Chattanoogans see natural gas price jump

By Mike Pare

Staff Writer

Some Chattanooga Gas Co. customers have seen their monthly heating bills double this winter due to both a boost in prices and the bitterly cold weather, company officials said.

"This is the coldest December, I think, in two decades," said Paula G. Rosput, president and chief executive officer of Atlanta-based AGL Resources Inc., the parent company of Chattanooga Gas.

Ms. Rosput, who was in Chattanooga earlier this week to meet with business people and political officials, said the company has been hearing from its customers.

"It's been a shock," she said of the price increases. "Everybody's talking about it."

She blamed a combination of factors revolving around high demand and low supply. But Ms. Rosput disputed claims that the deregulation of natural gas service in Georgia caused prices to rise.

"We had five years in this country of virtually no winter and not that much demand in the summer," she said.

This past summer saw high demand due to heavy power plant loads, and that has been coupled with the deeply cold winter. "Frankly, production has not kept up with demand," she said.

Larry Buie, the new general manager for Chattanooga Gas, said suppliers became somewhat lax over the years in terms of drilling for the fuel. He said it may take 12 to 18 months before the effect of higher production is seen in people's residences.

"Most of the bills have had increases in volume," said Mr. Buie, who recently joined Chattanooga Gas as its top official from Southern Natural Gas Co.

More months of higher gas bills is not what users want to hear.

"Last month, the bill was twice as much as the previous two months," said gas customer Bob Waddell.

He quipped that his brother-in-law told him recently that he's scared to open his bill.

"We're just cutting back, making sure the thermostat is turned down," said Mr. Waddell.

Another gas user, Felicia Lewis, said her last bill was $130. She usually pays $70 to $80 during winter months.

"We wear warmer clothes, like sweaters," she said.

Not just residential customers are hit by price hikes. Industrial users, too, are trying to adjust to the higher costs.

Robert Holcombe, Mueller Co.'s Chattanooga plant manager, said he's talking with his comptroller to determine the impact of gas prices and how the higher costs will impact the facility's bottom line.

"It's taken a pretty big jump," said Mr. Holcombe. He said the foundry uses natural gas to heat the plant.

Officials with Chattanooga Gas, which services over 57,000 customers in Southeast Tennessee, said there's little the company can do operationally to help users.

Mr. Buie said its employees who work with customers on a day-to-day basis are giving out the telephone numbers of agencies who can financially help low-income people and the elderly with their bills.

One complicating factor in Georgia has been the fact that the natural gas industry is deregulated there. In Georgia, customers can choose from a number of marketers of gas. In Tennessee, prices are set by the state Public Service Commission and residential users have one supplier.

Ms. Rosput said deregulation is not why bills have risen.

"This year's price increase has been so dominated by wholesale prices, it doesn't matter what the framework for regulation is," she said.

She said everybody's natural gas bills are up.

"It's no difference that everybody's bill for driving a car is up, too," said Ms. Rosput.

Deregulation, she said, has been by and large successful for consumers from the standpoint of choice.

But the company officials said there's been little interest in Tennessee to deregulate the industry.

http://www.timesfreepress.com/2001/jan/13jan01/webNATURALGAS.html

-- Martin Thompson (mthom1927@aol.com), January 13, 2001