Home heating bills to rise 10% Supply-demand drives the price

By DON SHILLING

VINDICATOR BUSINESS EDITOR

Turning up the thermostat will cost a bit more this winter.

Federal officials predict Midwest homeowners will pay 10 percent more to heat their homes with natural gas.

Colder weather and higher gas costs are expected to push heating costs from October to March to a total of $1,045, up from $938 last heating season.

Much depends, however, on how long the mild weather holds out.

“How quickly cold temperatures come in will determine what prices will be,” said Neil Durbin, a spokesman for Dominion East Ohio.

A blast of cold weather early in the season can cause prices to shoot up quickly because gas supplies will be reduced, he said.

The federal Energy Information Administration notes that federal forecasters are expecting overall temperatures to be 4 percent lower in the continental U.S. this winter, although they still would be higher than the nation’s 30-year average.

Those lower temperatures are expected to cause Midwest homeowners to use 3 percent more gas this winter than they did last winter, the EIA said. On top of that, the cost of gas is expected to be 8 percent higher than last winter.

East Ohio is charging $8.71 per thousand cubic feet of gas for customers who buy their gas from the utility, compared with $8.59 a year ago. About two-thirds of the company’s customers buy gas from marketing companies, who set their own prices.

A year ago, prices were held down by mild weather. November and December were so mild that storage levels remained high and prices charged to consumers fell significantly in January. East Ohio’s charge dropped to $7.28. Prices rose in the next two months but didn’t go above $8.99.

Valerie Wood, president of Energy Solutions of Verona, Wis., said she expects a repeat of last season.

Right now, storage levels are high, just like they were last year. She’s been reading forecasts that are calling for warmer-than-normal weather in January and February. If that happens, natural gas costs could go down.

The EIA said the amount of gas in storage this fall is expected to be just short of the record set in November 1990.

On the demand side, total natural gas consumption is expected to rise 4.6 percent this year because of increased use by homeowners, industry and electric power plants, the EIA said. The agency said, however, that demand is expected to increase less than 1 percent next year if normal weather patterns hold up.

Wood noted there is one other variable that could push down natural gas costs — a recession. If commercial and industrial demand for gas drops, prices will fall, she said.

shilling@vindy.com