Charlotte, N.C.-Based Natural-Gas Utility Warns Customers of Higher Billsgreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
Charlotte, N.C.-Based Natural-Gas Utility Warns Customers of Higher Bills Source: Knight Ridder/Tribune Business News Publication date: 2000-10-05
Oct. 5--Piedmont Natural Gas Co. warned customers yesterday to expect to pay an average 30-50 percent more a month for heating this winter because of sharply higher prices on the wholesale market. Piedmont Natural Gas, the second-biggest natural-gas utility in the Southeast, has been warning its 660,000 residential and commercial natural-gas customers in bill inserts since June to prepare for increased costs. In early September, it said that natural-gas bills could rise 20-22 percent.
Revising its estimates yesterday, the company said that although the higher spot-market prices have encouraged increased drilling by producers, it does not expect sufficient new gas supplies to come onto the market "in time to decrease prices to any extent this winter."
"The average residential customer can expect to pay 30-50 percent more per month during the winter months of November through March, compared with last year," said the company, which is based in Charlotte. "Actual bills will vary, depending on weather, home energy-efficiency and household energy-usage patterns."
Piedmont Natural Gas, however, assured customers that it will have enough neatural-gas supplies for the season.
"It's a tight market but there's not a shortage," said Stephen Conner, a spokesman for Piedmont Natural Gas.
Even if this winter is milder than expected, prices are unlikely to drop by much because of strong overall demand, Conner added.
The expected rise in heating costs will make life "desperate" for low-income earners and the non-profit organizations that help them make ends meet, said Roma Combs, the director of the Sunnyside Ministry of the Moravian Church.
"This winter will create the most severe crisis this community has faced in years in keeping folks warm," Combs said. His agency helps needy disabled and elderly people with household expenses, including heating bills.
Natural-gas prices have risen steadily this year.
Warmer-than-normal weather during the past two winters depressed market prices, prompting many producers to drill fewer wells. Less exploration and drilling in turn reduced the supply of natural gas on the market.
Increased demand for natural gas as a result of a strong economy and a rapid increase in new gas-fired electric-generation projects worsened the situation, driving prices skyward.
Prices have also risen sharply for heating oil, propane, kerosene, gasoline and aviation fuel this year.
Natural-gas costs account for about two-thirds of Piedmont Natural Gas's total bills to consumers, with the rest going to cover the cost of delivering the gas -- its primary business.
Piedmont Natural Gas buys its supplies on the open market. Prices have doubled for the company since last year, and would have been even higher had it not bought some of its gas at lower-than-current prices for storage.
"Although Piedmont secures its gas supplies at the lowest possible cost, it has little control over national wholesale-market prices," the company said.
The company does not earn a profit on the increased wholesale costs, which it passes on to customers on a dollar-for-dollar basis. The company also passes along any wholesale gas cost decreases, when they occur, directly to customers. Piedmont Natural Gas is urging customers to conserve energy this winter. The company offers energy-assistance programs for low-income customers, including alternative payment arrangements for those unable to pay their bills when they are unusually high.
If low-income customers find themselves unable to pay their gas bills on time this winter, they can call the company at 800-752-7504 between 7 a.m. and 9 p.m. to work out an alternative payment plan, rather than letting their bills go unpaid.
The company's 17-year-old "Share the Warmth" program encourages people to join Piedmont in making donations to locally operated non-profit organizations that assist low-income customers in paying their energy bills, no matter what type of energy they use to heat their home.
-- Martin Thompson (email@example.com), October 06, 2000