Residential heating bills could sting customer wallets more severely over the next three months versus a year ago, according to a survey of western Pennsylvania's natural gas utilities.
Average monthly bills for three of the four companies have climbed from the same time last year -- with increases ranging from 4.5 percent for customers of Columbia Gas of Pennsylvania to a whopping 28 percent for customers of Dominion People's. Customers of T.W. Phillips will see a 1.39 percent increase compared to last year. Equitable Gas Co. is the lone holdout, as its customers will see bills fall slightly from last year.
While natural gas in storage is now expected to reach the critical 3 trillion cubic feet mark by the start of the heating season on Nov. 1, the cost for putting that gas underground over the last half-year is much higher than one year ago. There had been earlier fears of a shortage of gas in storage because of last year's cold winter and high demand.
For example, for all of 2002, the average cost to draw natural gas from the ground averaged $4.14 per thousand cubic feet (mcf), according to the Energy Information Administration branch of the Department of Energy. Through August, the average price was more than $1 higher, at $5.16 per mcf.
"Because the price is a direct pass-through, the simple answer is the gas we were purchasing cost more this year than last year," said Columbia Gas of Pennsylvania spokesman Rob Boulware on Friday.
According to Dominion People's spokesman Elmore Lockley, the current situation reflects the law of supply and demand. "In terms of our own company and nationwide, while there has been more (natural gas) drilling activity, the demand for gas still was there and it was a catch-up situation for drillers," Lockley said.
Average monthly gas bills for Dominion People's customers will increase 28 percent during October, November and December, versus the same three months in 2002. For the average residential customer who uses 10 mcf per month, the total monthly bill will jump to $96.88 from $75.69 last year. Dominion Peoples has about 350,000 customers in Pennsylvania.
For customers of Columbia Gas of Pennsylvania, average monthly bills will increase 4.5 percent during each of the three months compared to the same months last year. Their total monthly bill will rise to $102.31 from $97.89 last year. Columbia Gas has roughly 410,000 customers in the state.
Equitable Gas customers will see their monthly bills nearly match last year's, at $123.68 per month. Equitable has about 260,000 customers.
And the 60,000 customers of T.W. Phillips' Gas and Oil Co. will see a 13.9 percent increase, to $105.03 a month from $92.20 a month last year.
While natural gas prices are up from last year, the bottom line amount customers will pay ultimately depends on the severity of the coming winter.
According to forecasting group Global Weather Services, the period of December through February across the Northeast and central United States will be dominated by below- to near-normal temperatures and near- to above-normal snowfall.
Colder, wetter weather will lead to higher than normal heating demand across the northern half of the U.S. east of the Rocky Mountains, Global Weather Services projects, prompting increased natural gas demand.
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Source: Dominion Peoples Gas Co.
