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With colder temperatures, heating bills likely to rise

December 16, 2002|by ANDREA ROWLAND

andrear@herald-mail.com

TRI-STATE - Colder temperatures this winter will mean higher heating bills for residents in the Tri-State area, industry experts say.

Winter heating bills for residential customers could average $100 to $300 higher than last year. The increase is primarily because of the higher fuel usage anticipated during the area's coldest winter in several years, according to the federal Energy Information Administration's "Short-Term Energy Outlook."

The weather in November and the first part of December was colder than normal, boosting heating demand.

The average temperature for the Hagerstown area in November was about 43 degrees, down nearly two degrees from the year before, according to Hagerstown Weather Observer Greg Keefer's Web site. The average temperature for the first 11 days in December was about 25 degrees - nearly nine degrees colder than the monthly average for December 2001, the Web site states.

Temperatures are expected to warm a bit over the next two weeks - with expected highs in the 40s and lows in the 20s - but the remainder of this winter is likely to be colder than the past two heating seasons, said meteorologist Jim Travers of the National Weather Service.

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The National Weather Service Climate Prediction Center indicates that El Nino effects might yield above-average temperatures in some parts of the nation this season, but residents of the Tri-State area will likely experience a more traditional winter, Travers said.

And colder temperatures will spur heating energy usage - driving up costs as heating demands increase strains on fuel supplies and delivery services, Maryland Energy Administration Director Fred Hoover said.

"People are going to pay a lot more for home heating this year," he said.

The Energy Information Administration forecasts increased household heating costs across the board. It will likely cost about 41 percent more to heat with oil, 31 percent more for natural gas, 17 percent more for propane and 13 percent more for electricity, according to the EIA Web site.

Despite continued high oil production levels, the retail price for heating oil is expected to rise by 9 to 10 cents per gallon, in part because colder temperatures have thinned U.S. fuel oil reserves, according to the EIA.

But fuel oil costs are especially unpredictable because of the tumultuous climates in the oil-producing Middle East - especially Iraq - and in Venezuela, where political unrest has nearly paralyzed the oil industry of one of the world's top crude exporters, MEA research manager Charles Miller said. Futures prices for crude, gasoline and heating oil rose Dec. 12 as the strike went into its 11th day and OPEC representatives agreed on a plan aimed at reducing production.

"Energy is a world market," Miller said. "What happens in these oil-producing countries will affect prices in the United States. And Iraq is a wild card."

Uncertainty about the situations in Iraq and Venezuela and increased fuel oil consumption due to colder temperatures will likely lead to an overall increase in heating oil costs, Miller said.

Prices generally peak in February, he said.

A recent survey of fuel oil vendors showed the average price for home heating oil at $1.38 per gallon in Maryland and $1.26 per gallon in Pennsylvania, according to statistics posted Dec. 9 on the EIA Web site.

The average price for propane gas was $1.46 per gallon in Maryland and $1.36 per gallon in Pennsylvania as of Dec. 9, according to the EIA.

Neither state nor federal statistics were available for West Virginia.

Natural gas costs have remained relatively high since supplies were drained two winters ago, and gas customers will pay more to heat their homes this winter due to increased heating demands, Hoover said.

Adequate gas supplies should prevent high gas bill increases such as customers felt in the winter of 2000-01, he said.

Sharp increases in heating-related demand for natural gas that winter drained supplies in storage for future use, nearly tripling raw natural gas prices in some areas and raising consumer heating expenses for natural gas an average of 70 percent nationwide, according to the EIA.

"Natural gas prices have stayed up since that time," Hoover said.

The wholesale price of natural gas spiked to a 19-month high on Dec. 12 after the government reported a sharper-than-expected decline in supplies. Analysts said the country still has access to enough natural gas and heating oil to avoid any kind of serious impact on consumers.

Gas costs vary


Columbia Gas customers in Maryland using 9,000 cubic feet of gas will pay an average of about $80 per month during this year's fourth quarter, down from about $88 per month this time last year, company spokesman Rob Boulware said.

Columbia Gas customers in Pennsylvania using 10,000 cubic feet of gas will pay an average of about $98 per month during the fourth quarter of this year, up from the $63-per-month average at this time last year, Boulware said.

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