Cold spell brings gas price hike

A colder-than-normal winter is hitting Indiana consumers with a double-whammy: heating bills inflated both by greater energy use and higher natural gas rates.\nThe rising demand resulting from the steep drop in temperatures could push natural gas prices above the level of the winter increases that Indiana utilities forecast three months ago, state utility regulators and industry officials say.\n"When it is as cold as it is, and when gas companies are having to pay more for the gas they use, customers will see a jump in their bills," Mary Beth Fisher, a spokeswoman for the Indiana Utility Regulatory Commission, said Friday.\nIn October, the Northern Indiana Public Service Co. predicted its gas heating costs would jump 45 percent compared with the previous winter, which was unusually mild with lower-than-normal gas bills. Another utility, Vectren, predicted price increases of 16 percent to 20 percent.\nBut those forecasts assumed typical winter temperatures and average gas demand, neither of which has panned out. Those factors have fueled increases in the price of wholesale gas supplied to utilities, which make some of their purchases on a spot basis and some through future contracts months before delivery.\n"When you add all these factors, clearly consumer bills are going to be higher than the earlier projections, " said Mike Roeder, a spokesman for Vectren, which serves about 640,000 customers in Indiana, mainly in central and southern areas.\nRegulators and utility spokesmen did not venture estimates as to how high rates might rise above earlier projections.\nThis winter, spot wholesale gas prices in the Midwest have hovered around 65 cents per therm -- a measurement unit of natural gas. That compares with 37 cents to 38 cents last summer, when demand was far lower, said Tony Dzwonar, a spokesman for the Indiana Utility Consumer Counselor, an office representing consumers on utility issues.\nDespite the rise, wholesale gas prices were about twice as high in the winter of 2000-2001, said Fisher, of the IURC.\nThat winter, the average monthly bill for NIPSCO's more than 700,000 gas customers in the northern third of Indiana was $158. The utility projected last fall that its customers' average bills this winter would be $127, up from $87 last winter.\nDepending on the utility, it may be a few months before customers see bills reflecting winter rate increases. Some utilities change rates to adjust for fluctuating wholesale costs on a quarterly basis, while others do so monthly.\nOfficials said the expected spike in prices this winter could lead more customers to switch from billing plans that vary each month with usage to balanced plans that spread a year's costs equally over 12 months.\nCustomers also can expect to see higher electricity costs this winter, but only from increased use, not from higher rates, Fisher said.\nLast week's cold snap, which sent temperatures dipping below zero across much of the state, led to record or near-record energy use in some areas.\nVectren's natural gas distribution over 24 hours reached 1.68 billion cubic feet on Thursday, breaking the previous record of 1.56 billion cubic feet set Dec. 19, 2000, Roeder said.\nIndianapolis Power and Light, serving 450,000 customers in Indianapolis and Marion County, also reported record electricity consumption on Thursday.\nNIPSCO and Citizens Gas & Coke Utility, which serves 262,000 customers in Marion County, reported high gas usage that fell short of records.