Gas Contracts

[BMWHD3060]

How Many Mat Owners Have Future Gas Contracts, my two year gas contract just ran out, I was paying .86 cents a therm & just got my new gas bill it has jumped to $1.26 a therm in one month & now will vary every month with gas futures on the rise.

Now What, 1 minute per quarter? I'm at 5 minutes per quarter, now thinking of 4 minutes per quarter, If I have to drop it again I will go to 50 cent starts.
I fell a little better, until I get my nexts months gas bill. /ubbthreads/images/graemlins/shocked.gif

[Adamski]

Mike,

Rather than lock my laundromat into a gas contract, I chose to simply buy my gas from my local natural gas distribution company at whatever rate they have available. Therefore, my gas costs more or less follow the market up or down and I price my equipment accordingly. I've been satisfied with this system for the past 39 years.

I also hedge my laundromat by owning Vanguard Energy fund at the same time. The substantial investment I have in this fund takes the sting out of wild increases in gasoline or natural gas costs.

Larry /ubbthreads/images/graemlins/cool.gif

[Jimedean]

do you constantly adjust your dryer price according to the market?

[Adamski]

Jim,

My current thinking is that dryer prices are too low in our industry as a general rule. We've raised our washer prices more often over the last 50 years because customer acceptance of dryer price increases was more troublesome.

Base on our utility costs and square footage required, I think our dryers' receipts should EQUAL our washers' receipts. Therefore, my plan is to leave my washer prices where they are and continue to gradually increase my dryer prices until their receipts equal my washers' receipts. I last raised my dryer prices on January 2nd of this year (6 min/qtr = 30 lb, 5 min/qtr = 35 lb dryers).

Larry /ubbthreads/images/graemlins/cool.gif

[BUTTERHEAD]

Mine varies month to month as well. I pay the closing NYMEX price plus $0.0699, plus taxes, transportation, etc.

So, when the prompt month stops trading 3 days before the end of the month 1, I will normally be paying this closing price as a base when I get my month 3 bill.

Like fixed cycle pricing on my dryers, I have had this type of contract ever since I got in the laundry business.

As well, I just raised my dryers to $1.50 for 32 minutes for my 30# stacks and $2.25 per 32 minutes for my 45# stacks. A few complaints, but most understand with food and fuel prices going up. My attendants have the story line down pat.