Another of My Posts From Last Summer

I wrote:


Wednesday, August 1, 2007
Duke Energy...Hedging
Greg Kearns of Duke Energy's Gas Supply Department graciously called me August 1, 2007 @ 2:35 pm. They have a Hedging Plan which is a "% of base," meaning residential and small commercials. Larger customers take care of themselves and Duke does not have to supply their gas, except for transporting it.

Duke May do 5% 1 year ahead. Committee meets once a month.

Duke is very careful not to fall into a trading mode.

So...Question...What will be the cost of natural gas to the residential user in January? $8.41 (NYMEX futures) + $2.00 for Duke + misc incomprehensible things = $10.60, say. Or, to convert to the way the customer sees it on his bill, $1.06 per ccf.

BUT THAT'S USING THE NYMEX FUTURES, which Duke doesn't trade. (They only buy from their established private sources, which are long-term gas suppliers.)

My guess for next Winter, then... $1.15 per ccf.

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Now I wonder if Duke couldn't have done us a little better.