In a major piece of its winter readiness program, PECO has completed
filling its natural gas storage facilities to serve Philadelphia area
customers in the coming heating season. The storage capacity covers
supplies for the coldest peak demand days, contributes more than
one-third of PECO’s overall gas portfolio, and hedges against wholesale
market price increases during the heating months.
PECO delivered 83.7 billion cubic feet (bcf) of gas last year to its
485,000 customers in the Philadelphia suburban counties. About
three-fourths of the utility’s typical gas sales occur during the
heating months.
“We have sufficient gas supply to reliably meet the needs of our
customers this winter and for the year ahead. PECO arranges its gas
supply in a number of ways to provide the best available price for our
customers,” said Carlos Thillet, PECO manager, Gas Supply &
Transportation.
PECO encourages its customers to get ready for winter, too. Homeowners
should get their house heaters inspected and cleaned regularly, replace
the air filter for the heater, and look for ways to weatherize the home.
Many simple steps can ensure heater safety and efficient operation, as
well as comfort and cost savings. Visit www.peco.com/save
for more winter energy saving tips and information on customer
assistance programs.
PECO operates a liquefied natural gas storage plant, located in West
Conshohocken, Pa., which has a capacity of 1.2 billion cubic feet (bcf)
of gas; a propane gas storage plant in Chester, which has a capacity of
1.68 million gallons; and eight contracts for storage of 22.9 bcf of gas
along interstate pipelines. The gradual process of refilling the various
storage facilities began in April shortly after the last heating season
ended.
Carlos Thillet, PECO manager, Gas Supply & Transportation, will speak on
the company’s winter readiness activities at a meeting with the state
Public Utility Commission (PUC) in Harrisburg on Thursday, Nov. 5.
Thillet said PECO purchased gas for storage during the non-peak demand
months at a significantly lower cost than the gas purchased and stored
for last winter.
PECO establishes its gas rate on December 1 of each year based on
current and projected supply costs for the next year, under regulations
set by the PUC.
While PECO’s current gas rate is approximately $1.07 per hundred cubic
feet (ccf), or about 10 percent less than last year, it is not yet known
what the Dec. 1 gas rate will be. Then, PECO can only adjust its rates
on a quarterly basis based on any changes in wholesale market prices,
unlike retail dealers for gasoline and oil.
Thillet said about half of PECO’s winter gas commodity costs is based on
current market rates set by daily, weekly or monthly market indexes at
the time the gas flows on the interstate pipelines to the Philadelphia
area. The prices of the other half of winter deliveries is based on the
non-winter purchases for storage and gas priced in the futures market to
protect customers from any volatility in the wholesale market.
In addition to securing ample gas supply, PECO said it invested $11
million on upgrading underground mains and services with larger
facilities to meet increased demand in certain areas. The capital
investment will ensure improved gas service during winter for 24
communities across the suburbs. The company also spent about $6 million
on other gas main replacements for better service reliability, fewer
leaks and odors.
Based in Philadelphia, PECO is an electric and natural gas utility
subsidiary of Exelon Corporation (NYSE: EXC). PECO serves 1.6 million
electric and 485,000 natural gas customers in southeastern Pennsylvania
and employs about 2,400 people in the region. PECO delivered 83.7
billion cubic feet of natural gas and 39.4 billion kilowatt-hours of
electricity in 2008. Founded in 1881, PECO is one of the Greater
Philadelphia Region's most active corporate citizens, providing
leadership, volunteer and financial support to numerous arts and
culture, education, environmental, economic development and community
programs and organizations.
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