Mild summer to cause lower natural gas prices this winter

After several years of rising prices, natural gas bills in Indiana are expected to stabilize this winter and should remain about the same as last season, according to one utility and an agency that tracks gas prices.\nNorthern Indiana Public Service Co. expects the average bill for January -- usually the coldest month -- to run about $174 for the company's 730,000 natural gas customers across northern Indiana. That amount is virtually even with January 2003.\n"The caveat to that is, of course, if we find ourselves in a cold winter," said Douglas Walker, director of energy supplies for NIPSCO, which released its annual projection for winter gas prices Monday.\nIf the winter is colder than expected, customers would use more natural gas, driving up prices, Walker said.\nNIPSCO's projections are in line with a recent report by the federal Energy Information Agency that predicted natural gas prices this winter will be about 10 to 15 percent higher than in the winter of 2002-03.\nIn June, the U.S. Department of Energy predicted prices could be as much as 80 percent higher this year. But the wholesale price for natural gas hit a six-month low last week, and price increases are expected to be moderate in the coming months.\nLast winter, as temperatures dropped to record lows, gas inventories were squeezed to levels 40 percent below normal.\nThe limited supplies caused unstable prices in the commodities market. The volatility became such a concern that federal officials worried about the possible threat to the economy.\nMild summer weather helped the situation by reducing demand and allowing utilities to make up their low inventory levels, Walker said.\n"That's sort of the good news. We don't have a surplus of supply, but we're in a good balance right now," Walker said.\nFuture prices might also be helped by changes in NIPSCO's buying policies resulting from a recent decision by Indiana Utility Regulatory Commission.\nEarlier this month, the commission ordered NIPSCO to refund $3.8 million to customers as compensation for too-high rates charged in March. The refund averaged about $3.60 per customer and will be issued to customers through gas-cost adjustments in November, December and January.\nThe commission also ordered changes in the way NIPSCO accounts for its in-storage gas prices and asked for some changes in the utility's buying practices.