Assistance group sees higher heating costs
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By ALGIS J. LAUKAITIS / Lincoln Journal Star
Autumn has barely begun but there’s already speculation — and worry — about how much it’s going to cost to heat homes this winter.
The National Energy Assistance Directors’ Association, a group of state officials and tribal directors who help low-income families pay their utility bills, issued an early warning Tuesday, saying the average U.S. household will pay record heating costs, up $94 or 10.5 percent more, compared to last winter.
Nationwide, natural gas costs are expected to increase by 5 percent, propane by 29 percent and heating oil, 28 percent, the Washington, D.C.-based group said in a news release.
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The projections are very preliminary. The U.S. Energy Information Agency, which tracks fuel supplies and market conditions, won’t release its official forecast for winter heating bills for two weeks.
Alan Hersch, a spokesman for Lincoln’s natural gas supplier, Aquila, said customers can expect their bills to be about the same as last winter. Regional differences in fuel prices may be one reason why costs could be lower here.
“Really, (natural gas) prices are tracking about even with last year, if not slightly below,” he said.
The assistance directors’ projections, even if preliminary, have Clarice Mackey, who coordinates the Salvation Army’s local Heat Share program, concerned about this winter.
“Our Heat Share appointments and needs are greater than ever,” she said. “We are getting calls every day.”
The Heat Share program relies on donations and contributions from Aquila customers to help pay utility bills. Mackey said the program helps low-income families not just in winter but all year long.
“We are still helping people with bills from last winter,” she said.
In Nebraska, about 66 percent of the homes are heated with natural gas, 9 percent with propane, 21 percent with electricity, 1 percent with fuel oil and the rest from other fuel sources.
For the 10th year, Aquila is offering its residential customers in Nebraska a program to “lock in” the price of natural gas for the winter heating season.
So far, about 13,000 residential customers have enrolled in the Annual Price Option (APO) program, Hersch said.
The lock-in price for customers in Lincoln, Walton and Cheney is 89 cents per therm, compared to last year’s price of $1.05.
Why the drop?
“The supply picture in 2007 has been very favorable to customers and utilities,” Hersch said. “We continue to have record underground storage in the country and record gas production domestically.”
Aquila’s residential customers in Auburn, Aurora, Beatrice, Columbus, Fairbury, Norfolk, Seward, Wayne and York, are being offered 86 cents per therm, compared to $1.12 last winter.
The APO program, formerly called the Fixed Price Option, is limited to 24,000 residential customers statewide on a first-come, first-served basis.
Aquila serves almost 200,000 customers in 110 communities in Nebraska but is limiting enrollment. The company has said it is doing so to ensure an adequate gas supply for customers who sign up.
The enrollment deadline is Oct. 12.
Customers can sign up by using the postage-paid reply card which was mailed to their homes or they can visit: www.annualpriceoption.com. They cannot use a phone to sign up.
Prior to each winter heating season, many customers try to determine which is the better deal: locking in a set price for their natural gas or going with the traditional program, in which Aquila sets the price.
Looking for the better deal shouldn’t be a consideration, Hersch said.
“The fixed price program is buying piece of mind so they (customers) control the largest portion of their gas bill,” Hersch said. “We again urge customers not to try to game the system or beat the market.”
The locked-in price covers about 80 percent of a customer’s monthly bill and does not include delivery and other costs. Aquila has said the natural gas costs are passed along to customers without markup.
Last year, a typical residential customer who stayed on the traditional program and used about 700 therms per year would have paid about $16 less for natural gas than someone who locked in a price, Hersch said.
Obviously, the weather plays an important role in natural gas bills, along with usage.
It is difficult to predict what kind of weather Lincoln and Nebraska will have this winter heating season. The National Weather Service’s Climate Prediction Center says to expect above normal temperatures through the winter.
However, state climatologist Al Dutcher foresees the possibility of much colder weather in Nebraska. He looked at temperature data since the 1950s and found seven years when weather patterns have shifted from an El Nino year to a La Nina year — like we are in now.
“In December, January and February (of those years), there was a strong tendency toward below normal temperatures and just slightly above normal precipitation, with January showing the strongest likelihood for exceptionally cold temperatures in five of those seven years,” Dutcher said.
January temperatures were less than 20 degrees and the average was 24 degrees during those years, he said.
“That’s pretty nasty cold,” Dutcher added.
Reach Algis J. Laukaitis at 473-7243 or alaukaitis@journalstar.com.
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