American Electric Power Company CEO: 'Lower Natural Gas Prices Really Balances Our Portfolio'

If there is one commodity that even speculators fear, it has to be natural gas prices. The wild fluctuations seen in the prices of natural gas over the years have prevented many from forecasting its future. However, since the time the prices have come down, energy producers and utility companies have been making hay while the sun shines.

American Electric Power Company Inc AEP CEO, Nick Akins, was on CNBC Thursday to explain how lower natural gas prices are impacting the company’s customers.

A Great Thing

“Certainly natural gas has very big impact on our customers [that] from a fuel cost perspective,” Akins said. “Our fuel costs [is passed] through the customers, so, whenever natural gas prices are lower it’s a direct benefit to the economy and to our customers and really is a value to us because as we go through in the use of our portfolio, we are using less coal, more natural gas and more renewable and so forth. So, it really balances out our portfolio. So, it’s a great thing.”

A Double Positive  

Akins was asked if after years of wild fluctuations, natural gas prices will remain low for considerable amount of time due to over production. He replied, “Yeah absolutely, in the past before shale gas activities were occurring, natural gas was running $11, $14 MMBTU, but today getting above $3 is a particular challenge and you think about the conversion rate with natural gas units they are much more efficient than other types of generation units. So, it turns out to be a really a double positive for our customers.”