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Those high heating bills? They're about to get higher
Friday, September 02, 2005

Hurricane Katrina may help to raise your heating bill to new heights this winter.

Even before Katrina struck, the Department of Energy predicted that consumers would be paying $12.97 per thousand cubic feet this winter, an increase of 16.5 percent from last year.

That prediction was based partly on the fact that a large part of the country experienced an unusually hot summer, and Americans used a lot of electricity to keep cool -- electricity that is increasingly generated from natural gas.

When Katrina slammed ashore in New Orleans, immobilizing eight refineries, more than 80 percent of the Gulf of Mexico's 10 billion cubic feet of natural gas production was "shut in," or made unavailable for further processing. As a result, the prices of natural gas futures contracts immediately spiked, with the September contract setting an all-time record of $12.07 per thousand cubic feet.

"This makes a very bad situation even worse," said Sonny Popowsky, the state of Pennsylvania's consumer advocate. "Even before this storm, we were looking at record high prices for natural gas this coming winter."

The situation could have been worse. Because the storm arrived about two-thirds of the way through the gas companies' "storage season," a seven-month period running from mid-April to mid-November, "a lot of the gas for next winter is already stored and priced," said Dominion Peoples spokesman Daniel Donovan.

The law requires that gas companies charge their customers the same price for gas that they themselves pay, and the companies reset their prices every three months to comply.

The next rate change will take effect Oct. 1, and that is when consumers will feel the impact of Katrina -- an impact that could have been more severe if gas companies had not already been storing gas.

Still, consumers should be prepared to pay more.

"We know it's going to go up," said Columbia Gas spokesman Rob Boulware. "We just don't have percentages at this time."

Joe Gregorini, manager of pricing and regulatory affairs at Dominion Peoples, echoed Boulware's remarks. "We don't exactly know what the impact will be" but the company is expecting an increase, he said.

Gregorini pointed out that 40 percent of the company's gas comes from Western Pennsylvania suppliers, and that one-third of that is purchased under fixed-price agreements that are not subject to the fluctuations of the open market.

There are some ways consumers can minimize the impact of record gas prices on their heating costs, including:

Searching for drafts in your home and sealing them.

Installing weather-stripping and caulking around windows and doors to decrease drafts from gaps. If you did this a few years ago, it's likely time to do it again. And use draft-stopping gaskets specially made to fit behind light switch plates and electric sockets.

Checking your gas appliances to make sure they are operating properly.

Change your furnace filter regularly and have your furnace serviced if you can. Keep your water heater set for a comfortable temperature. If your water is so hot that you have to mix it with cold water to use it, you are wasting money heating it to that temperature.

A brochure with other tips for saving energy and dollars are available at the Department of Energy's Web site at www.eere.energy.gov or you can request it from the state's Office of Consumer Advocate by calling 1-800-684-6560.

Another way to minimize the shock of oversized heating bills is to enroll in your gas company's budget plan, which will allow you to pay a similar amount all 12 months of the year. "I would encourage people to do that sooner rather than later," said Popowsky, the state consumer advocate.

First published on September 2, 2005 at 12:00 am
Elwin Green can be reached at egreen@post-gazette.com or 412-263-1969.
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