Natural gas prices send utility bills to new highs

Published 12:00 am Wednesday, September 17, 2003

The warning to energy consumers has a familiar ring: Conserve. Prices of natural gas are

high and probably going higher in the winter of 2003-2004. Wholesale prices now are about $6 per 1,000 cubic feet as compared to $3 at the same time a year ago.

Today, with the weather hot as blue blazes &045; many days with a heat index of 105 degrees so far this summer &045; should the price of natural gas matter that much? Won’t the real strain on the pocketbook come in the winter, when gas heaters kick on to take the chill off the family?

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Well, not exactly. Already, families are reeling from electric bills that reflect the natural gas market. Electric power producers are huge consumers of natural gas. With air conditioning units surging against the hot, humid outdoors, dollars are mounting on the meters.

&uot;Our base rates are where they were in the 1980s,&uot; said Checky Herrington, manager of communications for Entergy Mississippi, the company that supplies many of the state’s communities, including Natchez, with electricity. &uot;The fuel component of the bill &045; well, we would like to say that we can do something about that. We are trying.&uot;

Utilities such as Entergy and Mississippi Valley Gas, the Natchez area’s natural gas supplier, are under regulated ceilings. Utilities do not profit from the higher natural gas prices but do have to pass the prices on the customers. &uot;Natural gas prices are running a lot higher for this time of year,&uot; Herrington said. &uot;Where we can, we’re switching from natural gas to fuel oil, which is a little less expensive.&uot;

A plus for Entergy is its diverse fuel mix, he said. &uot;We have nuclear power there at Grand Gulf near you,&uot; he said, referring to the nuclear station at Port Gibson. &uot;And we have the coal-producing plant in Arkansas.&uot;

Natural gas prices rise as demands outpace production. For the past decade, oil companies have seen profits in natural gas plummet at about the time demands were beginning to grow. Now production has begun to increase but not yet at a rate to meet today’s demands.

Phil Hardwick, spokesman for Mississippi Valley Gas in Jackson, said the federal government has encouraged electricity generating plants to use natural gas, a clean fuel. &uot;The result is that we’re seeing more of a year-around demand,&uot; he said. &uot;And I think the increases in natural gas prices will last for a couple of years until producers can get more gas in the pipelines.&uot;

Natural gas as a commodity is subject to market fluctuations, Hardwick said. &uot;And the fluctuations can be drastic. I wish I could tell you what the prices of gas will be in December. I can tell you we have bought gas this summer for winter use to secure lower prices.&uot;

As in years past when a crisis has occurred in natural gas prices, leaders in the energy sector point to the lack of a national energy policy.

&uot;We aren’t where we want to be,&uot; Hardwick said. &uot;We need a policy that looks long term and is balanced.&uot;

Herrington said Entergy customers are paying about $85 for each 1,000 kilowatt hours today as opposed to $77 a year ago.

Mississippi Valley now is a division of Atmos Energy Corporation, whose president and CEO Bob Best recently released a column warning of high gas prices in the coming winter. Best predicts that even with normal weather, &uot;our customers will be faced with much higher gas bills than last winter.&uot; He said, however, that the company will not be caught off guard and is trying to alert consumers to be prepared.

Entergy is doing the same, Herrington said. &uot;Together, the company and the consumers will get through this together,&uot; Herrington said. &uot;And we’re trying to educate customers as to what they can do.&uot;

At Mississippi Valley Gas, the company urges consumers to learn more about conservation of energy. &uot;Now is the time you can get your house ready for winter,&uot; Hardwick said. &uot;One thing you can do is get a programmable thermostat so you can turn off your heat when you leave home for the day and set it to come on two hours before you return. It really works.&uot;

Jerry Moore, who heads the Natchez office of Mississippi Valley Gas, said customers may call or come by the office at any time during business hours to sign up for the budget billing plan. With that plan, bills are pro-rated through the year so big-ticket months for gas heating such as December, January and February are averaged against the summer months, when consumer use of gas traditionally is lower.

Entergy customers should call 1-800-ENTERGY and ask to be signed up for the budget billing, Herrington said.

&uot;You must have been a customer for 12 months,&uot; he said.