Good news for Massachusetts residents with natural gas heating systems: National Grid is dropping its prices nearly 5 percent as of Dec. 1.
For the average customer, the new price reduction will mean a savings of about $6 to $8 a month. The gas utility also dropped its prices slightly on Nov. 1, meaning the total bill for heating customers should be down between $11 and $15 a month this winter.
"As we head into the holiday season, we are happy to share this good news with our customers," Marcy Reed, president of National Grid in Massachusetts, said in a statement.
The company attributed the drop to lower natural gas prices and a sale of excess gas supply during warmer months. In September, the company said its electricity prices this winter would be about 10 percent lower than last year.
National Grid distributes natural gas to about 925,000 Massachusetts homes and businesses. Around 51 percent of Massachusetts households, concentrated in Eastern Massachusetts, use gas for heating, according to 2014 Census estimates. About 28 percent of the state's homes are heated with oil furnaces, compared to about 15 percent that heat with electricity.
National Grid warned that despite the lower prices, New England's gas pipeline capacity is still too low, which could cause spikes in regional electricity prices. Heating customers have priority use of pipeline capacity, but electricity generators must pay market prices, which have been volatile. The company called for additional pipelines to be built, in addition to expanding renewable energy sources.
"While this additional savings certainly can help, we remain concerned about energy costs for our customers," Reed said in the statement.
The falling prices are in part the result of a boom in oil and natural gas production and weakening worldwide demand that is creating a global glut of fossil fuels.
For example, crude oil was trading below $42 a barrel in New York Tuesday, far below its recent peak of about $108 in 2014.
The fall in energy prices is boon to consumers and boost to the US economy, according to economists. But the declines also have some environmental advocates worried. When energy prices are cheaper, consumers feel less compelled to conserve, advocates say, increasing greenhouse gas emissions and contributing to global warming.