Question-and-Answer Session
[Operator Instructions]. And your first question comes from the line of Gordon Howald with Calyon.
Gordon Howald - Calyon Securities
Hi, guys. Good morning. I apologize if you’re asked this because I got interrupted a couple of times during the conference call, but at retail, I understand that you set your? the retail tariff at the beginning of each month. Now gas prices rise, you utilize storage gas to meet your customer need. Isn't there a way to hedge that exposure that you have on a monthly basis rather than subject shareholders and subject to yourself to the changes, the swings on a monthly basis in natural gas prices? Am I missing something or am I looking at this properly? How do you go about hedging that?
Andrew W. Evans - Executive Vice President and Chief Financial Officer
You're looking at it properly, Gordon. There are sort of two issues there. You can have rising prices during the period and you can have volumetric change due to weather. Weather was an item this year that we hedged pretty heavily, and? but unfortunately it was colder than normal. So, we had $7 million benefit from increased volumetric flow, but we had a $7 million offsetting loss from the hedges that we put in place. That was to protect us from volume changing due to weather. On the price side, what happens in a rising price environment is that a greater percentage of the total gas that's being delivered comes out of storage as opposed to just coming from flowing gas. And I'd say that we had a history of two years where we had pretty natural declines from first of month throughout those months. And to some degree we? you factor that in when considering what you should actually hedge in those months and we hedged it to a lesser degree in the first quarter of this year.
John W. Somerhalder II - Chairman, President and Chief Executive Officer
And I would add to that a little bit that one of the difficulties as Drew talked is, you can hedge to some extent but the volumes that actually flow out depend on the weather, which makes it difficult to completely protect yourself. But there are some ways through inventory that you can protect yourself. Most of what you have seen year-over-year was the difference between the benefits we’ve received in past time periods where we actually had a positive benefit by being able to use inventory to make additional. This year was more return to a level where we were protected, but we didn't have that upside. But we do attempt to establish a position that best protects us under these type of circumstances, but still gives us the opportunity in past periods and that's more what the variance is than any other factor.
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