New bills give gas Ohio customers a major chillgreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
Article published December 19, 2000
New bills give gas customers a major chill
BY GEORGE J. TANBER BLADE STAFF WRITER
Disabled and unemployed, Mary Cain has counted on relatively low heating bills the past few mild winters to help her get by on a modest fixed income.
Those days are over - with an exclamation point.
The bill Ms. Cain held in her hand yesterday afternoon made her gasp as though she had walked coatless into the dayís frigid air. For the tiny one-bedroom South Toledo home she rents, the tally read $167, which is more than four times what she paid the previous month.
"I just canít afford it," she said. "But what can I really do? My hands are tied."
Throughout northwest Ohio and across the state, consumers like Mary Cain are discovering itís going to cost considerably more to heat their residences this winter. And probably next year, too. Colder weather and exploding natural gas prices are the culprits.
Consumers - especially those who live in older, inefficient homes - are seeing their bills doubling and even tripling from last year.
Michigan consumers, however, have been spared for now. Prices there were fixed three years ago, leaving rates at nearly a third of what most Ohioans are paying.
Delores Staniszewski of West Toledo, who is retired and on a fixed income, had an experience similar to Ms. Cainís. Her bill went from $86 last month to $253 for the one she received on Thursday.
"I opened it and then I sat down," she said. "Horrendous is a good word [to describe it]."
Like Ms. Cain, Ms. Staniszewski isnít sure what do about it. She doesnít know how to shop among the 11 so-called budget natural gas suppliers and is opposed to going on a monthly budget - which results in a fixed, monthly bill year-around.
"Why should I pay a bigger amount in summer when I donít use it?" she asked.
Not surprisingly, thousands of homeowners who received their bills over the weekend rushed to their phones yesterday morning to vent to their natural gas provider.
"Itís been literally ringing off the hook," said Steve Jablonski, a spokesman for Columbia Gas of Ohio, which provides natural gas to about half of the homes and businesses in Lucas County.
Frustrated consumers who used to be able to complain to Columbia Gas officials in person at the companyís North Erie Street location no longer have that option because that office was closed last summer. Calls now are routed through a Toledo number to the companyís Columbus office.
Mr. Jablonski tried to put the situation into perspective.
"From the consumer point of view, the last few years have been the best of all possible worlds. There has been a combination of low [natural gas] prices and low consumption, which has resulted in low bills," he said.
"Now we have gone to the other end of the spectrum, with high consumption and high bills. That has resulted in sticker shock for a lot of people, myself included," Mr. Jablonski.
Officials at Waterville Gas Co., which will send its new bill out next week, expect a similar reaction from its 3,000 customers.
"Weíre expecting consumption to be up 20 percent from a year ago and natural gas prices 50 percent higher," Rob Black, president of the company, said.
"[So far], this is the coldest December weíve had in 30 years," he said.
As for the suddenly high cost of natural gas, Mr. Black said the past decade was so mild the resulting low demand kept companies from drilling for more supplies.
"There was no incentive," he said.
Suddenly, with cold weather upon us, the demand is there but not the supply, causing prices to soar.
Adding to the dilemma, according to Mr. Black, construction of new electricity plants powered by natural gas have surged in recent years, putting an additional strain on gas supplies.
"Thereís a huge requirement to power these plants," he said.
When deregulation occurred in the natural gas industry in 1997, giving Ohio consumers the ability to shop for the best prices, Columbia Gas eventually lost about half its customers, although it still owns the gas lines and sends out the bills.
Initially, some consumers were able to get reduced rates - some of them significantly less than what Columbia Gas offered. But the new providers asked consumers to sign contracts for one to three years, after which they could raise their prices to reflect current market rates.
Greg Fish, owner of South Toledo Golf Club and Dome, locked in for three years at 32 cents per cubic feet, 41 cents less than the Ohio average of 74 cents.
However, Mr. Fishís contract with Enron expired this summer and heís not sure if he renewed it at a new fixed rate.
This is significant, he said, because it cost him $4,000 at the old rate in January to heat his dome, where golfers can hit balls inside.
"Iím kind of concerned," he said. "I hope it doesnít go up [too much] or weíll have to raise our prices."
Some consumers had the good fortune to lock in lower rates last summer that could last up to three years. There is no way to know how many have done so.
Of the 11 so-called discount natural gas providers, only one is selling gas for less than 70 cents per cubic feet. Interstate Gas Supply is offering gas at 66 cents per cubic feet, but if you sign up today the rate wonít take effect until Feb. 1, a company spokesman said.
One company, FSG Energy Services, which was selling its gas at 68 cents per cubic feet this month, is not taking new customers.
A company spokesman said FSG might take new customers next month, but at an undetermined new rate.
Michigan consumers, though benefiting from the wisdom of the stateís three natural gas providers to lock in a rate of 28 cents per cubic feet in 1998, likely will pay more beginning in March.
The companies have asked the state to allow them to raise their prices to 56 cents a cubic foot, still a bargain compared to Ohio rates.
"We donít know what the market is going to do. We hope it will move down so we can charge less," said Jeff Holyfield, a spokesman for Consumers Energy.
In northwest Ohio, the future is equally unclear, according to Mr. Black.
"As soon as you get producers to drill for more gas and more gas comes on line, you will see a drop-off in prices. This year and next winter, you will see high prices. Then it will drop down to about 15 to 20 percent higher than it was last year," he said.
Staff writer Michael D. Sallah contributed to this report
-- Martin Thompson (email@example.com), December 19, 2000