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Columbians might pay lower winter heating costs

Tuesday, September 22, 2009 | 12:01 a.m. CDT

COLUMBIA — Columbia residents using  propane or natural gas to heat their homes may receive an early holiday present.

Since the peak of heating fuel in July 2008, prices have plummeted. This should give homeowners relief from last year's high heating costs, according to Kerry Cordray of the Missouri Department of Natural Resource’s Energy Center. Crude oil prices were $71.31 a barrel on Sept. 9, compared to July 2008’s record price of $147.27 per barrel.

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In the last month alone, crude oil prices decreased 1 percent. They are 35 percent less than this time last year, according to the Department of Natural Resources' Sept. 11 energy bulletin.

Home heating fuels are also becoming more affordable. Natural gas prices are down 61 percent from last year, and propane prices have decreased 36 percent from last year's state average retail price to $1.47 per gallon on Sept. 7, in contrast to last years average price of $2.30, according to the Sept. 11 energy bulletin.

The home heating fuel price decline is due to  reduced demand during the recession, AmerenUE spokesman Mike Cleary said in an e-mail. He attributes two-thirds of residents' natural gas bills to the wholesale cost of the fuel.

“Any change in cost can have a big impact on customers' bills,” Cleary said.

Ameren reflects wholesale cost in the "Purchased Gas Adjustment" section on utility bills. The company must file that number for the winter heating season in mid-October. The possible price change will go into effect Nov. 1.

Cleary said he doesn't know what that number will be this year because natural gas wholesale prices tend to be volatile.

“Prices all boil down to supply and demand,” Cordray said.

He said fuel prices can be affected by factors such as natural disasters, weather and even foreign policy and disturbances.

“Any interruption of supply or potential interruption in the supply will have an effect,” Cordray said.

But Columbia residents who heat their homes with electricity will not be feeling the relief from low gas prices.

Columbia Water and Light proposed a 5 percent increase in electricity rates. If the City Council approves the change, it would go into effect Oct. 1.

Most of that 5 percent is due to higher costs to produce electricity. Eighty percent to 90 percent of all the city’s electricity is coal-based, department spokeswoman Connie Kacprowicz said.

Although the Missouri Department of Natural Resources only offers data and does not predict future prices, Cordray said the significantly lower propane prices make it a good time to look into a potential propane contract or buying rather than renting a tank.

He also encourages homeowners to shop around for propane if they own a tank because prices can vary greatly throughout the same area. But he warns consumers that buying gas is like “betting on the stock market” because the price can change at any time.

The only sure way to ensure lower heating is to get your home ready for the winter. The department offers tips on the Be Energy Efficient Web site:

  • Set your thermostat at a lower temperature and wear warmer clothes.
  • Make sure that there is no furniture or drapes blocking the heater vents.
  • Close off any rooms not being used.

For more heating tips and energy market updates go to dnr.mo.gov/energy/.


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