Millions Face Gas Cutoffs High Winter Prices Mean Fewer Can Pay By Peter Behr Washington Post Staff Writer Friday, April 6, 2001; Page E01

The winter surge in fuel prices has left 3.6 million low-income people in 19 states and the District with $870 million in unpaid heating bills and a potential cutoff of utility service, according to a survey of state heating assistance programs released yesterday.

Washington Gas Light Co. this week sent cutoff warnings to 5,229 D.C. customers, the study by the National Energy Assistance Directors' Association reported. Washington Gas spokesman Tim Sargeant said the notices were reminders that customers were behind in energy payments and that their service would be cut off unless they paid their bills or made payment arrangements with the utility.

"Because natural gas prices doubled this winter, the amount of past-due bills is much higher, and so is the number of people who can't pay these debts off," said Mark Wolfe, executive director of the association.

A number of states do not permit termination of heating services during winter months and some utilities, including Washington Gas, voluntarily keep gas flowing to customers with past-due bills during that period. But these grace periods typically end on March 31 and utilities have begun pressing for payment, Wolfe said.

Gas heating bills shot up across the country with the early arrival of cold weather last November. Utilities, fearing they might be caught short of fuel, hurried to buy more gas and prices soared briefly to more than three times levels a year earlier.

Nationwide, consumers' energy bills this year are expected to be about $150 billion higher than a year ago, said David Wyss, chief economist for Standard & Poor's Corp., with large increases in both heating and air-conditioning charges feeding the increase.

Many low-income families let heating bills pile up during the winter, expecting to pay them off when cold weather ends, Wolfe said, and utilities typically can arrange extended payment plans.

But the size of the unpaid bills at the end of the past winter makes that financial burden much greater. "Somehow these bills will probably get paid, but it will come from somewhere" through reduced spending for other family needs, he said.

Wolfe's association last month surveyed its members -- the state and city agencies that administer the federal Low Income Home Energy Assistance Program, which helps eligible families pay heating and air-conditioning bills.

The program's nationwide caseload jumped by 30 percent in the 2000-2001 winter heating season, to 4.9 million families from 3.8 million in the 1999-2000 season.

Funding for the program was increased to $2.2 billion this year from $1.1 billion last year. But that's not to cover this winter's higher energy charges, Wolfe said. "The structure of the program was based on lower energy prices," he said.

High heating bills have not been the only disruption for local gas customers this winter.

PowerTrust, a Reston-based company, this week closed down a natural gas marketing business that it said had served as many as 10,000 customers in the Washington metropolitan area during the past year, in competition with Washington Gas.

An acrimonious dispute with the D.C. People's Counsel and a billing quarrel with Washington Gas, forced it to abandon the business, said Sean Collins, PowerTrust's vice president.

D.C. People's Counsel Elizabeth Noel said PowerTrust retreated in the face of criticism and legal action.

The privately owned company had entered the market as the region's natural gas service was opened to competition in the late 1990s. Last year it sold gas under fixed-price contracts for as low as 30 cents a therm -- a standard heating unit -- when Washington Gas charges were two and three times that amount.

"It was a tough winter to be a gas retailer," said Collins, whose company had to buy gas at high wholesale prices. "But we have thousands of customers who saved a lot of money this winter."

The D.C. People's Counsel accused PowerTrust of using deceptive marketing tactics in persuading District residents to switch from Washington Gas to their competing service -- a charge PowerTrust denied.

"They're bad actors," Noel said. "If they're gone, good."

Collins said the counsel's action was politically motivated to bolster a case to raise its budget.

About 5,000 PowerTrust customers have been moved back to Washington Gas.

-- Guy Daley (guydaley@altavista.com), April 06, 2001