Natural gas prices expected to nip customers this winter

Published 12:00 am Monday, October 16, 2000

FERRIDAY, La. – Natural gas prices have spiked in the past year, forcing customers’ rates up as well — and gas company officials say customers can expect that to translate to higher bills this winter.

&uot;Our cost for gas has gone up to unprecedented highs,&uot; said Ricky Burke, vice president and general manager of Louisiana Gas Service Co., which serves the Ferriday area.

&uot;Customers haven’t seen that yet because they don’t use much gas in the summer months but they’ll probably see it this winter,&uot;&160;Burke added. He said the company sent notices in customers’ bills last month notifying them to expect rate increases.

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Vidalia announced Wednesday that its utility rates would rise next month due to a rise in energy production costs. That includes a rise of at least $4 a month for gas customers, but natural gas prices will be reviewed every three months to see if rates can be adjusted. In the past year, the price of natural gas has risen from $2.982 to $5.377 per BTU.

&uot;It’s estimated that customers’ bills could be 40 percent higher this winter than last winter … due to the higher price of natural gas,&uot; said Jerry Moore, district manager for Mississippi Valley Gas.

Like Louisiana Gas, Mississippi Valley Gas is state-regulated and, as such, has to pass its increased cost for natural gas straight to customers, Moore said.

Increases in petroleum prices have also affected the price of butane and propane, which are used heavily in the Miss-Lou’s more rural areas, although not all of that cost has to be passed on to customers.

&uot;My cost has increased 40 to 50 percent in the last year, while consumers’ costs have risen 10 to 15 percent,&uot; said Ira Cleveland, manager of Natchez Butane, which serves central and south Mississippi.

&uot;As a result we’re making less on (butane) now. But there’s no way we could pass all of that on to the customer.&uot;

At Herrin Gas, costs are up 32 percent and selling prices are up 22 percent from this time last year. That is due to increases in the cost of both natural gas and crude oil, since propane is a by-product of both types of wells, said Chief Executive Officer Ed Herrin.

&uot;But we have high hopes that the market is close to peaking and that, if we have a normal or mild winter, the customers’ (rates) could stay about the same as they are now,&uot;&160;said Herrin, whose company serves the south half of Mississippi as well as south central Louisiana.