Heating to cost an extra billion

By MARY CHALLENDER Register Staff Writer 03/03/2001 -------------------------------------------------------------------------------- Iowans will spend an extra $1 billion to heat homes and businesses this winter because of skyrocketing natural gas prices, a state official said.

Ward Lenz, an energy data analyst with the Iowa Department of Natural Resources, said Iowans consume about 270 billion cubic feet of natural gas at a cost of about $1.1 billion in an average year.

"We have about the same consumption this year but we're pretty much double on the cost," Lenz said. "It's going to cost like an extra billion."

This means approximately 2 percent of Iowa's $84 billion gross state product will go to pay for natural gas.

Combined with electricity costs, which also went up because of the cold weather, the total economic impact on the state could be more than $1.7 billion, said Ken Stone, an Iowa State University economist.

When increased gasoline prices are included, Stone said, the total is 11 percent of the $28 billion total taxable sales in Iowa last year.

"It's not a pretty picture," he said.

Parts of the economy already are showing the effects. Sales-tax collections, up 1.9 percent in January and February compared with the same months last year, have failed to meet expectations.

Bankruptcies were up 51 percent in January from the first month of 2000. The number of housing permits was down 2.5 percent, though the value was up substantially.

Many Iowans predict the months ahead will be hard as they struggle to regain their financial footing.

Deena Edelstein, owner of a Duds N Suds laundry in Des Moines, said it will take most of the year to rebuild her personal savings account after withdrawing $2,000 to pay a $4,000 January utility bill for her business. She also had to ask her landlord for a rent extension.

"I lost sleep for probably two nights just worrying about, if it stayed this way, how was I going to survive," she said. "Not only was my store's utility bill extremely high, but my home was also."

Tom Shinkle, pastor of Calvary United Methodist Church in Le Mars, is praying revitalization efforts at his church, which has 11 furnaces, will survive a 174 percent increase in its monthly utility bill.

"We were back on the road to good things and growth, and this kind of hit us and slammed us against the wall," he said. "I think, in some ways, it's going to be month to month here. But we are a church and we're facing this faithfully."

Delfina Perez is considering selling her house. The Des Moines mother of three said she has paid as much of her utility bill as she could each month but still owes $1,200 to MidAmerican Energy.

"I want to sell the house because I don't have money now to repair it," she said.

Even Iowans who were insulated somewhat from high heat prices this winter may find themselves sharing in the pain.

Alliance Realty Co. operates about 500 properties in the Des Moines area. Like most of the older apartments in the area, about half the Alliance properties have heating costs included in the rent, said property manager Jim Shipley.

Shipley said increased natural gas costs eventually will translate into higher rents at many apartment complexes, though he said Alliance has no plans right now.

Edelstein said she's already raised the rates on washers at her laundry from $1 to $1.25.

"I feel bad because most of my customers really can't afford washers and dryers," she said. "They're having to pay higher prices at home and now having to pay higher prices for a basic need like doing laundry. It's a chain of effects and the bottom line is the consumer gets it all the way around."

http://www.dmregister.com/news/stories/c4789010/13969379.html

-- Martin Thompson (mthom1927@aol.com), March 04, 2001

Answers

The answer is simple, corn burning fireplaces. Installation is simple, they don't need a flue, just a vent to the outside. As for the laundramat, I don't have an answer for that but solar energy would work for a laundramat in the sunbelt. Iowa, I don't think so, maybe just during the summer.

-- Guy Daley (guydaley@altavista.com), March 05, 2001.