Feds: Natural gas to get costlier

Agency says home-heating costs to rise 18.8 percent, but local utility not predicting.

A steady decline in the price of natural gas since June is no guarantee consumers will pay less to heat their homes this winter, warned energy officials.

Instead, the federal Energy Information Administration predicted higher home heating costs nationwide and the Northeast leading other regions with an 18.8 percent increase over last season.

The EIA, which provides statistical data for the U.S. Department of Energy, estimated average seasonal expenditures for natural gas of $1,345 in the Northeast, up from $1,132 from last winter. The reasons for the increase are higher prices, more consumption and colder weather, according to a weekly report the administration released Thursday.

Local natural gas utility, UGI PNG Inc. is not ready to make a similar prediction.

The next indication of what direction prices will go will come on Dec. 1 when the utility files its purchased gas cost rate with the Pennsylvania Public Utility Commission, said Joe Swope, a spokesman for UGI Utilities Inc., which owns UGI PNG.

“It too soon to tell,” Swope said Friday.

Between now and the December filing things can change, he said, referring to the possibility of hurricane damage to production facilities in the Gulf of Mexico, the potential earlier than expected arrival of cold weather and a turnaround in the price.

So far the price has been trending down. Natural gas futures have dropped by nearly 50 percent in value from above $12 per thousand cubic feet in the summer to below the $7 mark on Friday.

The utility, which has approximately 158,000 customers in a 13-county market, is buying natural gas at the low prices, but it also bought the commodity when the prices were higher, Swope said. The purchased gas cost is passed on directly to customers without a markup by the company and makes up a large part of a customer’s monthly bill. The rate on file with the PUC is $11.68 per thousand cubic feet

“We try to buy gas every month,” Swope explained. “The idea behind that is you don’t try and outfox the market.”

Under a purchase plan approved by the PUC, the utility buys “a reasonable percentage of our portfolio on an ongoing basis,” he said. The utility can file an interim cost adjustment with the PUC to reflect what’s happening in the market.

But Swope said UGI PNG will wait until the next required quarterly filing date.