Energy & Environment

Consumers in Houston and across Texas may experience sticker shock after opening their gas bills this month

Local gas companies like Center Point pass the wholesale price of natural gas, which has been up, onto the consumer.


CenterPoint Energy says its executives will discuss the impact of the recently-passed tax cuts during an earnings call in late February.

Gas bills are shockingly high this month, but not because of anything consumers may have done differently in December. There are two main reasons for the higher-than-normal gas bill prices, according to Ed Hirs, an energy fellow at the University of Houston.

To start, local gas companies like Center Point pass through the wholesale price of natural gas, which has been up, onto the consumer.

"Really from about March to the end of the year, the wholesale price was more than double. In some cases, three or four times of what the wholesale price was of last year and the pass through, of course, is painful."

Hirs said CenterPoint has no control over the price, rather the wholesale trading market determines cost.

The cost in the wholesale market of purchasing natural gas went up because of a big jump in demand for export, from the LNG export facilities that run along the Texas-Louisiana gulf coast. This was due to gas supplies to Europe being cut off by Russia because of the on-going war in Ukraine. Europe turned to Liquid Natural Gas Market to shore up their winter supplies, which worked, but at a very high price.

Another component of the higher than usual natural gas prices consumers are paying is due to the requirements from the Railroad Commission, CenterPoint and other gas utilities to weatherize which is expensive. And under the rules, the utilities are allowed to pass those increased expenses through to the consumer.

Why the upgrades? Hirs says, "The freeze of 2021 caused a number of issues where these utilities were unable to deliver gas to residents and to commercial businesses. So these requirements, the remediation, the rebuilding of the natural gas grid are getting passed along to the consumer and that is part … of the bill we pay in every month.”

Hirs says he expects the natural gas market to level out for much of 2023.

“The primary reason is that we have plenty of supply in the United States and makes plenty of money."

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