A consistently cold winter is driving natural gas prices up, and suppliers are passing the costs right on to consumers.
It will add about $35 to the average consumer's April bill compared to last year. Ohio's major gas utilities, including Dominion East Ohio, are asking state regulators to allow an increase in gas cost recovery rates for the month of April.
Dominion East Ohio wants to increase April's rates from $6.01 per thousand cubic feet to $7.36 per thousand cubic feet. Natural gas is measured per thousand cubic foot and abbreviated "MCF" on a consumer's bill.
Dominion East Ohio's request would continue a recent surge in gas bills, totaling a 53 percent hike since April 2002, said Neil Durbin, a spokesman for the gas utility. He said the normal home gas bill of $64.37 in April 2002 would be $98.46 this April.
Dominion East Ohio supplies gas directly to 500,000 of its 1.2 million Ohio customers, and is one of the major gas suppliers in the Mid-Ohio Valley. The remaining 700,000 Dominion East Ohio customers, who purchase natural gas from participating suppliers under the Energy Choice program, are covered by their respective supplier contracts at various prices. Unless these customers are locked in at a price, it is likely they will see an increase as well.
Under Ohio law, gas utilities can increase their prices to reflect the market price every three months. However, because of the cold winter and high demand for natural gas nationally, the utilities are asking the Public Utilities Commission of Ohio to allow a special in-between three-month increase. By law, if the increase is approved, the companies must only pass on the direct market costs; they cannot profit from the higher rates.
"This is something that not only affects Dominion East Ohio customers, it will affect natural gas customers nationally," Durbin said.
From individual homes to businesses and schools, the rise in natural gas costs affect many budgets.
Marietta City Schools Business Manager Larry Bayless said the district's gas rates jumped from $7.41 per thousand cubic feet in February to $12.59 per thousand cubic feet in March through their supplier, Interstate Gas Supply.
Some of the nation's schools have reported turning down their thermostats to save money, but Bayless said Marietta's older manual control boiler system makes it difficult to continually change the settings.
He said the district does turn down the building thermostats at night. Many home gas consumers turn down the heat while they are at work or if they leave for an extended vacation.
"We look for these higher natural gas prices to be around for the next 12 to 15 months," Durbin said. He said even after the winter passes, gas companies will need to replenish their reserves used in the past high demand months.
Natural gas prices tend to be a volatile commodity. In the past decade, prices per thousand cubic feet have gone from a low of $2.65 in August 1992 to a high of $8.70 in February 2001.