Columbia Gas rates might jump to all-time high; utility will seek $5 more than in 2004

8/16/2005

Columbia Gas of Ohio is asking for its highest monthly rate ever, which could cause the average September bill to jump nearly $5 from the same period a year ago.

The utility filed a request yesterday with the Public Utilities Commission of Ohio, seeking to charge $1.14 for 100 cubic feet of gas next month, up from the previous record of $1.06 this month and from 91 cents last September.

The average Columbia Gas of Ohio bill next month will be $33.90, up from $29.04 a year ago and $32.28 this month, said Ray Frank, a Columbia Gas spokesman.

Bills for both August and September are based on the same amount of average use.

"Any time a gas company raises its rates, it's bad news for the consumer," said Ryan Lippe, spokesman for the Ohio Consumers Counsel. "And the fact is, we expect prices to stay high this winter.

"We don't want to scare people, but you're going to be paying a lot this winter for gas and you're going to have to try and conserve as much heat as possible," Mr. Lippe said.

Prices continue to be high as hot temperatures tax elec-tric-generation plants fueled by natural gas and as other weather problems such as hurricanes cause speculation about whether supply can sidestep the disruptions to meet demand, Mr. Frank said.

Reduced coal deliveries nationwide have forced some regions to replace coal-powered electricity generators with gas-fired units.

Natural gas prices are expected to rise further as the winter heating season further increases strong demand, according to the Energy Information Administration.

Columbia Gas has often had higher rates in recent months than some nearby utilities because - in addition to the market volatility - it tends to buy more natural gas on the spot market and has less in storage than its counterparts in the industry.

PUCO spokesman Shana Eiselstein said the commission monitors natural gas markets to ensure that Columbia Gas requests stay in line with market prices.

July was the first month Columbia Gas of Ohio's price passed $1, at $1.01 for 100 cubic feet.

In November, the PUCO rejected a rate request for December bills of 99 cents, causing the request to be revised downward and for the utility to switch to monthly rate requests rather than quarterly ones.

U.S. natural gas prices are up more than 30 percent in the past three weeks alone, thanks to record demand that coincided with snags in deliveries of coal to power generators.

Contracts for gas surged above $10 per British thermal unit for November through March. Before this summer, benchmark gas futures had never crossed the $8 barrier in the summer.

Nearly a quarter of U.S. gas demand is for residential home heating, according to the American Gas Association, an industry group.

An additional 18 percent is used for power generation. Industry consumes a third.

Mr. Lippe, of the consumers' counsel office, said natural gas customers right now need to be thinking about how to conserve energy this winter, suggesting they explore budget plans and offers from other suppliers, assistance programs for low-income residents, buying a new furnace or replacing a filter on an existing one, or installing a programmable thermostat.

"It's important now more than ever that we in Ohio are at least being proactive in doing what we can to increase our energy efficiency," he said.

Mr. Lippe said consumers who have concerns or are looking for energy-saving suggestions can check out his group's Web site at www.pickocc.org or call 1-877-742-5622.

Contact Julie M. McKinnon at

jmckinnon@theblade.com

or 419-724-6199.