Leader Blues

Tuesday, August 05, 2008

EDITORIAL >>Natural gas will cost more

If you have been distressed about $4-a-gallon gasoline in this torrid summer, the state Public Service Commission wants you to know that the other shoe will fall this winter: monthly heating bills in the stratosphere. And please do not blame the commission for letting them soar. It can do absolutely nothing about them.

Despite the self-serving, donít-blame-us nature of the commissionís unusual news release last week forecasting record natural gas bills, it ought to be appreciated. The agency recommended that people start now to prepare for the winter by finding ways to make their dwellings and businesses more efficient. Insulation, window caulking and heating tune-ups will shave a little from the monthly bills, and levelized billing will reduce the price shock from a frigid January.

Last winter was bad enough, and it was not a particularly chilly season. Natural gas soared from something over $5 a thousand cubic feet (mcf) to more than $7. Natural gas prices are impossible to predict with any accuracy, but the PSC projects prices to average nearly $12 per mcf this winter. That would mean that a homeowner in this area who burned 100 ccf (one hundred cubic feet) a month would see a monthly bill of more than $161, which would be about a 25 percent increase over last winter.

Gas approached $14 per mcf on the New York Mercantile Exchange not long ago. Gas prices roughly track crude oil prices and they are back down to high atmospheric levels at the moment, but they are expected to rise again with the demands of the heating season.

They could well exceed the PSCís sub-$12 forecast. When you get a humongous gas bill, it might pacify you to think about the good people in the gas-rich shale north of us and the exploration companies that thanks to a bull market for energy will be doing very well.

The gas company ó Center Point Energy, in our case ó passes the gas-purchase and transportation costs directly to customers, supposedly without a markup. Its profits come from the base monthly charges, which are about a fourth of your bill. The PSC regulates those charges but, as it took pains to point out, not the gas and pipeline costs. So, it implies, donít call the commission to complain about your abnormal gas bill unless you detect something fishy. They are separated on your bill.
But the government can do a few things to ease the emergencies from a drastic rise in energy costs. The PSC can see to it that the gas-distribution companies have a lenient and humane cut-off policy for delinquent homeowners and renters.

The federal government, which has been rescuing mammoth financial institutions, needs to be ready to rescue the very poor and the elderly from the hardships of a bad winter.

Democrats are pushing for a second stimulus package to reinvigorate the slumping economy, and it should include a sharp increase in the Low Income Home Energy Assistance Program (LIHEAP), which helps the poor and elderly pay their bills and avoid cutoffs. President Bush has never liked the program, but its strongest backers are Republicans from the frozen north, like Sen. Olympia Snowe of Maine.

The formula for distributing the money favors the northern climes, but we have many more who are needy and energy costs show no favorites.