Seasonal changes in the cost components can lead to unusual outcomes, such as lower prices per unit in the winter than in the summer. The price of gas includes fixed cost components in transmission and distribution that are charged regardless of the level of consumption. As a result, the per unit cost of gas may increase as the amount of gas consumed declines. Lower wellhead prices of gas, generally seen in non-peak summer months, are often insufficient to offset an increase in per unit prices resulting from fixed costs being allocated over a smaller number of units consumed. Therefore, even though overall costs are lower for residential users during the summer months, their per unit costs are often higher.
Total cost is determined basically by multiplying the volume consumed by the unit price.
A contributing factor was the relatively low storage levels going into that winter. These lower storage levels led to prices sufficiently high to increase total expenditures. The reverse can also happen. Diminished volumes of natural gas in storage reduce volumes that can be withdrawn and, especially in the early months of the heating season, make operators cautious about removing gas from their diminishing inventory. Constraints may occur along the pipeline delivery system.