Local natural gas to rise relatively low 20 percent

Before Hurricane Rita hit the Gulf Coast during the early a.m. Sept. 24., the Federal Energy Information Administration predicted a natural gas price increase of 71 percent or more this winter due largely to damage caused by Hurricane Katrina.
But even before Katrina wracked New Orleans and flattened much of the Mississippi coastline, Corydon-based Indiana Utilities was using ‘hedging techniques’ to purchase gas for the winter months, manager Frank Czeschin said.
As a result, the company is requesting a significantly lower-than-average 20 percent rate increase which will be reviewed by the Indiana Utilities Regulatory Commission.
‘Obviously, 20 percent is not good news,’ but comparatively speaking, Czeschin said, it’s better news than most gas customers will be getting this winter.
On Sept. 20, U.S. Sen. Evan Bayh, D-Ind., urged the Senate Appropriations Committee to include $1.2 billion to help families across the country with rising natural gas costs as part of a comprehensive hurricane supplemental bill.
The FEIA now predicts that natural gas prices will increase 77 percent or more this winter in the Midwest.
An increase of 20 percent is not guaranteed for Indiana Utilities customers.
‘Obviously, if it is a harsh winter, the demand is going to rise and typical economic fundamentals tell you the price is going to rise,’ Czeschin said.
By the same token, he said, a mild winter could result in lower rates.
Indiana Utilities is also currently enrolling customers in its budget billing program which helps customers keep rates consistent year round.
‘Typically, we encourage our customers to start budget billing in the summer to build up a credit,’ Czeschin said.
Energy experts agree, however, that this year is far from typical.
The FEIA said price hikes will depend on how quickly oil rigs and Gulf Coast refineries can be repaired.
Pacific Gas & Electric was reporting a 70.8 percent increase this October when compared with the same month last year.
PG&E is one of the largest combination natural gas and electric utilities in the United States. It serves about 15 million people throughout a 70,000-square-mile service area in northern and central California.
The company largely attributed the increase to Hurricanes Katrina and Rita, which it said, ‘hit at the heart of America’s energy infrastructure, causing widespread damage to natural gas rigs and facilities.’
As of Sept. 30, PG&E said, 72 percent of the 819 manned natural gas platforms in the Gulf of Mexico were off-line, hindering 80 percent of daily gas production in the region.