July 17, 2008

Natural Gas Price Hike in Oregon May Help Contractors

By Libby Tucker

Natural gas prices are expected to skyrocket next year, with utility bills increasing as much as 40 percent for residential customers, Oregon's three natural gas utilities told the Public Utility Commission this week.

That's bad news for customers already squeezed by rising fuel prices and a weakening economy. But it could be a boon for energy efficiency contractors offering options for homeowners and businesses to cut energy use and lower their utility bills.

On Tuesday, Northwest Natural Gas, Avista Corp. and Cascade Natural Gas Corp. presented a series of doom-and-gloom forecasts for increasing energy demand, higher natural gas prices and limited supplies, and new carbon regulations to combat climate change over the next year.

The changing market conditions will drive rates up next year with Northwest Natural predicting a 35- to 40-percent increase, Avista showing a 10- to 15-percent rise, and Cascade Natural a 15- to 20- percent increase.

"Customers are going to see in their mailbox soon what they see at the gas pump," said Lee Beyer, chairman of the Public Utility Commission.

Only the Energy Trust of Oregon presented the PUC with an opportunity for energy savings through conservation and efficiency. The nonprofit organization, funded by a public purpose charge on ratepayers' energy bills, announced a new public campaign to encourage efficiency upgrades that they say can save residents and businesses 15 to 30 percent on their energy bills.

The Energy Trust will work with utilities to promote a variety of energy-saving methods, including water heaters without tanks, home weatherization, duct sealing and high-efficiency furnaces. And it will refer consumers to its trade allies, a list of preapproved contractors, to perform the work.

"For the first time we've had much more interest and demand for services in the summer, (which is unusual because) people don't think about heating costs when it's 95 degrees outside," said Margie Harris, executive director of the Energy Trust. "They are now. And I suspect they will after they hear about the pending rate increases announced today."

After hearing the utility's presentations, consumer groups advocated for increased emphasis on energy efficiency and renewable energy and more funding for low-income assistance programs to help the state's poorest residents pay their utility bills.

The "unprecedented" increase in utility rates could mean hundreds of dollars a month in additional costs to a household, said Jason Eisdorfer, energy program director of the Citizens' Utility Board. That means in the short term, low-income households will be hit the hardest by the rate shock, he said. In the long term, encouraging energy efficiency and renewable energy should be the region's priority.

"It indicates a paradigm shift where energy efficiency isn't an afterthought," Eisdorfer said. "It's now the first thought in energy."

Industrial customers also called for greater investment in the region's natural gas infrastructure. Natural gas pipelines are already operating at capacity, according to the Northwest Gas Association. They predict increasing natural gas production in the Rocky Mountain region, but the supply to the Northwest is limited by current pipeline capacity.

"It's a difficult market and the answers aren't just in efficiency and renewables, but additional supplies and infrastructure for this region," said Paula Pyron, executive director of the Northwest Industrial Gas Users, a trade association for large energy users. "It's a very weak economy and it's troubling. This region needs to maintain its competitiveness on the energy side."

Originally published by Libby Tucker.

(c) 2008 Daily Journal of Commerce (Portland, OR). Provided by ProQuest Information and Learning. All rights Reserved.