Natural Gas Cost to Rise About 10%: PSC Calls Increase Lower Than Some in Past Years

By Karla Ward, The Lexington Herald-Leader, Ky.

Oct. 31–Kentuckians who heat with natural gas can expect to pay about 10 percent more this winter than they did last year.

The Kentucky Public Service Commission said yesterday the average cost of gas among Kentucky’s five largest natural gas distribution companies is expected to be $9.46 per 1,000 cubic feet, or mcf, this winter — up 81 cents from last year.

While no increase is a good one, PSC Chairman Mark David Goss said this rate increase is lower than some in past years.

“This one is relatively modest,” he said in a press release.

The wholesale cost of natural gas has nearly doubled since 2002, and it is not expected to decline anytime soon.

Columbia Gas customers are paying $10.19 per mcf, said Lisa Smith, communications manager for Columbia Gas of Kentucky.

That compares to $8.37 per mcf at this time last year.

But Smith said the rate being charged last year was artificially low because customers were receiving a credit for bills that were too high in 2005.

In Kentucky, gas companies are not permitted to mark up the cost of gas. They must pass the wholesale cost along to consumers, but they must estimate that cost in advance, Smith explained.

In 2005, after Hurricane Katrina, Columbia overestimated what it would be paying for gas. That meant customers got a break in 2006.

Smith said Columbia’s rates will be adjusted again in December.

While about three-quarters of a customer’s bill comes from the actual cost of the gas, consumers will also see an increase on their bills for delivery.

The PSC approved a settlement with Columbia Gas in August that will result in an increase of $4.22 per month for the average residential consumer. Delivery rates are now $9.30 a month.

The PSC says 44 percent of Kentucky’s population heats with natural gas; an additional 10 percent heat with propane, and 3 percent heat with fuel oil. Those customers should also expect increases.

“Consumers should begin each heating season with a plan for paying their energy bills and a strategy for reducing those bills through energy conservation,” Goss said. “Reducing consumption is the best defense against high energy bills.”

Customers having trouble paying their gas bills should contact the company as soon as they realize there’s a problem, Smith said, since help is available.

“If they need it, they should ask for it,” she said.

——

Natural gas usage tips

Sign up for budget billing. This allows customers to pay the same amount each month, based on their average monthly usage during the year.

Turn down thermostats. Most people are comfortable at 68 degrees. And water heated to 120 degrees is hot enough for nearly all uses.

Get an energy audit. Many local utilities offer home energy audits at little or no cost. Audits can identify energy-wasting trouble spots and provide information on how to correct the problems.

Weatherize to reduce inflows of cold air and outflows of warm air. Caulk or weatherstrip cracks around windows, doors and pipes. Add insulation in attics, crawl spaces and walls. Cover windows, especially those with single panes, with storm windows or plastic sheeting. Clean or replace furnace filters each month.

——

For help

— Weatherization assistance for low-income families is available through the Kentucky Cabinet for Health and Family Services. For information, visit http://chfs.ky.gov/dcbs/dfs/Weatherization.htm [http://chfs.ky.gov/dcbs/dfs/Weatherization.htm].

— Low-income consumers might qualify for help paying their heating bills through the Low-Income Home Energy Assistance Program. For information, visit http://chfs.ky.gov/dcbs/dfs/LIHEAP.htm [http://chfs.ky.gov/dcbs/dfs/LIHEAP.htm].

— For advice on conserving energy, see www.energy.ky.gov/dre3/ [http://www.energy.ky.gov/dre3/].

——

Help yourself: Ways to decrease your natural gas bill. A11

Reach Karla Ward at (859) 231-3314 or 1-800-950-6397, Ext. 3314.

—–

To see more of the Lexington Herald-Leader, or to subscribe to the newspaper, go to http://www.kentucky.com.

Copyright (c) 2007, The Lexington Herald-Leader, Ky.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

NYSE:NI,