IGS ENERGY – Is it smart to lock in a price for natural gas?

Right now I am paying .35 per CCF If I were to sign a contract with IGS Energy I would pay .499 CCFthe first year, decreasing to .47 the second year, and 1.45 per CCFthe third year.

Is it smart to lock in a price for natural gas that is .15 cents MORE then what I am paying now with no guarantee natural gas prices will increase?

AKA are natural gas prices GGUARANTEEDto rise in the next three years? I was under the impresison natural gas was cheap and plentiful.

3 Responses to “IGS ENERGY – Is it smart to lock in a price for natural gas?”

  1. Hannah's Grandpa Says:

    If you look at T Boone Pickens plan, it calls for CNG powered cars, and CNG is natural gas, whether this will drive the price up, (if it catches on) or not, I think that depends on whether the price of gas goes down or not, also whether or not electric cars also catch on or not.

    As for my self, I would take mu chances, stick with the current low price, and if the price did go up past the $1.5 price, I would start looking into an alternative power source.

  2. William W Says:

    That’s a great question. By rights it shouldn’t go up more than the cost-of-living increase. That doesn’t seem to be the case, however.

  3. paul Says:

    It is just like investing money. Is the stock market going up or down? Is gold going up or down? What is a barrel of oil going to be in 3 years? No one can tell you. But the gas company can make better guesses than you can. Do you want to bet against their guess? They could be wrong.

    Locking in prices is a good business practice. If you make widgets and you can make a profit if you pay $1.50 CCF but you would lose money at $1.55CCF, you may want to lock in the price so you still make a profit. Even if it means you make less of a profit today when it is at $1.35CCF.