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Utilities stress efficiency, conservation this winter

By Gargi Chakrabarty, Rocky Mountain News (Contact)

Published July 30, 2008 at 9:05 p.m.

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Jim Weingardt, Bestway Insulation contractor, left, and Cameron Pockrus insulate a Denver home.

Photo by Tim Hussin / The Rocky

Jim Weingardt, Bestway Insulation contractor, left, and Cameron Pockrus insulate a Denver home.

CLICK TO ENLARGE: Heating bills on the rise

CLICK TO ENLARGE: Heating bills on the rise

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Colorado homeowners will pay 20 percent more to heat their homes this winter.

That will be a sizable hit to the pocketbook, especially for low-income families who will pay 44 percent more - largely because they will receive fewer dollars in energy assistance. While more families are expected to apply for assistance, federal aid funding likely will remain the same.

Utilities blamed the rising cost of natural gas for the expected steep jumps in heating bills during a meeting with the Colorado Public Utilities Commission on Wednesday.

Most experts expect winter prices of natural gas in the Rockies to be up to 30 percent higher than last winter, utility executives told the commissioners.

"We want to be neither alarmist nor complacent," commission Chairman Ron Binz told the gathering. "We want to get the full picture to see what customers can do this winter to deal with higher gas prices and heating bills."

"What would be the single most important thing that customers could do to prepare for this winter?" Binz asked.

The answer: energy efficiency and conservation.

Dialing down thermostats at home and wearing a sweater helps, suggested Len Mize of SourceGas.

Opting for budget billing where customers receive an average bill each month reduces wild swings in winter bills, said Kevin Kerri gan of Atmos Energy.

"Customers who are considering higher energy-efficient furnaces or water heaters and are capable of installing those before the heating season will benefit," said Susan Arigoni, a vice president at Xcel Energy.

Also, utilities have hedging programs to deal with the volatility in gas prices, the executives said. Hedging is buying gas at a fixed cost for future delivery.

For instance, Xcel - Colorado's largest utility with 1.2 million natural gas customers - buys natural gas wholesale to fire its power plants and heat homes. The cost is passed through to customers, dollar-for-dollar, without any markup.

To save customers the wild fluctuations in price during winter months, Xcel hedges or stores natural gas as early as summer for winter use. But it also buys a small amount from the spot market at current prices.

Last month, the price of natural gas was hovering above $12 per million Btu (British thermal unit) on the New York Mercantile Exchange. It has softened since then to about $9. Consultants expect local prices this winter to range between $7 and $8.50, barring unforeseen events such as hurricanes or pipeline constraints that could change prices.

chakrabartyg@RockyMountainNews.com or 303-954-2976

Comments

  • July 31, 2008

    8:41 a.m.

    Suggest removal

    ffdwd writes:

    One of the benefits of the recent energy prise rises are people are finally showing signs of conservation. Until now, the populace complained about prices, but did not change their habits. This is all good given US Natural Gas prices are trading at a discount as compared to global pricing. Once the US has several LNG plants operating, the US Natural Gas price will rise even further. Conserving now will make the pain of higher prices easier to tolerate......