Black Hills offers lock-in price program for natural gas
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By ALGIZ J. LAUKAITIS / Lincoln Journal Star
Officially, it’s still summer.
Autumn-like temperatures in the final weeks of August have some people wondering: Are we in for a bad winter, and if so, will we pay more to heat our homes and businesses?
Probably.
Like its predecessor Aquila, Lincoln’s natural gas supplier, Black Hills Energy, is offering an Annual Price Option program that allows residential customers to lock in their natural gas prices for one year, beginning Nov. 1. Here are the details:
* Black Hills is offering an Annual Price Option program to its three rate areas: Lincoln, Walton and Cheney customers can lock in a per-therm price of $1.16931; Customers in Auburn, Aurora, Beatrice, Columbus, Fairbury, Norfolk, Seward, Wayne and York and all other areas, $1.15721; and Bellevue, Blair, Gretna, LaVista, Papillion, Plattsmouth, Ralston, Valley and Waterloo customers, $1.17174.
The current price of natural gas for August is $0.97537 per therm, but Black Hills officials point out that market prices can change quickly due to unforeseen events like hurricanes or sustained cold spells.
* Residential customers can sign up beginning Sept. 3 on the Internet at: http://annualpriceoption.com. Or they can complete and return a postage-paid reply card that will be mailed Sept. 2 thru 4.
* The program will be offered to the first 24,000 residential customers in Nebraska who sign up.
* Residential customers must enroll by Oct. 3 or before the enrollment cap is reached.
* Weatherization and energy efficiency tips are available at: www.blackhillsenergy.com.
* For additional information about the APO program, call 1-800-753-7509, 24 hours per day.
Industry experts say residential natural gas prices could increase by about 22 percent between October and March, compared with the same period last year.
“Right now they (natural gas prices) are in decline but they are still higher than a year ago,” said Bob McKeon, a spokesman for Black Hills Energy, the Rapid City, S.D., company that acquired Aquila’s operations in eastern Nebraska in July.
Natural gas supplies are looking good nationally, McKeon said, noting that 2008 and 2009 storage is back up, which will help mitigate spikes in the market. But the industry is seeing pressure from increased use by power and ethanol plants, he said. Severe storms in the Gulf Coast region, like Hurricane Gustav, also could pose a threat to production and future supplies.
A cold, long winter also could affect heating bills, but weather experts say it’s difficult to predict what will happen in December, January and February.
The National Weather Service’s long-range forecast states there’s a slight chance of above-normal temperatures for those months in the Lincoln area, said meteorologist Cathy Zapotocny, based in Valley.
State Climatologist Al Dutcher hesitated to go that far, noting that most of Nebraska has experienced below-normal temperatures in eight of the last nine months.
“It’s hard to go against that trend,” he said.
Citing current atmospheric conditions, Dutcher said, there is no sign that we are headed for a warming trend any time soon.
“Expect below-normal temperatures in the first half of winter, Dutcher said, and possibly lots of stormy weather.
Dutcher based his forecast in part on August’s cool weather.
“Everything is a few weeks ahead. What we’re seeing right now resembles early to mid-September weather,” he said last week.
The northern sections of Minnesota and Michigan have already had frosts, and that’s a full two to three weeks ahead of their normal freeze dates, Dutcher said.
“I hope it’s not a sign that it’s going to happen here in the Midwest,” he said. If it does, that could harm the corn crop.
Recently, Black Hills encouraged its customers to start thinking about the upcoming heating season and natural gas usage. The company serves nearly 200,000 customers in 110 communities.
Like its predecessor, Black Hills is offering customers a chance to lock in their natural gas price for one year regardless of whether the market price for natural gas goes up or down. The company purchased a special package of natural gas this summer, before the heating season, for its Annual Price Option program.
Residential customers can sign up for the APO program beginning Sept. 3. But it will be available only to the first 24,000 who sign up. Last year, 19,120 customers signed up for the program when it was offered by Aquila.
“We’re just providing the customers an option for the gas-cost portion of their bill,” said Don Nordell, director of business operations for Black Hills. “They don’t have to worry about hurricanes, severe weather or anything that would influence the national markets.”
The cost of natural gas makes up 80 percent of a typical customer’s monthly bill and the other 20 percent is made up of operational and administrative charges and taxes.
Black Hills also offers a budget billing program which allows customers to spread their natural gas costs over a 12-month period. Customers pay the same amount each month, but adjustments will be made if a natural gas bill changes by more than 10 percent in any month.
“It’s a terrific way to avoid the ups and downs on customer accounts,” McKeon said.
Black Hills is encouraging its customers to take steps to reduce their energy use this winter by installing energy-efficient water heaters, insulating attics and crawl spaces and turning down their thermostats to 68 degrees during the day and 64 degrees at night.
Reach Algis J. Laukaitis at 402-473-7243 or alaukaitis@journalstar.com.
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CS wrote on September 1, 2008 8:24 am:
DJ wrote on September 1, 2008 9:03 am:
Huh wrote on September 1, 2008 12:58 pm:
price for their benefit? You know like LES!!! "
whatever wrote on September 1, 2008 9:48 pm:
Aquila wrote on September 2, 2008 12:43 am: