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Payment options can help customers deal with bills

August 17, 2008|By ARNOLD S. PLATOU

WASHINGTON COUNTY - Looking ahead to this winter's dreaded heating bills, what's a poor homeowner to do?

Options exist, but not all are clear.

In Washington County, fuel oil and electricity are the main sources of energy for home-heating purposes, according to the U.S. Census for 2000.

Back then, approximately 17,500 households in the county used fuel oil; about 17,500 others relied on electricity; about 2,000 used propane or bottled gas; nearly 2,000 used wood; and roughly 12,000 used natural gas.

Now, Columbia Gas of Maryland has about 13,500 customers in the county, spokeswoman Leslie Orbin said.

About a third of them use the utility's budget payment plan. The others, especially those with limited incomes, should consider it, too, Orbin said.

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"The budget payment plan remains the best way for customers to deal with bills," she said. "Budget payment allows them to spread out increases over several months."

Columbia Gas determines the budget payment for each customer "based on history of use at that house, the temperature history in the last 30 years, current rates for service and delivery, and the current and projected cost for natural gas," Orbin said.

"And periodically, we do review to make sure it is accurate," she said. The amount of payment is reviewed in November, January, April and July.

Another option for beleaguered homeowners is Maryland's CHOICE program through which families can choose to buy natural gas from a company other than Columbia Gas, which still will provide service, Orbin said.

Consumers can choose to lock in a rate from one of these other companies, but that can be "good or bad," she said.

"If they lock in when prices are high, and (market) prices go low, they're stuck," Orbin said. "But if they lock in when prices are low and market prices go high, then that's a good thing for them."

Orbin said there are two companies other than Columbia Gas that Marylanders can choose. She said they are MX Energy (1-800-785-4373) and MetroMedia Energy (1-800-828-9427).

For heating oil customers, an option might be to sign up with his or her dealer for a price cap - if the dealer offers it.

Pete Horrigan, executive director of the Mid-Atlantic Petroleum Distributors Association whose members include most of the fuel oil dealers in Washington County, said he doesn't know whether any are offering a cap here right now.

The wild fluctuations in market prices make such options difficult now for dealers to offer, Horrigan said.

"A cap is the max (rate) you would pay for the whole season," he said. "You have to then commit to being a customer to that company for the season. If the prices they charge go down, your price would go down."

Also, Horrigan said, some companies allow customers to prepay their fuel bills to lock in the price. In the past, some dealers did that by buying large quantities of oil and storing it, or by buying oil futures on the market.

"I don't know if anybody in Washington County does that," Horrigan said. "I'm not sure, in the current market, how good that is. You don't want a customer to lock into some high price and a month later, the price goes way down and you're locked in."

Horrigan said customers should talk to their own dealer about such options.

In addition, he advised, customers should ask the dealer about doing an energy audit of their homes to look at the age of their furnace, for instance, and study the cost of replacing it versus the price of oil.

"It doesn't take long to get an investment back," Horrigan said. "I would recommend every homeowner do that."

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