Natural Gas Bills Likely To Climb This Winter Source: THE HARTFORD COURANT Publication date: 2000-09-01

Connecticut's natural gas customers should not worry about running out of fuel this winter, but they should expect to pay more for it. Gas utility bills are expected to be 10 to 20 percent higher than last year, utility executives said Thursday. The heads of Connecticut's three gas utility companies assured state regulators they would have enough gas in storage and under contract to meet the demands of their firm-price customers -- primarily residential and small commercial customers.

But with wholesale gas prices running 65 percent higher than last year, customers may end up paying between $100 and $200 more for gas this heating season, compared with last year.

"Conservation will help all of us. This may be the time we want to embrace the sweater rather than the thermostat," said Michael G. Morris, chairman, president and chief executive officer of Northeast Utilities, parent company of Yankee Gas Services Co.

Natural gas competes with oil and closely tracks the price of crude. With oil holding at more than $30 a barrel, natural gas prices are hovering at near record highs. As a result, the gas utilities are paying more for their fuel, and so, in turn, will their customers this winter.

But the wholesale increase won't necessarily be what retail customers pay. Retail gas rates are regulated, and include not only the price of gas, but also the costs of transportation, delivery, billing and other services.

If gas costs exceed the amounts included in base rates, the difference is passed through to customers as a purchased gas adjustment charge on their monthly bills. That charge is adjusted each month.

Depending on the utility, the cost of gas represents between 23 and 32 percent of a customer's bill. Attorney General Richard Blumenthal said he was skeptical of that breakdown. "We will be very closely scrutinizing these numbers and theories," he said.

Blumenthal said his office would also "take action where appropriate" to protect consumers from price increases or supply interruptions.

Yankee Gas Services Co., for example, said the average heating customer paid $943 for gas service last year, with the highest bills occurring during the coldest winter months of December, January and February.

Based on current wholesale prices, Yankee estimates that the same customer can expect to pay between 15 and 18 percent, or $142 to $170 more this year.

Yankee is Connecticut's biggest gas utility, with 185,000 customers.

With lower gas costs than Yankee, Connecticut Natural Gas Corp. said it expects the impact on its average customer to be less. The average CNG heating customer who paid $730 last year is expected to pay 14 percent, or $100 more this year, the company said.

Hartford-based CNG has 144,000 customers.

Sal A. Ardigliano, president and chief operating officer of Southern Connecticut Gas Co., a subsidiary of New York's Energy East Corp., said Southern's customers are looking at increases of between 10 and 20 percent.

The state Department of Public Utility Control called in Yankee, CNG and Southern for an update on the winter supply situation, and to discuss ways to reduce the impact on customers.

Although no decisions were made Thursday, one suggestion was to freeze the purchased gas adjustment charge through the winter and pass through the higher costs to customers during the summer months, when bills are lower.

The utility executives also urged regulators not to cap prices because it would send the wrong signal to competitive markets, and could help to keep prices artificially high.

The state consumer counsel is also wary of using the monthly gas adjustment to buffer customers from price increases.

"If we stretch out the costs, customers would lose an important price signal that could encourage them to take action" and reduce their energy use, Koss said.

Meanwhile, regulators Glenn Arthur and Linda Kelly Arnold urged the companies to step up efforts to keep their customers informed about supply and price changes, and to pay particular attention to elderly and low-income customers.

Courant Staff Writer Christopher Keating contributed to this story.

http://cnniw.yellowbrix.com/pages/cnniw/Story.nsp?story_id=13377203&ID=cnniw&scategory=Utilities%3AGas

-- Martin Thompson (mthom1927@aol.com), September 01, 2000

Answers

Didn't want to keep those New England folks feeling left out.

-- Martin Thompson (mthom1927@aol.com), September 01, 2000.

I like this Utopian faith the politicians and bureaucrats have. If they have a contract for natural gas, automatic coverage and delivery.

Boy, are a lot of these people going to be surprised.

-- Wellesley (wellesley@freeport.com), September 01, 2000.