Published Sunday, December 31, 2000, in the Akron Beacon Journal.

Gas bills take heat Record rates may climb higher BY FRANK WITSIL Beacon Journal business writer

Record-high natural gas prices and freezing temperatures are doubling, even tripling, monthly heating bills.

But what's worse, hundreds of thousands of customers may end up with huge bills to pay in the summer.

Dominion East Ohio, the main natural gas supplier for this area, acknowledged this week that the company probably underestimated natural gas bills for about one-third of its 1.2 million customers who are on budget payment plans.

That means those customers will likely end up owing the gas company when the billing cycle ends mid-year.

``They're going to get whacked,'' said Ohio Consumers' Counsel Robert Tongren. The underestimated billings are such a concern that the Public Utilities Commission of Ohio is getting involved.

The commission recently told gas company executives that it would be open to suggestions that would ease the financial burden on customers, said Doug Maag, deputy director of the commission's utilities department.

Adding to those worries is the expectation that some natural gas rates will go up again in February.

Columbia Gas of Ohio told the commission on Friday that it planned to raise rates by 17 percent, or $1.27 per thousand cubic feet. Dominion East Ohio plans to announce what it will do with rates on Tuesday or Wednesday, a company spokesman said.

Government and private assistance programs are bracing for requests to help.

Bills have gone up, even though it may not be reflected in the amount printed on the remittance stub.

About 385,000 of Dominion East Ohio's natural gas customers are on the payment plan, the company said. The plan helps customers budget their monthly expenses by projecting the annual bill and dividing it into equal monthly payments based on the previous year's usage and gas prices.

Generally, the payment plan works.

Customers build up credit in the summer when they do not use much gas, and use it up in the winter, when bills are high. By the end of the annual cycle, which ends in June or July, no balance should be due.

But natural gas bills are so high this month that they are wiping out the credits that many budget payment customers have built up.

Charging double Dominion East Ohio is charging nearly double what it did last December for natural gas. The rates are regulated by the public utilities commission. The temperature also is about 22 degrees colder this month than it was the same month a year ago, the gas company said.

To avoid getting a big bill in the summer, customers should pay more than the budgeted monthly amount due on the bill. Exactly how much more customers should pay is nearly impossible to determine, consumer groups said.

Dominion East Ohio declined to estimate how much more bills would be this year.

``These are unusual circumstances,'' Dominion East Ohio spokesman Neil Durbin said.

The company plans to review its payment plan estimates in February or March and adjust them to account for the colder weather and higher gas prices, he added. Customers still have the option, however, of just paying the budgeted amount and making up the difference with one payment in the summer.

Loraine Dennison, a private school dance teacher, said her family is paying about $75 each month for natural gas to heat her Akron home. The averaged bills have always helped her budget her expenses since she does not get paid when she is not working in the summer.

But this year, she fears opting for the budget plan might have been a mistake.

``I have a feeling its going to come back and bite me in the butt,'' she said.

Natural gas prices have quadrupled in the past year.

Last week, natural gas prices reached a record price of $9.95 per million British thermal units of the New York Mercantile Exchange. It was the highest price for a most-active contract since natural gas futures began trading on the exchange a decade ago.

The high price of natural gas also is driving up the price of propane, a derivative of natural gas processing and crude oil refining. Propane, which is stored in tanks, is used to heat homes usually in more rural areas where gas pipes don't run.

Propane prices are not regulated and vary widely.

The energy department said it does not expect natural gas supplies to run out.

``It's a classic situation of increased demand and diminished supply drives up price,'' said Joe Mosbrook, a spokesman for FirstEnergy Corp.

FirstEnergy began supplying natural gas this year for customers who signed up, offering natural gas at a lower rate than Dominion East Ohio, which still delivers the gas to Akron-area customers and bills them.

Because of the lower rate, FirstEnergy customers will not be affected by the price hike, but probably will have higher heating bills than last year because they are using more gas.

Governor's warning Last month, Gov. Bob Taft sent a message with bills that warned customers that natural gas prices were rising. He also offered tips to lower heating costs by insulating homes and lowering thermostats. Demand for natural gas increased this year, in part, because of new gas-fired electric generators and new home construction that uses natural gas, according to the U.S. Energy Department. Cold weather also boosted demand as people try to keep warm.

Gas companies are drilling to find new supplies, but typically it takes months for supply to catch up.

In the meantime, customers say they don't know how they are going to pay their bills.

Curtis Paul, a 79-year-old widow who lives in a three-bedroom house in Akron, has her thermostat set at 72 degrees. At night, she sleeps under an electric blanket and during the day she wears extra warm clothes.

Her gas bill is $332.81 -- more than one-third of her monthly Social Security check.

``It shouldn't be that much,'' the Dominion East Ohio customer said.

This month's bill is the highest it has ever been, she said.

She is not on the budget payment plan.

Veronica Brown Sims, the director of outreach and community development for Akron Summit Community Action Inc., said that her office has taken several calls about the rising heat bills. The nonprofit organization provides emergency heating assistance.

Many residents have complained to her that their heating bills are three times what they were last year.

The number of applications to the Ohio Department of Development, which administers the Low Income Home Energy Assistance Program, are up about 5 to 10 percent from last year.

That number could grow if freezing temperatures persist, community services chief Vicky Mroczek said.

Frank Witsil can be reached at 330-996-3748 or fwitsil@thebeaconjournal.com

http://search.excite.com/relocate/sr=news|ss=natural+gas;http://www.ohio.com:80/bj/news/docs/009616.htm

-- Martin Thompson (mthom1927@aol.com), January 01, 2001

Answers

Gas customers likely to blow a gasket

Monday, January 01, 2001

ASSOCIATED PRESS

COLUMBUS - Colder weather and high natural gas prices probably will mean a rate increase for Columbia Gas of Ohio customers.

The company on Friday filed a request with the Public Utilities Commission of Ohio for a 16 percent increase. The increase would be in effect Feb. 1 to April 30.

The company predicted that the new rate, combined with higher gas consumption because of the weather, will drive the average gas bill up by 59 percent compared with last year.

Columbia serves 1.3 million customers in 64 counties, including about 250,000 in Northeast Ohio.

PUCO spokeswoman Beth Trombold said approval of such adjustments usually was automatic once they are reviewed for accuracy. Under Ohio law, gas companies are permitted to pass the cost of gas onto customers.

The new rate would be 86 cents per hundred cubic feet of gas for February through April, compared with 74 cents the previous three months.

"We have significantly colder than normal weather combined with somewhat unprecedented price increases, so it truly is a double whammy," said John Partridge, a senior vice president at Columbia Gas. "It is understandable why some customers are confused and in some cases angered by higher bills."

The company also announced that it had removed Summit Natural Gas of Twinsburg from its choice program. Jablonski said Summit failed to supply gas for some of its 3,850 customers.

The choice program lets customers shop for cheaper gas from other suppliers; Columbia then delivers it through its pipelines.

The affected customers will revert to Columbia and must pay its prices unless they pick another supplier.

Customers signed on with other suppliers in the choice program won’t be affected by the price increase unless their contracts peg gas costs to Columbia rates.

Summit’s departure is the third time in four months that a gas marketer has left the program.

Energy Max of Youngstown was kicked out in September, and D&L Marketing of Youngstown withdrew voluntarily. The Ohio Office of Consumers’ Counsel later sued both to recoup customer losses.

Robert Tongren, the consumers’ counsel, said he was evaluating whether to sue Summit.

©2001 THE PLAIN DEALER. Used with permission.

http://www.cleveland.com/news/index.ssf?/news/pd/cc01gas.html

-- Martin Thompson (mthom1927@aol.com), January 01, 2001.