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Archive for Wednesday, August 30, 2000

Natural gas prices could rise 50 percent this winter, officials say

August 30, 2000

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— The temperature outside climbed into the high 90s, but a group of legislators spent Tuesday discussing a cold-weather problem.

What members of the Special Committee on Utilities heard was enough to send a chill through anyone, even on a sweltering August day: Consumers are likely to be socked hard by high natural gas prices this winter.

Walker Hendrix, consumer counsel for the Citizens' Utility Ratepayers Board, the state's consumer advocacy agency, said some predictions are that consumers' gas bills will be 50 percent higher this winter than last winter.

"One of the things that make constituents angry are dramatic increases in their gas bills," Hendrix told the committee.

Steve Johnson, a spokesman for Kansas Gas Service, attributed high gas prices and the expectation for continued high prices to market forces. The company began sending out notices to its 625,000 customers this month.

The company also is offering consumers a brochure with tips for conserving energy during the winter. Encouraging conservation may be the only thing anyone can do.

"Right now, I don't see a whole lot we can do," said Rep. Dennis McKinney, D-Greensburg. "I would like to pursue policies that keep Kansas gas in Kansas."

Johnson noted that the wholesale cost of gas for his company had increased more than 25 percent from January to July.

Johnson blamed the increases on a number of factors, including an increased use of natural gas to power electric generators for air conditioning and lack of exploration for gas when prices fell. Storage of natural gas is down 19 percent from this time last year, he said.

Hendrix blamed nervous traders in natural gas futures. He said they were speculating on the ability of utilities to meet consumers' winter needs and keeping the price up.

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