Conservation Urged to Cut Energy Bills
September 19, 2008
Natural gas prices going up
(Knoxville News-Sentinel, The (TN) (KRT) Via Acquire Media NewsEdge) Sep. 19--A 20 percent increase in electric rates plus a double-digit increase in natural gas prices adds up to one big "ouch" when it comes to paying this winter's utility bills.
At KUB's monthly board meeting Thursday, utility officials said they expect an 11 percent increase in natural gas prices this winter compared to last, reflecting increases in wholesale prices that will be passed along to customers.
While this year's spiraling cost of natural gas has contracted in recent weeks, prices remain higher than last year, twisting the knife for customers already grappling with historically high electricity and gasoline prices.
TVA recently announced a 20 percent increase in wholesale electricity rates, effective Oct. 1, that reflects spikes in cost of coal and natural gas, which power electricity generation plants. Taking into account earlier rate increases, electricity will cost 26 percent more this fall and winter than one year ago, said Mike Bolin, KUB vice president for customer service, told commissioners.
"Really, TVA's had four rate increases over the past year," he said.
The increase in natural gas prices directly affects customers who depend on gas for home heating and water heaters, and they will feel it most keenly in the coming winter months.
Unlike electric rates, which are adjusted on a quarterly basis based on the cost of fuel or by board vote of local power supplier TVA, the price of natural gas fluctuates month to month. KUB purchases gas on a 12-month rolling basis, and the monthly price for customers is determined by what the utility paid for current supplies as well as projected future prices for the commodity, said KUB spokeswoman Pam Jordan. Nationwide, gas prices are expected to be 17 percent higher this winter versus last year, according to data from the Department of Energy, Bolin said. KUB's projected price is lower because of its buying practices, he said.
However, customer bills are most directly affected by one factor KUB is least able to control, he said: your bill is more driven by temperature than anything else," Bolin said.