Recordpub.com - Higher natural gas bills coming? Variable rate could have 6,000 Portage customers paying more

By Matt Fredmonsky
Record-Courier staff writer
About 6,000 natural gas customers in Portage County will likely pay at a variable rate for their natural gas " which could mean higher gas bills " throughout the summer months.
The rate at which those customers will pay this winter remains uncertain.
One hundred twenty-six communities, including all of Portage County's 18 townships, the city of Kent and the villages of Brady Lake, Hiram, Garrettsville and Sugar Bush Knolls, participate in the Northeast Ohio Public Energy Council. NOPEC's members band together to buy domestic electric and gas energy in bulk to try and provide lower rates to participating community residents.
NOPEC natural gas customers have been fortunate this year in that so far they have been paying at a fixed rate of $9.95 per thousand feet of natural gas since March " about $3 less than customers buying direct from Dominion East Ohio " and will continue to pay that rate until July. NOPEC customers pay considerably less than direct customers of Columbia Gas of Ohio, the region's other major natural gas provider, which currently charges for natural gas at a variable rate of $14.76.
But NOPEC Executive Director Leigh Herington is watching the daily rate of natural gas in anticipation of a price jump.
"I'm guessing that unless the bottom fell out of it tomorrow we'll be serving our NOPEC customers on a variable rate through the summer," Herington said. "I think most people are going to see $13 to $14 per (thousand cubic feet) ... throughout the summer."
Last summer, NOPEC customers paid $10.12 for their natural gas. The cost dipped to a fixed rate of $9.99 in November 2007 and continued throughout the winter months until March.
Herington said NOPEC has not yet committed to a fixed rate for this summer or winter because consultants to the non-profit entity believe lower rates are on the horizon.
Herington said NOPEC will attempt to lock in a fixed rate for the winter if prices drop below a rate of $11 per thousand cubic feet.
"We haven't locked in a fixed rate because if we locked in a fixed rate for several months it would cost us $14 per mcf," Herington said. "It would be irresponsible for NOPEC to lock into a $14 or $15 winter price and have the market go down to $11."
The U.S. Energy Information Administration reported natural gas prices for the month of May on the New York Mercantile Exchange Henry Hub pricing point, which directs prices for natural gas in much of the country and parts of the Midwest, averaged $11.65 per thousand cubic feet, up $1.16 from the April average. The EIA expects prices to average a little more than $11 for 2008-09.
As for recent increases in natural gas prices, Herington said the reason is unknown because typical causes " either a disruption in distribution methods from severe weather or supply shortages " are not a factor.
"There's really no reason for natural gas prices to skyrocket the way they have," he said. "I don't think anybody was prepared for this."

2.	Posted by Dowhatsright June 17, 2008
	I understand that the price of Natural gas is tied to the price of oil. I do not know how, but that was told to me some time ago. Any way, the price is too dam high. I wonder what it will be in November? It is apparent that our government is not going to do anything to stop this price gouging. I think it is time we took the matter in our own hands and take it to the streets. Let picket the company, and tell the government that we will be converting our furnaces back to coal and if they don't like it tough. We should petition the government to band any further new customers. If the product is scare and the high price is supply and demand, then no more new customers until the supply can meet the demand.