Archive for Wednesday, March 3, 2004

Fighting off winter’s chill more expensive than usual

Price of natural gas jumps far above last year’s rate

March 3, 2004

Spring has shown signs of peeking through in recent weeks, but winter has left a cold chill -- in the pocket books.

With rising energy costs this year and a more harsh winter, consumers found using appliances and staying warm to be more expensive.

Kansas Gas Service, which supplies Tonganoxie with natural gas, billed customers at a rate of $7.34 per cubic foot of gas this February. That's a drastic change from last year's February rate of $4.80. In January, the rate was $6.52, while the previous January's rate was $4.12, according to Lori Webster, KGS communications manager.

The higher cost, Webster said, has been the case across the country. Various factors dictate what rate the company uses. Storage supply, weather production capability, industrial demand, crude oil prices and demand from power generation all affect the price of natural gas.

Last summer, Webster said rates were expected to be between $8 and $10, but costs never reached those numbers.

The company serves 341 communities, totaling two-thirds of the state's population. The service only buys 20 percent of its supply at the current market price. The rest is purchased ahead of time.

"The hedge helps to prevent price spikes," Webster said, referring to the winter months.

Webster said actual usage in dollars was difficult to track because households vary in how they use their natural gas.

But in reference to winter months, it's obvious that usage usually is the highest. On the average each year, one household uses 84 net cubic feet of gas. From November through March, 65 of those units are used.

"Whenever temperatures are colder people are going to use more gas," Webster.

Taking its toll

The Tonganoxie school district appears to have been hit by the colder winter. From July 1 to March 1 of this school year, heating costs were at $24,151. That's an increase of nearly 23 percent from the previous school year when costs were tabbed at $19,674.

"Some of that may be attributed to the harsh winter, but some of that is attributed to higher oil prices, too," superintendent Richard Erickson said.

During January and February, Good Shepherd Thrift Shop and Food Pantry has dug even deeper to help area families in need.

Board member Dorothy Korb said Good Shepherd has experienced a sharp increase in assistance from last year at this time.

"Last month was especially bad," Korb said.

During January and February this year, the organization helped 133 people overall and put $10,649 toward utilities.

Last year during those two months, Good Shepherd assisted 112 people and provided $9,445 in aid, an increase of more than $1,200.

The organization's money comes from sales at the thrift shop and monetary donations.

Higher prices also have hit a local restaurant, but the owner said improved business has countered the expenses.

Matt Bichelmeyer of Bichelmeyer's Steakhouse said last month's heating bill was $3,000. That's an increase of about $500 from January. The gas bill goes toward heating the large building and cooking, but when spring approaches, Bichelmeyer said gas bills usually taper off by $700 to $800.

The owner is more concerned with higher gasoline prices that some have predicted will increase dramatically.

"That's when people don't come from out of town," Bichelmeyer said.

Another large Tonganoxie business, B&J Country Mart, hasn't noticed much change from last year. Eric Gambrill said expenses hadn't changed much.

"No, not really," Gambrill said. "We reclaim a lot of our own heat off the refrigeration."

What about propane?

Some consumers rely on propane rather than natural gas.

Matt Yunghans of the Leavenworth County Co-op said prices weren't quite as bad as last year.

"I think we've pretty well hit our peak price already," Yunghans said.

That's a slight help for consumers, considering usage was up roughly 10 to 20 percent at the local Co-op.

The majority of consumers are rural residents, but the company has some commercial accounts as well.

Although prices were a tad lower, costs still are steep enough that a cold winter can put a kink in the budget.

"I think people probably have had to give up a little of the extra things to afford the higher cost of propane and the higher usage," Yunghans said.

At least the price likely has hit its plateau. But it all depends on energy prices on the national scale.

"Petroleum prices still are up quite a bit," Yunghans said. "I'm sure it will carry on through next year.

"At this point it doesn't look as though it's going to be a lot worse but I'm sure it's going to affect things."

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