Home gas bills leap 54%: Year-over-year change reflects tight supplies

The Cincinnati Enquirer ^ | 29 Aug 03 | Mike Boyer

[xzins]

Residential gas bills will rise about 54 percent from a year ago starting Monday for Cincinnati Gas & Electric Co. customers.

The unit of Cinergy Corp. said the typical residential customer will pay $115.50 a month, up from $75.04 last September for a residential customer using the average 10,800 cubic feet of gas.

In Northern Kentucky, the same customer will pay $106.91 a month, up 45 percent from the $73.60 last September.

The culprit? Higher natural gas costs, which typically represent about 70 percent of the monthly bill.

Consumers such as Mike Rieck, a retiree who lives in North Avondale, find the increase tough to swallow.

"I think it's a hardship," he said. "I don't want to give them that money."

Rieck said he thinks that there's plenty of natural gas, but problems in the delivery system are driving up the cost. "I don't think deregulation has worked," he said.

Dayton-based Vectren Corp. said this week that its gas costs will rise 39 percent from a year ago starting Sept. 1.

By law, CG&E and other utilities pass through the cost of the gas they buy on a dollar-for-dollar basis through what's known as the gas cost recovery rate.

Starting Monday, the gas cost recovery rate will be $7.47 a thousand cubic feet in Ohio, compared with $4.19 a year ago. In Northern Kentucky the rate rises to $6.63 a thousand cubic feet from $3.93 a year ago.

The new gas cost recovery rate taking effect Monday is actually down about 7 percent from the rate in effect through the summer.

In the face of tighter supplies and higher demand, gas prices haven't declined this summer as much as in previous years.

In years past, CG&E made adjustments in its gas cost recovery rate quarterly. But last week, the Public Utilities Commission of Ohio approved a change allowing CG&E to adjust its gas costs monthly starting in September.

Kentucky adjustments are still made quarterly, but CG&E said it plans to seek a similar change soon from the Kentucky Public Service Commission.

The company said the monthly changes more accurately reflect gas costs in customer bills. The quarterly changes included adjustments for under- or over-collections from prior periods, and that distorted monthly charges, the utility said.

The utility said the monthly changes should reduce the size of the price adjustments.

Ohio Consumers' Counsel Rob Tongren unsuccessfully tried to challenge the switch.

He argued that consumers wouldn't be able find alternative suppliers or cut consumption quickly enough when faced with monthly changes.

"Residential consumers are being denied essential pricing information," he said.

But Dublin, Ohio-based Interstate Gas Supply Inc., which is the only alternative supplier in CG&E's service area, says it has no problem with monthly changes.

"It more accurately reflects prices to consumers," spokesman Dave Burig said. Interstate has about 30,000 residential customers in CG&E's service area.

Steve Brash, CG&E spokesman, said the current rates were set four months ago, and natural gas consumption this summer was somewhat lower than expected.

He said it's difficult to predict what gas prices will be this winter, typically when consumption soars.

"A lot depends on the weather," he said.

Email mboyer@enquirer.com

[xzins]

These kinds of increases hurt economic recovery in my opinion in that they take money out of the hands of consumers.

[RightWhale]

In the face of tighter supplies and higher demand

Hocus pocus.

[xzins]

It does make you wonder what led to tighter supplies AND if the demand would be higher if it weren't for the "tighter supplies."

Who's using natural gas right now, anyway, except to cook? How do they know what kind of winter it will be since weather forecasting is good for only about a week.

[OldFriend]

About the time energy prices began spiking is exactly the time ole Greenspan began raising interest rates.......we know how that worked out.

Let's hope the senile old fool learned his lesson.

[cksharks]

Very simple. The enviro wack jobs and stupid idiot people in general will not let the power companies build anything but NATURAAL GAS power plants. Up until a few years ago there were very few NATURAL GAS power plants. They stopped all drilling off Florida ( which is stupid because there are billions of cubic ft of gas off the coast.) They stopped all drilling off the coast of kalifornia and then made them use (you guessed it )natural gas for all new power plants.Guess what happened to the supply factor.

[xzins]

P3 = P_ss Poor Planning

Thanks for the insight.

Time to break out the woodstove.

[AdamSelene235]

Who's using natural gas right now, anyway, except to cook?

Every friggin power plant built in the last 20 years.

[Damocles]

I have the unfortunate pleasure of owning a home built by the local president of the gas company. I have gas range, oven, dryer, heater and AIR CONDITIONER.

Yeah, that's right a gas fired chiller air conditioner.

My gas bills are up 60% from last year and it hurts.

[aardvark1]

See the following posting for the reason why:

http://www.freerepublic.com/focus/f-news/961892/posts

"The Natural Gas Crisis"

[xzins]

And Walter Cronkite won't let them build a wind farm in his neighborhood -- lol -- the elitests only mean for YOU to live differently.

[xzins]

If it runs on natural gas, it'll run on propane. Do you live in an area where you can set up a propane pig?

I'm definitely going woodstove since I live out in the woods and have more trees than I know what to do with. I see a lot of pressure on propane prices as natural gas folks switch over.

Natural Gas air conditioner?????!!

Heck, why not a steam engine?

[SierraWasp]

PONG!!!

[BOBTHENAILER]

Don't say I haven't been preaching this to the choir.

[SierraWasp]

Choir practice is "a good thing," as Martha S. would say!!!

[MonroeDNA]

You nailed it.

[Ben Hecks]

Your #5 nails it! Our natural gas costs have increased 300 percent in the past two years. Since the gas-powered power plants use gas the year round, there is no off-season to allow for any reserves to be accumulated. This winter, we plan to use oil-filled electric heaters to reduce our gas usage.

[cksharks]

Exxon is trying to bring in a LNG plant to Mobile Al to supply MORE natural gas to FL. They just built a new pipeline from Bayou La Batre Al to Miami. The compressors are sitting where I killed my first deer. It just hacks me off to no end for the idiots in Fl to say no drilling but send us your gas and mess up your state and it sucks.I hope the pipeline breaks and South Fl gets shit for gas.

[I got the rope]

Prices at the Wellhead are stable and have been for years. Wells in West Texas are choked back because they aren't making any money. Florida Gas Transmission (FGT) is complaining that they don't have enough gas to run some compressor stations and the energy traders are making a killing. This gas shortage is a man-made one not by the market, but by a bunch of Ivy-league punks who are cornering the market in trading. The government needs to step in an free-up the market the Enron's and the mini enrons are killing us.
Oh yeah, the EPA is also requiring that Natural Gas Plants have a 2 grain/ 100 cubic ft sulfur limit which also adds to the cost of natural gas after it gets to the plant.
Thank the EPA.

[therut]

Well I grew up on gas but hey a gas company came to my Dads land and drilled a well and decided there was not enough gas to be profitable? This was in the 1971. So for the damage done to the farm (insted of money) the gas well was left running for my families use (we had to keep it up). My whole family had free gas for about 25 years. He ran his chicken houses off of it. My Dad was a smart man. He ran the gas line about 2 miles to the main house. The well finally died out but I remember seeing the gas bubble above the ground(kinda like Jed and that Texas Gold). The funny story is the guy who married my sister was out shooting with some of his friends on the property and they decided to shoot down a sapling. They all heard a Hisssss sound and they had shot a hole in the gas line. Chuck went and told my Dad what he had done. My Dad said one word "huh" they went together and fixed the leak. My brother in-law still has the piece of pipe with the hole in it as a souvinour!!!LOL!! Since all of Chuck's friends ran off and left him to confront my Dad I think that was the day my Dad decided he was O:K to marry my sister.