Natural gas prices beat the heat

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BY KEITH BENMAN
kbenman@nwitimes.com
219.933.3326 | Wednesday, June 04, 2008 | (30 comment(s))

For most people, the warmer weather is masking a run-up in natural gas prices that soon could make soaring gasoline prices seem tame by comparison.

NIPSCO residential natural gas prices have increased 105 percent since December and Nicor's have jumped 89 percent, according to prices published by the utilities.

Some local businesses already are feeling the heat, because they actually use more natural gas this time of year than they do in the winter.

"This is the season we get hit, because it's wedding season," said Edward Wontor, co-owner of Cakes by Karen, in Highland. "We definitely have seen it here. It's like overnight."

The big, rotating gas-fired oven at Cakes by Karen accounts for about 48 percent of its utility bill, Wontor said. It runs at 400 degrees at least five hours per day this time of year.

NIPSCO adjusted the bakery's monthly budget plan bill upward by $150 in May. Wontor said the bakery's natural gas usage has not changed appreciably.

NIPSCO and Nicor point out they make their profits on the delivery of natural gas and not on the price, which simply reflects what they pay on the open market.

"It is a direct pass-through," NIPSCO spokesman Nick Meyer said Tuesday. "Those are nationwide increases that all utilities throughout the country are experiencing."

Most of the natural gas used by residential customers goes to heat homes in the winter months, so that is when hikes in natural gas prices get the most notice.

NIPSCO told customers this week that a typical customer would pay $17.45 more for natural gas in June as compared to May, if their usage remained the same.

Typical homeowners could see natural gas bills $150 higher this winter compared to last, if the current price increases hold up.

The U.S. Energy Information Agency is forecasting prices will remain elevated through the winter months and could go even higher in the winter of 2009.

Nationwide, residential natural gas prices have jumped 89 percent since December, according to the most recent Energy Information Agency data.

Wontor said bakeries, like many other businesses, are fighting to keep prices down in the face of skyrocketing commodity prices. He predicts price hikes in flour and other basics, along with soaring gasoline prices, will drive many bakers out of business this year.

The American Gas Association is forecasting if natural gas prices hold up through the summer, consumers could face "substantial increases in bills for the 2008-09 winter heating season."

The association represents 202 utilities and companies that deliver natural gas. It points out that a large portion of gas supplied to consumers in the winter is actually priced at market levels in previous months, when utilities put natural gas into storage.

BBB warns consumers
The Better Business Bureau of Northern Indiana again is warning consumers to carefully check up on U.S. Energy Savings Corp. before signing contracts for fixed-rate natural gas.
The BBB on Tuesday said more than 200 complaints about U.S. Energy Savings have been received since it first warned consumers about the company in February. At that time, 237 complaints already had been received.
Among allegations against the company are that it misrepresents savings under its fixed-price programs and engages in misleading sales practices, the BBB said.
In an e-mailed response to The Times on Tuesday, U.S. Energy Savings said it offers customers long-term price stability, not savings. It said sales representatives are barred from guaranteeing savings.
"We take the integrity of the sales process very seriously and we do not tolerate violations of our business policies and code of conduct," the e-mail said.
In February, Illinois Attorney General Lisa Madigan filed a lawsuit against U.S. Energy Savings containing the same allegations.
U.S. Energy Savings is an approved supplier under NIPSCO's Choice program and Nicor's Customer Select program.

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Elderly Should Get Help From Family First wrote on Jul 11, 2008 4:17 PM:

" If there are a few elderly people who can't pay their bills, why don't the children or other relatives help out? Eveyone expects big daddy gubmint to bail everyone out. Take care of your own elderly parents! They wiped your butt and fed you until you were an adult, start returning the favor! "

Ity makes me sad wrote on Jun 14, 2008 9:25 PM:

" I cannot believe how high our gas bills will be this winter. I can deal with the summer heat most of the time, but we have a 3 year old and I'm sorry but I cannot keep my house at 55 degrees, I keep it at 68 and have him bundled up. We barley maintained afloat last winter, since then I was laid off....I have been actively looking for a job with no luck as if yet. I am so scared. "

We... wrote on Jun 6, 2008 3:34 PM:

" Live in Wheatfield, have a 5 year old home 1800 sq feet. But we have REMC electric, we don't run our lights 24/7, keep the house at 68 in the winter and 77 AC in the summer. The highest elec bill I've ever paid was $117/mo in the summer, July-Aug '07 (with the AC and the pool filter running). Our recent REMC bill was $90. We have an LP tank as well, which runs us a average of about $75/mo which we are allowed to pay down to $0 before refilling. I couldn't even begin to imagine $350 - $450 a month NIPSCo bills or how to pay them. "

Be Proactive wrote on Jun 5, 2008 4:27 PM:

" Does anyone realize that Gas and Natural Gas are consumable resources that once used are for the most part gone. The more we use the less there is and the less there is the more expensive it will become. Supply and Demand. That will always lead to higher prices. That's just the way it is and the way it always will be. So the question is what do you do about it.

Look at poster - Terrible: There is no possible way you should have even had the $264/Month bill even after an increase. I would absolutely say get rid of the hot tub (how necessary is that anyway...talk about wasting energy for your own personal enjoyment), get the insulation checked (I have nu-wool in my house and apparently compared to a lot of others here it works - we keep the house at 70 during the winter and my bill is $114 dollars and right now after the winter they owe me money), Check our Tankless Water Heaters (as the price of energy goes up and up they make sense). "

hmm wrote on Jun 4, 2008 11:35 PM:

" OH, and NO- the poor do not get their full bill paid either...it is a ONE TIME help....the one good thing--they are protected temporarily from shutoff.

That's how it should be...unless you want to see 70-100 year olds out working to pay their enormous NIPSCO bill! Or how about people who are disabled-unable to walk??

sickens me that people automatically ASSUME that poor means capable of working!

SS doesn't come close to covering a winter NIPSCO bill....let's not forget they aren't the only one standing there wanting payment either.

Don't blame it on the poor, elderly, disabled--Have a little respect-- "

HMM wrote on Jun 4, 2008 11:25 PM:

" keep my heat set to 58. I don't use the air, hang dry as much as possible, turned my water heater down a couple of notches. I still paid an average of 500 dollars this winter. I realize the gas charges are even across the board--BUT delivery/pipeline fees aren't! My delivery fees have been equal to the gas fees and YES this can be reduced.

The article says it is one part that can. Why on earth do these gas/oil companies have such large profits right now when average people are having to choose between eating and paying bills!?! You can forget about health.

I will go apply for the winter warmth program immediately 10/1...and a little hint, working people qualify at a MUCH higher amount for the program than those who aren't working at all! I think it is awful that heating costs more than a mortgage payment! Weatherization programs are going to be the next thing I need to sign up for as well--Pretty bad to think that heating costs will disrupt the mortgage industry as well when it comes down to it!
frustrating to learn next winter is going to much worse! "

CJ Dunnaway wrote on Jun 4, 2008 7:43 PM:

" Wealth: You are wrong. Nobody can work hard enough to *earn* a BILLION DOLLARS. They take it from other people who do the work. Some of them don't actually do anything but manipulate financial markets with no regard for the consequences of their greed. Reagan began the policies that allowed the already rich to become uber-rich, and their numbers have been growing ever since. So, when does it stop? When the wealthiest own 80%? 90%? Perhaps Warren Buffet should just rule the world. You, sir, are greedy, hateful, and evil. "

Wealth wrote on Jun 4, 2008 7:24 PM:

" To CJ Dunnaway:

Wealth is earned by those who work for it. It rightfully belongs to them. YOU are not entitled to what they worked hard to have nor is the government.
What right do you or anyone else have to say what I can earn? If you choose to stay uneducated and work for a pittance, don't save any money, don't invest any money but consume all that you earn and don't have anything saved for retirement so that you can live a good lifestyle, that's your problem. Don't come with your greedy paws looking for a handout from the wealthy. Do what they did and earn it! "

CJ Dunnaway wrote on Jun 4, 2008 6:59 PM:

" richmiddle classpoor: According to Wikipaedia, in The United States at the end of 2001, 10% of the population owned 71% of the wealth and the top 1% controlled 38%. On the other hand, the bottom 40% owned less than 1% of the nation's wealth. Perhaps we should stop blaming poor people for our plight and lay the blame where it truly belongs – rich, greedy Republicans. "

also to terrible. wrote on Jun 4, 2008 5:43 PM:

" unless you have someone in the house with a medical condition, 68 is pretty high, esp. at night. Bought those 3 season down comforters at IKEA for @ $100 each and some flannel sheets($40 each on sale). Turned the thermostat down to 50-55 at night- still very toasty. Put on a sweater and 62 during the day.

We don't do the budget, but if we did, NIPSCO says our gas bill would be @ $130/month for an 1800 sq ft house.

Hope this helps. "

Nipsco Whiners wrote on Jun 4, 2008 3:58 PM:

" Nipsco cannot charge more for the gas and electric than they pay on the open market by law. What you pay for gas, they pay. This is a fact and if you knew anything about this regulated industry, you wouldn't be whining. "

richmiddle classpoor wrote on Jun 4, 2008 3:39 PM:

" maybe if a good percentage of the "poor" stopped bleeding this country dry by refusing to work and collecting more in government checks than a good amount of people that work 50 plus hours a week just to EARN that same amount then we wouldnt have any of these problems because the people that deserve to be heard would have the channels needed to MAKE the government intervene in all monopoly issues. "

Getta Clue wrote on Jun 4, 2008 3:29 PM:

" Psst. Remember the articles about US Energy Savings Corp and high gas prices? This is one of NINE companies a Nipsco customer can choose to buy gas from if you think Nipsco charges too much.

Start making those calls if you think you can do better. "

lori in valparaiso wrote on Jun 4, 2008 2:33 PM:

" THANK GOD I LOCKED IN MY GAS RATES LAST FALL. Go on the budget plan and lock in your gas rates. I am paying the same thing as I did last year at this time. "

Terrible wrote on Jun 4, 2008 2:22 PM:

" No, we don't keep the lights on all the time, but we have a hot tub in our backyard. I'm wondering if that has anything to do with it? Our home is about 50 years old - it could have somthing to do with insulation, I'm sure. "

suzy wrote on Jun 4, 2008 2:01 PM:

" thanks Nipsco you've stuck it to us again !! "

Oil Companies wrote on Jun 4, 2008 1:49 PM:

" Gee, I guess Oil Companies dont look so bad now, do they??? "

To terrible wrote on Jun 4, 2008 1:26 PM:

" Do you leave the lights on 24/7? My house is about same in size and last bill was $147. "

Terrible wrote on Jun 4, 2008 1:09 PM:

" I just received my bill yesterday with my new budget amount. It went from $264 a month to $495 a month. A $231 increase? And I have a 1500 SQ FT home AND I keep my thermostat set at 68 degrees in the winter. I wonder how NIPSCO can explain that?!?! "

Why wrote on Jun 4, 2008 12:36 PM:

" Where in this article does it say WHY natural gas prices are going up?? Is demand up, is supply low?? Just dont tell me its going up, give me a so called reason or reasons (excuses). "

Merrillville Citizen wrote on Jun 4, 2008 12:26 PM:

" I was just informed by NIPSCO that my monthly budget payment plan will go from $239 month to $288 a month thats an extra !%!^^%!!!! $600 a year. Who are they kidding with only an extra $150 a year. Its all a scam to get rid of the middle class family, they only want the super rich and the poor "

Blame Media wrote on Jun 4, 2008 10:59 AM:

" lets see, the media talked how gas prices were going to be $4.00 by June,this repeated since about January 08. Now they will keep repeating how Natural prices will go up for this 08-09 winter?? Talk about beating a horse to death!! "

Poor dont worry wrote on Jun 4, 2008 10:28 AM:

" The poor or super low income will not have to worry, because the government will help pay their bill. They will not have to worry about keeping the heat at a minimum, like working people will. "

Electricity is going up too... wrote on Jun 4, 2008 9:05 AM:

" Don't forget that in July, NIPSCO is also increasing electricity prices.

WooHoo.

Thanks NIPSCO. "

JJ wrote on Jun 4, 2008 9:03 AM:

" But if the competitor is buying on the open market like Nipsco, then their price would be just as high as Nipsco's. "

jenny wrote on Jun 4, 2008 8:14 AM:

" I think thats why they do it, is because they don't have a competitor. I can't see my bill being another $150 dollars on top of $380 already. Oh wait sure I can. Everyone is out to get you these days. People are gonna have to get 3 jobs each if this continues! "

Government Regulates Nipsco wrote on Jun 4, 2008 8:12 AM:

" Nipsco is a monopoly only because the government makes them one. The government will not allow another utility to compete in Nipco's designated area. And they tell Nipsco how much they can and cannot make in profits. Nipsco didn't become a monopoly because they forced all other competitors out of the business they do. They would prefer to compete in the free market with other utility companies but is not allowed to do so by regulatory bodies. "

Facts wrote on Jun 4, 2008 8:05 AM:

" Actually, if NIPSCO had a competitor, they too would be seeing these price increases. As indicated above, this is a national issue. "

what a farce wrote on Jun 4, 2008 7:56 AM:

" driving the little guys out of biz, just like everything else, banks, mom and pop stores, airlines phone cos., etc. - seems like in the future (because we're being set up and sold out now) we will have ONE BANK, ONE PHONE CO., WALMART, ONE AIRLINE, ONE GAS STATION, ETC. - the monopolies have moved in under this ruse.

this is happening right before our VERY OPEN EYES! "

hate nipsco wrote on Jun 4, 2008 2:01 AM:

" man, this stinks.. if nipsco had a competitor , they would be running to put the prices lower. "

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