Archive for Thursday, December 15, 2005

Natural gas prices aren’t slowing holiday shoppers

December 15, 2005


Lorna Browning is resigned to the fact that high natural gas prices may leave her looking, at times, like a hypothermic track star.

"This is the first year that I've turned the thermostat down so low that I have to wear sweats and a sweatshirt around the house," Browning said.

But the Lawrence resident won't let the high heating costs have her come off looking like something else: a Grinch. Browning, like several other downtown shoppers Wednesday, said she wasn't allowing natural gas bills - that in some cases have doubled or tripled in the past month - to put a damper on her holiday spending plans.

That doesn't mean, though, that gas prices aren't invading her holiday thoughts.

"You bet I'm worried about it," Browning said.

Leaders with Aquila, Lawrence's natural gas provider, said Wednesday that consumers had good reason to keep natural gas prices at the top of their minds.

"It appears that bills are going to remain higher than they were a year ago throughout the winter," Larissa Long, a spokeswoman with Aquila, said at a luncheon that the company hosted Wednesday for city commissioners.

Price comparison

Here's a look at what customers with three natural gas companies may be paying in December, according to data from the Kansas Corporation Commission. The data assumes each customer uses 100 ccf of gas during the month. ¢ Kansas Gas Service: $122.20 ¢ Aquila: $118.10 ¢ Atmos Energy: $107.51

Long said natural gas prices currently were about 15 percent higher than they were a year ago. The good news, Long said, is that's not as large of an increase as the company once feared. In October, gas prices were about 70 percent higher than a year ago.

Consumers likely didn't see a 70 percent increase in their bills, though, because the weather was mild and they were able to use less gas than normal. The weather might not cooperate so nicely in December. If the weather is colder than normal, gas bills likely will increase much more than 15 percent from a year ago.

The prospects of higher bills didn't come as a surprise to downtown shoppers Wednesday. Several said it had become an annual event for gas companies to announce prices at or near record highs.

"It just seems to be a part of life anymore," Stephanie Dahlquist said. "Fuel of some sort is causing a problem all the time now."

Rosemary Foreman, spokeswoman with the Kansas Corporation Commission - which regulates the price that companies can charge to deliver gas but has no ability to regulate the actual price of the commodity - said a change in how electricity was generated had put natural gas prices on a long-term upward trend.

Foreman said natural gas-fired electric plants had became more common as environmental concerns over coal-fired power plants increased. The switch created more demand for natural gas and made it more difficult for companies like Aquila to purchase inexpensive gas during the summer and store it for winter usage.

Whether prices stay high for years to come largely will depend on whether consumers adjust their energy consumption, Foreman said.

"Absent a crystal ball, it seems like gas prices are going to stay high," Foreman said. "But I think we are beginning to realize that our behaviors are going to have to change some, too. When (vehicle fuel) gas prices got up to around $3 a gallon, we finally awakened a little bit."

More alternative energy sources, such as wind power and increased conservation efforts, may be the best bet to slow future price increases, Foreman said.

"A little bit here and little bit there can add up to some savings," Foreman said.

A little bit here and there also is a good philosophy for people looking to save on heating bills this winter, Long said. She said people should look for simple steps to reduce their bills, such as adding weather-stripping, fixing leaky faucets that keep hot water heaters running and turning down thermostats to below-average levels.

Cold weather rule prevents gas shutoffs

People who are having trouble paying their natural gas bills can sign up for a special payment program under the state's Cold Weather Rule that will allow them to keep their gas service on. Through April 1, people can stop their gas company from disconnecting them by agreeing to pay at least 1/12th of their past due balance per month. But on April 1, gas companies can require people to pay bills in full to maintain service. The Cold Weather Rule also prohibits gas companies from disconnecting anyone - even if they haven't agreed to a payment plan - whenever the National Weather Service forecasts temperatures to drop below 35 degrees in the next 48 hours. People who have been disconnected can force gas companies - between Nov. 1 and March 31 - to reconnect them if they agree to the payment plan.


Richard Heckler 12 years, 4 months ago

They always say we are running in short supply because of poor planning. Why then are prices increased? Supply manipulation perhaps?

Jamesaust 12 years, 4 months ago

Ah, the price rationing system at work. Prediction: no one will run out of natural gas.

Why higher prices? Primarily a demand factor (with inherent supply inefficiencies). Demand for natural gas is up, a lot. Alternatives such as oil are expensive too. Its cleaner than coal so utilities limiting emissions prefer it. The economy is growing well so more production requires more energy consumption.

There are some supply constraints. Biggest of all - unlike oil or coal, natural gas is .... a gas, and so must be contained at all times, usually pipeline. Pipelines go only from A to B and a supply infrastructure has to be constructed going out to each individual user. Many of the best gas producing fields in the U.S. are running out and years of limitations on drilling by the government are coming home to roost. Most Canadian production is already spoken for. The only remaining source is overseas, but again, the nature of gas limits opportunity - to be transported, the gas must be turned into a liquid and special port facilities have to be constructed. Needless to say, people in Malibu, California, or Bar Harbor, Maine, don't like a big smelly, dangerous, and unsightly facility spoiling their seaside views.

hottruckinmama 12 years, 4 months ago

of course it shouldn't slow folks down. if you allow it to slow you down or complain then you will be considered un-american. we are supposed to pay those high gas bills and make those gas company folks richer and just keep smiling. then when you run out of cash money for christmas well then just whip out that 'ol credit card and make those credit card folks and retailers richer. and then next month the credit card folks will thank you by doubling your monthly payemnt and the retailers will thank you by refusing to exchange or return most of the things that don't work or don't fit. welcome to the country under bush and co.

neopolss 12 years, 4 months ago

Most won't see the largest bills until January. It wasn't all that cold for the month of November, so December bills should be tame. Don't be surprised if the gas company delays sending a few of those bills.

PS - don't forget that the biggest surprise comes after Christmas. Once those credit cards are nice and charged up, the percentage rate increase goes into effect. Couple that with the new bankruptcy law, and its win/win for the credit companies.

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