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6.11.03 Higher gas prices hitting home Those high heating costs expected this winter are already showing up in mailboxes around the Midlands. Natural gas customers who are on level payment plans are seeing increases of about 14 percent to 46 percent in their bills. Customers not using level payment plans could be in store for a greater shock when winter heating bills arrive. Already, Aquila Inc. and the Metropolitan Utilities District, the two major providers of natural gas to Nebraska, are paying about 40 percent to 55 percent more for natural gas than they did a year ago. Nationally, high natural gas prices have become the focus of increasing concern. Tuesday, Federal Reserve Chairman Alan Greenspan testified at a congressional hearing that tight supplies will probably keep prices up through the winter. If that's the case, high fuel costs could sting families financially and dampen the still-sputtering economy. Both Jerry Gohr, assistant general manager at M.U.D., and Jan Davis, spokeswoman for Aquila, cautioned against trying to predict how much bills will rise this winter. Natural gas prices vary by day. Last month, for example, M.U.D. was paying about 32 percent more for natural gas than a year ago. This month, it is paying 54 percent more. Aquila is paying 40 percent more. "Gas prices are higher this year than they were at this time last year, and we don't see prices going down," Gohr said. "But pricing can substantially change from now and when winter occurs." The fundamentals of the market, not the availability of gas, are causing prices to spike. The United States has plenty of natural gas available, but gas suppliers don't have enough in storage and don't have enough drilling rigs in the field. Given those factors, prices will probably be above last year. How much higher, though, depends in large part upon the weather. An abnormally hot summer and a cold winter could push natural gas prices to record highs, according to the U.S. Energy Information Administration. A cool summer and a warm winter, on the other hand, could ease price pressures. "What would really help now is if we had a fairly cool summer," Gohr said. That's because electric utilities use natural gas to generate extra electricity to meet summer spikes in demand. That demand by electric utilities drives up natural gas prices just when gas utilities are counting on lower prices to replenish reserves. M.U.D., for example, stockpiles enough gas during the off-season to meet 15 percent of its annual needs. "People don't need to be concerned about the availability of natural gas," Gohr said. "The gas is going to be there when they need it." What is needed, Gohr said, is more stability in the market. Although homeowners can't set national energy policy, there are things they can do to protect themselves against price increases. The "absolute best" things you can do, said Penny Weber, director of information referral services staff at the United Way of the Midlands, is to weatherize your home and sign up for your utility's level payment plan. "We try to talk everyone into the level payment plan," Weber said of the 22,249 people counseled by her agency last year. "It's the only way anybody can budget their money." Customers on level payment plans pay a set amount each month based on the amount of gas they are projected to use and the expected cost of gas. That spreads the cost of winter heat over 12 months. Just a portion of M.U.D. and Aquila's customers, about 33 percent and 24 percent, respectively, are on level payment plans. M.U.D. expects to increase the amount that people pay on the level payment plan by 14.4 percent for residential customers and 15.6 percent for commercial customers. Aquila is boosting the payments by about 46 percent. But there's a way to put some of that money back in your pocket. "Modest insulation and house tightening will result in at least an 18 percent reduction in winter energy costs," said Larry Pearce, assistant director of the Nebraska Energy Office. "Additional weatherization will result in even more savings." This report includes material from the Associated Press |
We have gas in storage to use for the coming winter. |
