Hot summers or very cold winters can also cause gas prices to rise. Although there is plenty of natural gas underground ready to be drilled, the low cost of gas in recent years did not provide an incentive to increase the supply. With today's higher costs suppliers are drilling again, but it can take up to 18 months for this gas to reach the markets where it is needed. It may take even longer for new supplies of gas to significantly impact the price customers pay. As a result, supplies of natural gas drilled this year won't be available in time to reduce the price customers pay this winter.
Customers here have some advantages.
PNM has already contracted for sufficient supplies of natural gas for this winter. And because PNM is located between two of the country's largest gas-producing basins, customers pay slightly less for gas due to lower transportation costs. Although PNM will be billing customers more for gas this winter, the company does not make more money when the price of gas goes up. On a customer bill, the cost of gas component pays for the gas delivered to homes and businesses. Like other utilities, PNM does not add a profit margin to the price it pays for gas.