Seniors left out in cold as energy rates skyrocket

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Seniors left out in cold as energy rates skyrocket

By David Montero Ventura County Star writer Monday November 13, 2000

Juanita Monaco has been making tough choices all her life, but this winter she is facing a no-brainer.

She will bundle up with sweaters rather than turn on her heater to keep warm during the cold winter months.

"On Social Security, you don't waste your money,"the Oxnard resident said. "And keeping warm is a waste."

Monaco, 77, is living on a fixed income of $700 a month. Once rent, health and car expenses are carved out, she said she's lucky to have "$10 left at the end of the month."

She is also lucky she isn't using natural gas to heat her home right now.

Natural gas providers are warning customers their bills could jump by as much as 50 percent this winter, causing concern among low-income and fixed-income people who rely on that energy to heat their homes, cook their meals and warm their showers.

Monaco's apartment uses electricity for everything, so she will escape the high natural gas costs this winter.

But electricity costs are also expected to skyrocket once Southern California Edison and Pacific Gas &Electric can prove to the California Public Utilities Commission that they can no longer afford to buy power at extremely high prices and sell it at regulated rates and absorb the debt -- estimated by both providers to be more than $5 billion.

The natural gas increases, coupled with a looming electricity increases and rising oil prices are creating an energy crunch that has low-income and fixed-income households worried about keeping up with the cost of living.

Monaco said high gas pump prices -- averaging $1.86 a gallon in Ventura County -- have even stopped her from driving about 14 miles round trip from her apartment to St. Johns Medical Center for rehabilitation on her hip and leg because she can't afford to fill up her car.

Olive Edman, an 81-year-old who lives alone in Oxnard, said her health care premiums have jumped up and an additional utility hike would easily surpass her 3 percent Social Security cost of living raise in January.

"How do they expect us to pay for all of this?"she asked.

Consumer advocacy groups, while furious with the crisis that saw San Diego customers paying hundreds of dollars for electricity bills this summer, say the natural gas crunch is actually a legitimate hike.

"I'm usually the first to bash the utilities, but in this case, natural gas providers are just passing on the costs," said Nettie Hoge, executive director of The Utility Reform Network. "There's not much they can do."

Denise King, spokeswoman for The Gas Co., said the jump in costs reflects a lack of supply at a time of year when demand begins to kick into high gear -- traditionally the winter months.

This summer, peak usage of natural gas in The Gas Co.'s system for the first time exceeded the previous winter's peak, officials said.

King said Southern California is less likely to be hammered by demand, however, because of the region's typically mild climate. She said the company's 5 million customers, which include Los Angeles, Ventura and Orange counties, began being notified of the increases in October.

The major natural gas supplier in Northern California, Pacific Gas &Electric, said it began sending notices in customers' bills last month also telling them to expect increases as much as 50 percent.

"It's hard to predict what the weather will do," PG&E spokeswoman Staci Homrig said. "But we do know wholesale prices are double what they were last year."

Natural gas prices in September rose by 19.6 percent from the previous month and was up 32.3 percent from a year ago.

The escalating price is also expected to clobber those in much colder climates than those found in Southern California.

Economists on the East Coast believe a significant jump in the price of natural gas could make a dent in disposable income and have a short-term effect on the economy.

Professor Richard Sweeney, professor of finance at Georgetown University, said sometimes the spike in utilities ends up with people immediately spending on items like double-glazed windows and insulation.

"High utility costs aren't going to destroy the economy, but chances are, it will cause some losses that won't be made up,"he said. "It's like looking at the effect of a storm that shuts down the coast for a week. You know there's a bounce-back effect and there is more overtime on paychecks that allow for an economic catch-up. But you don't ever make it all up."

According to the most recent U.S. Department of Energy statistics, 54.5 million households used natural gas to heat their homes during the winter --easily outpacing traditional heating oil, which only accounted for 9.8 million households.

Dan Brewer, spokesman for the Department of Energy, said the government is expecting a colder-than-normal winter and it could have the biggest impact on utility bills in the East.

A report released this month by the Department of Energy revealed last year's winter was one of the warmest on record and demand this winter would be exceptionally high.

Rajeev Dahwan, director of economic forecasting at UCLA's Anderson Forecast, said even high demand and increased costs won't cripple the economy in the West because winters in Southern California tend to be mild.

"Ahigher gas bill would likely be the topic of polite conversation, but it's not going change spending habits out here,"he said. "Now, back East, where it might mean an extra $300 a month, it might have a little more impact."

Dahwan said the economy has been roaring along at such a rapid rate that the rise in prices are like tapping the brakes on a speeding car to get better control.

But, he said, eventually more power plants are going to have to be built to meet growing demands -- even though most industry officials believe that putting plants online is at least a few years away.

With huge power plants sucking natural gas to generate power to run more air conditioners and appliances this past summer, Homrig said most people probably didn't notice, but gas bills were higher on average this summer, as well.

But only San Diego residents felt the brunt of high energy costs because, as the price of electricity sold by companies like Duke Energy and NRG continued to skyrocket, the cost was passed onto Pacific Gas &Electric customers.

TURN has been lobbying the California Public Utilities Commission to keep them from passing on higher rates to consumers now. The commission has yet to make a final decision on Edison's attempt to accelerate its rate of recovery.

-- David Montero's e-mail address is dmontero@insidevc.com

http://www.staronline.com/news/349672.shtml

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-- Martin Thompson (mthom1927@aol.com), November 14, 2000


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