Natural gas prices expected to rise slightly for winter heating season

Heating bills may take a slightly larger bite out of the wallets of homeowners this winter, according to the latest projections on natural gas prices.

Leaders with Black Hills Energy, the city’s largest natural gas company, projected Tuesday that the price of natural gas may rise by as much as 10 percent compared with last year’s prices.

But Black Hills officials said the increase should amount to only a few dollars a month for the average residential user, and that newly discovered reserves of natural gas are helping keep prices at levels much lower than several years ago.

“We don’t see a lot of factors that are going to cause gas prices to really spike,” said Lon Meyer, Black Hills Energy’s interim general manager.

Company officials said at a luncheon for community leaders Tuesday that they are projecting natural gas prices this winter to be as high as $3.82 per MMBtu. One MMBtu is equal to 1 million BTUs (British Thermal Units). That’s up from an average of $3.45 per MMBtu. The average residential home uses about 75 MMBtu per year, Black Hills estimates. Based on those projections, the average home would spend about $27 more in natural gas this coming year than last year.

Actual heating bills, however, likely will be influenced more by whether the winter temperatures are colder or warmer than last season. Black Hills officials on Tuesday didn’t offer any winter weather predictions. Maps from the National Weather Service’s Climate Prediction Center show Kansas is likely to have average winter temperatures in the early part of the winter season, but is more likely to have above-average temperatures for the latter half of the winter season and early spring.

Black Hills officials said that although natural gas is becoming a more common fuel source for electricity generation and for powering vehicles, the company’s economists aren’t seeing a return to the days when natural gas was selling at prices more than four times its current level. In August of 2008, natural gas prices hovered around $13 per MMbtu, but since that time has traded in range of about $2 to $4 per MMbtu as more domestic supplies of natural gas have been discovered.

In addition to the price of gas, customers’ bills also are based on the rates Black Hills charges to transport the gas to customers’ homes. Larissa Long, senior manager of external affairs for Black Hills, said the company does not have any requests for rate increases pending before the Kansas Corporation Commission.