Price of Natural Gas to be ‘Signficantly Higher’ This Winter

By Beacon Staff

HELENA – The price for natural gas is hitting historic highs, and members of the Montana Public Service Commission worry it will continue to climb, translating into huge home-heating bills this winter.

“We think we’re approaching a crisis,” said Commissioner Bob Raney, D-Livingston. “We know that the cost of gas this coming winter is going to be significantly higher than it was last winter, all across the country. We have to pay for it, or figure out how to use less.”

Natural gas is used to heat more than 250,000 Montana homes. During the summer, demand for natural gas usually is low and prices are too.

However, residential customers of NorthWestern Energy, the state’s largest natural gas utility, are paying $14.91 per dekatherm for natural gas this month. That’s well above last summer’s price of $9 to $10, and about as high as prices have been in the past decade.

During winter months, a household with natural gas heat may use 15 to 20 dekatherms. At current prices, that means a $300 monthly bill.

Montana-Dakota Utilities, which serves customers in Billings and eastern Montana, is charging $11.75 per dekatherm this month but will adjust its rates upward by about $1.50 next month. NorthWestern’s rates, meanwhile, are scheduled to drop slightly in coming months, by about 80 cents a dekatherm.

The major natural-gas utilities in Montana adjust their prices monthly, based on the unregulated cost of natural gas they must buy on the market from producers. Only the company’s cost of transporting the gas to customers is fully regulated, and that portion is becoming a smaller and smaller part of the overall bill.

NorthWestern spokeswoman Claudia Rapkoch said natural gas prices are controlled by the international market, which has been pushing upward along with oil.

There is increased demand for natural gas to generate electricity, and natural gas can be liquefied and shipped overseas to international markets, she said. All utilities are paying the price while hoping the market breaks, she added.

PSC Chairman Greg Jergeson, D-Chinook, said he’s concerned that $15 per dekatherm may look low by winter, because natural gas prices often follow oil prices and the former hasn’t yet caught up with the run-up in oil prices.

To attempt to help consumers, the PSC is warning homeowners and businesses to do all they can now to insulate their homes and offices, or to take steps to conserve. The PSC also will try to become a clearinghouse for consumers, to inform them about opportunities to help invoke conservation measures and otherwise lower consumption, Jergeson said.

PSC members also say Congress must be prepared to increase home-heating assistance programs for the poor.

“If these energy prices sustain the way they say they’re going to, we have to figure out some way to take care of people who are on Social Security and fixed incomes,” said Commissioner Ken Toole, D-Helena.

Meanwhile, NorthWestern is encouraging people to go to “budget billing,” to avoid the shock of high prices in the winter, and will be pushing conservation measures as well, Rapkoch said.

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