By 2010, it is projected to be more than 30 percent over the 1998 level. In addition to the national demand picture, Texas natural gas consumption has been increasing steadily over the last six years. The biggest driver for that growth is gas-fired electric generation. When natural gas costs increase, consumers face higher bills. When natural gas costs decrease, consumers pay less.
Utilities make their profit from distributing the natural gas to consumers.
In most cases, the rate that a utility charges for distributing natural gas is approved by the city in which it serves, but in some cases the rate is approved by the Railroad Commission of Texas. The cost of natural gas is market based, subject to the forces of supply and demand, and changes frequently. The major cause of recent high natural gas prices has been uneasiness in the marketplace over natural gas supply. Simply put, the injection rate of gas into storage was too slow to comfort the market for this winter's heating season. Consumption of natural gas in the summer is usually relatively low, which allows excess gas to be injected into storage.