Boosting Your Reserve Fund- Naturally
At this time of year, our clients’ minds invariably turn to high energy costs. With ‘heating season’ upon us (October 1-May 1) and both heating oil and natural gas’s recent summer peaks fresh in our minds, owners of commercial buildings, and condo/co-op board members are looking to make sure that their budget is big enough to keep their property or home warm. If they seize the opportunity this year, they could find that budgets are big enough to heat their places and protect them from a rainy day.
Natural gas seems to be an area attracting a lot of attention within the scope of energy costs. As I write this, natural gas prices, despite doubling during the summer, are currently lower than they were a year ago (see chart below).
That puts Natural Gas prices at levels lower than most of 2007, 2006 or even 2005.
This helps us at OGI Management answer a question than many clients frequently ask: “How do we increase our reserve fund?”
If boards or owners have increased their budgets for the 2008-2009 heating season based on prices from earlier in the year, this is a good time for us to lock in today’s price. The difference between today’s price and the price they had budgeted for can be used to build up reserves. We can help property owners with the best programs for cost savings and flexibility.
*Perhaps you’re not aware that New Yorkers can choose which company to buy natural gas from? We sort through the providers to find the best deals.
**Many gas providers offer the opportunity to buy at today’s rate for the entire season, year or multiple years. This is called locking in a rate. Clients can alternatively choose to “float” and pay the utility’s going rate, which eventually moves up or down with the market. That said, long-term (or mid-term) price movements can be hard to predict but are expected to rise over time.