- The Washington Times - Monday, September 19, 2005

Area heating bills will jump 20 percent to 33 percent this winter, local energy companies warned yesterday.

Last winter, the typical Washington Gas residential customer paid $960 for natural gas for the six-month heating season, which runs from October to March.

The same customer can expect to pay $1,131 for heating if the weather is normal, and $1,274, or about 32 percent more, if the weather is 5 percent colder than normal.

More than 90 percent of D.C.-area residents use natural gas to heat their homes.

The National Weather Service is predicting a warmer-than-usual winter.

Even before Hurricane Katrina, natural gas prices were rising as utilities used the fuel to generate electricity for the nation’s growing industrial demands.

Hurricane damage to production facilities in the Gulf of Mexico, where one-fifth of the nation’s natural gas is produced, have further reduced supply.

Baltimore Gas and Electric Co. (BGE) said customers can expect to see increases of 25 percent to 33 percent this winter.

Washington Gas serves the District, Northern Virginia and much of the Maryland suburbs. BGE is the natural gas supplier for outlying areas of the Maryland suburbs.

The companies have been trying to create a buffer against the high prices by storing some natural gas during warm months when demand is low.

They also “hedge” costs by agreeing months in advance to buy gas from suppliers under fixed prices during the winter.

“Nearly 60 percent of the natural gas our customers will use this winter is protected against price volatility,” said Tim Sherwood, Washington Gas’ head of energy acquisition.

Nevertheless, energy companies say they are subject to the same market forces as their customers.

Utilities are adding to demand by using natural gas as a fuel for a greater percentage of the electricity they generate.

“Add to that the recent effect on production in the Gulf Coast region, and you have prices increasing,” said Tim Sargeant, Washington Gas spokesman.

Hurricane Katrina put an indefinite hold on new drilling in the Gulf Coast region and shut down some major natural-gas processing plants, which is driving up prices, said Johnny Magwood, BGE’s vice president of customer relations.

Gas customers nationwide are facing the same kind of price increases.

“You have rising demand and a shortage of supply, so we’re getting hit from both ends,” said Dan Donovan, spokesman for Dominion Resources, which supplies natural gas to customers in Ohio, Pennsylvania and West Virginia.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times is switching its third-party commenting system from Disqus to Spot.IM. You will need to either create an account with Spot.im or if you wish to use your Disqus account look under the Conversation for the link "Have a Disqus Account?". Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide