bill as the "current cost of gas." The Gas Company's delivery service charge covers the costs of transporting natural gas through our pipeline system. It is approved annually by the California Public Utilities Commission and is not impacted by the price of natural gas. For more information regarding monthly gas prices, including what you can do to lower your energy costs, see the following topics: • Bill Q&A; • Monthly Gas Procurement Price (shows the most recent gas procurement rates); • Energy and money-saving tips and programs for homes and businesses; • Gas Rates/Tariff Book.