National Grid, which serves about 800,000 gas customers in Massachusetts, proposed its own rate cuts at the end of last week. It would cut supply costs by 16 percent and overall bills by about 6 percent for the average natural gas residential customer.

NStar, the Greater Boston utility giant, is proposing a rate cut that would lower the average customer’s natural gas heating costs by about $15 a month from current rates and $30 monthly from rates in effect last winter. Fuel costs would fall by 16 percent, but overall bills, which include transmission costs, would decline by about 10 percent, on average, for NStar’s 300,000 gas customers.

Good news for many people who heat their homes with natural gas in Massachusetts: Your price for fuel is going down. Again.


None of that should come as a big shock because natural gas prices recently have sunk to a decadelong low. A mild winter and huge amount of new natural gas supplies extracted from shale around the United States are having a dramatic impact on prices.

The weather will be changeable. Bountiful supplies of gas are likely to be available for the foreseeable future.

Natural gas prices have soared and plunged several times in the past decade. They fell hard in 2009 - from a peak of nearly $14 per million British thermal units - due to weak demand from a hobbled economy, among other factors. Prices bounced back to about $6 by the start of 2010 but have been falling ever since and finished yesterday at just $2.53.

“The flood of supply is just gushing into the market and driving the price down,’’ says Bob Ineson, senior director for global gas of IHS Cera, an energy consulting firm.

Gas won’t remain this cheap indefinitely. Some want to export all the gas being produced in excess. More importantly, current market rates are lower than the cost of drilling for the gas and that’s unsustainable.


But there will still be plenty of natural gas available in America and prices, though perhaps not this low, should remain very attractive.

“People are looking at prices that are in the mid $2s to around $4 over the next few years,’’ says James Daly, director of electric and gas energy supply at NStar.

In New England, cheap natural gas is especially good news that extends beyond lower home heating costs. The region uses gas to generate more than 42 percent of its electricity - nearly double the national rate - and the cost of that power is going down, too.

The connection between cheaper natural gas and lower electric rates is harder to follow due to a blend of fuels used to generate power, the cost of separate transmission expenses, and other factors that blur the simple story of falling commodity prices. Staggered contract periods that limit the risk of electricity price shocks also slow the impact of cheaper gas.

But there’s no missing the big trend. Take a look at the important elements that go into an electricity bill at NStar to see how that works.

Customers paid 12.7 cents per kilowatt hour, before delivery costs, for their power as recently as January 2009. They are paying 7.9 cents for the same electricity now. But delivery costs amount to another 8.1 cents per kilowatt hour, and they have trended modestly higher in recent years.


Step back, and you’ll see energy costs falling by about 38 percent over the past three years. But delivery costs that account for about half the total NStar electricity bill blunt the impact of cheap gas.

The total savings make a real difference, especially for businesses that consume lots of power. Big companies often complain that New England’s historically high electricity costs make it much harder for them to earn a profit here. That expense is significantly lower today, thanks to much cheaper natural gas.

Massachusetts is still an expensive power market compared with the rest of the country and that remains a competitive problem for commercial users. But customers are paying less for a key service.

No doubt natural gas prices will begin to recover over the next year. Drillers will produce less and consumers will use more. But the big trend of cheaper gas - and all the economic advantages that come with it - will be felt for years.

Steven Syre is a Globe columnist. He can be reached at syre@globe.com.