Wednesday, September 28, 2005

Warning! Winter Gas Bill Alert

It's time for all of us to be forewarned about this coming winter's heating bills. This is not to blame anyone, especially ONG or your local gas utility. It's just to let you know about what is now happening and how it will affect your utility bills.

We are nearing the end (end of October) of the current year injection cycle for natural gas. As a nation, during the low natural gas demand months of May through October all the excess production from producing gas wells is injected into underground storage. It is assumed that 3 to 3.2 trillion cubic feet is the needed amount in storage at the end of the cycle to get us through a typical winter. You can monitor the storage numbers here. Even with the disruptions caused by Hurricanes Katrina and Rita, it looks like we will get to at least 3 trillion. That's good news.

The bad news is that it has been injected into storage all during the injection season at $10-$13 per MMbtu, more that double the price from last year, when it was injected at $5-$6 per MMBtu. Tack on the storage charges on top of this. The result is that your local gas utility will be withdrawing this gas during the winter and charging you the cost at that time. Your gas utility bills could be at least doubled from last year's.

What can we do? Lot's of things. But you better get on them now. You can go to an average payment plan if your utility company offers it. That will smooth out the bumps temporarily. You can caulk, weatherstrip, add storm doors, storm windows,and add insulation. Consider a heat pump or some other type of secondary electric heating. The electric prices are at their lowest during the peak winter months. Consider changing out old and inefficient central heaters that can only produce 50% efficiency for a new one with 80% efficiency. Turn down the thermostat on your gas heater and wear more clothing. Turn down the thermostat on your gas water heater. These things should keep you busy.

The point is that its coming and you can do things now to soften the blow.

1 comment:

Daniel said...

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