Natural gas customers could face sticker shock

From an article by Richard Ryman in the Green Bay Press-Gazette:

Consumers could be in for a shock this winter if natural gas prices remain high through the summer.

"If it stays the way it is, people are going to be a little bit shocked by their heating bills," said Kerry Spees, spokesman for Wisconsin Public Service Corp. in Green Bay.

Natural gas prices traditionally are lower in the summer, and utilities take the opportunity to store it at those lower rates for winter use. This summer, rates have not fallen.

According to the U.S. Department of Energy, wellhead prices for natural gas climbed from $6.37 per thousand in November 2007 to $8.94 in April, the latest month for which figures are available. Natural gas was trading at around $13 on the Nymex futures market Monday.

Spees said utilities have been waiting for prices to fall to begin summer storage. If they all begin buying at the same time, it will keep demand, and prices, higher.

He said a series of fortuitous events this summer could mitigate higher prices later, including mild temperatures nationwide and no hurricanes that affect offshore production.

"That's a lot of ifs," he said.

Spees said this would be a good time for consumers to make home improvements to reduce winter costs, such as adding insulation and improving caulking and weather stripping.

Also, he said, conserving energy in the summer will help because it will reduce the need to use natural gas-fired peaking plants to generate electricity. Peaking plants often are required when air-conditioning use is high.