Heating costs on the way down again
The Derrick, 11/2/01 By BRIAN FERRY

A special thank you goes out to The Derrick for allowing this article to be posted


The cost of natural gas is going down again.

National Fuel filed a decrease of about 11 1/2 percent Thursday with the state Public Utilities Commission. That dip follows a larger decrease in August.

And, after two years of sharp increases, the recent downward trend is a welcome change for homeowners and businesses across the country.

"Last year was certainly the highest rates we had ever seen," Nancy Taylor, spokeswoman for National Fuel, said. The falling prices are "good news for all of us."

Families could save more than $100 a month during the depths of winter. That figure is based on estimates that a household uses 30 thousand cubic feet (Mcf) of gas during a cold winter month.

Taylor said the price is now $7.42 per Mcf - down more than a dollar from August's $8.56 per Mcf and more than four dollars less than the $11.51 per Mcf price in May.

The November price is almost down to 1998 and 1999 levels - $7.13 per Mcf and $7.01 per Mcf respectively - and well below the November 2000 price of $8.62 Mcf.

The changes are due to improved supplies.

"Supply and demand are what drives the price of natural gas in the marketplace," Taylor said.

Cold winter weather can drive up the price by increasing demand. Similarly, low supply levels can drive up prices regardless of the weather.

Schools, churches and businesses typically get their gas from a third party and have it transported by National Fuel, Taylor said. But that doesn't mean they're immune to price changes.

In order to be able to afford to keep buildings heated last year, organizations had to cut back in other areas - from personnel to inventory to services.

Oil City School District business manager Susan Fisher said the district recently signed a new gas agreement. The new price, $4.81 per Mcf, is 30 cents less than the one negotiated in July and more than a dollar less than the 2000 price.

Still, $4.81 is up almost 50 percent from the 1999 price of $3.23. The district's cost per thousand cubic feet almost doubled from 1999 to 2000.

Fisher said the district budgeted $261,000 for natural gas during the 2001-2002 school year, and she said that figure represents significant savings over this year.

At St. Joseph Church in Oil City, the price drop will allow church officials to schedule some events that they had been putting off due to financial constraints.

"Last year it shot our budget completely," Msgr. John Swoger said. "We had to make adjustments."

Some of those adjustments were setting thermostats at lower levels, canceling church functions and redirecting the funding to keep the buildings heated.

"It's very welcome that (prices) are coming down," Swoger said. The church has been paying about $1,400 per month for gas over the past year. He said the initial jump in 2000 came as a surprise and was a 30 to 35 percent increase.

The church won't see the savings from the most recent price drops until the next contract in December.

"We are certainly pleased to be able to pass along this decrease to our customers," Taylor said. "This should provide significant relief to National Fuel customers in the coming winter months."

The changes in prices don't directly hurt or help the company's profits.

"By law, utilities cannot make a profit on gas costs to customers," a release from National Fuel said. "Companies must pass their costs directly on to consumers on a dollar-for-dollar basis."

"It's certainly good news from where we were last year," Taylor said. "If we can stay this way it will certainly be a more comfortable winter."