HU: Gas rates could double
Clif Knight, Hartselle Enquirer
Heating with natural gas this winter will cost Hartselle Utilities customers at least twice what it did a year ago, and it could be even worse if supplies remain low and the fall and winter months are colder than normal, according to Ferrell Vest, general manager.
The bad news is largely the result of a highly unstable natural gas market brought on by hurricane damage to production and transportation facilities in the gulf coast region.
"We're totally dependent on the central gulf for our gas supply and that area was hard hit by Hurricanes Katrina and Rita," Vest pointed out. "Assessments of the damage are still being made and many operations both on land and offshore are still shutdown. At last report the volume of gas coming out of the region was down 78.56 percent.
"We're witnessing one of the most uncertain and unpredictable situations gas producers and suppliers have gone through in a long time," he added.
Vest said the commodity futures price for gas Sept. 28 was $16.54 per 1,000 cu. ft., up $1.94 from the previous day. The price was $6.21 per 1,000 cu. ft. in January 2005.
"The cost of gas adjustment (HU's operations cost) will not go up," Vest stated "but we have no control over what we have to pay for gas and have it delivered."
"We have a small amount of stored gas that was purchased when rates were in the $6-$7 range," he added. We'll blend it in with higher priced gas during the winter months when the demand is highest. This will help our customers some but unfortunately it won't come close to offsetting the prices we're seeing today."
"The best case scenario for the gas customer is a fast recovery by the companies that produce, process and transport natural gas and a mild winter" Vest stated. "The worst case
is a limited supply and a harsh winter."
Hartselle Utilities is not alone in advising its customers to be prepared for higher heating costs in the coming months.
The city of Huntsville and the North Alabama Natural Gas District, which includes the cities of Athens and Madison, recently announced an increase from $9.95 to $14.95 per 1,000 cu. ft. for natural gas.
Simultaneously, consumer watchdog organizations such as the American Council for an Energy-Efficient Economy, are advising homeowners to close in and seal off drafty spots around the house and add insulation to the attic. The also recommend having heating systems tuned up to ensure peak operating efficiency.