Rise in gas price may affect more than cost of heating

A 10 percent spike could increase the cost of dining out and doing laundry in Columbia this winter.
Monday, September 8, 2003 | 12:00 a.m. CDT; updated 5:50 p.m. CDT, Thursday, July 10, 2008

Columbia residents might pay more to heat their homes, dine out and wash laundry this winter because of a surge in natural gas prices looming between November and March.

Industry analysts have forecast at least a

10 percent jump in mid-Missouri home heating costs this winter, though an abnormal cold snap could run prices even higher, said Warren Wood, energy department manager of the Missouri Public Service Commission.

Ten percent is relatively good news for Columbia, Wood said, especially compared to other regions of Missouri that, because of different market conditions, are bracing for 20 percent rate increases.

Still, that’s little comfort for local businesses that annually stave off rising utility bills with profit losses and price increases.

The erratic market has hit restaurants and coin-laundry businesses especially hard because both pay high prices each month for natural gas to power their equipment.

Splasher’s Laundry and Tanning, 1804 Paris Road, pays about $3,000 a month to natural gas utilities, up from around $2,000 three years ago, co-owner Chet King said. King’s other business, Snapper’s Bar, 12 S. Seventh St., pays $20 each month.

Because his unique laundry service also serves drinks and provides entertainment, King has not raised prices at Splasher’s. He said some standard laundries without extra amenities have nudged costs up slightly, and he doesn’t blame them.

“(Natural gas prices) are way too high now, I’ll tell you that much,” he said. “I don’t see how other Laundromats can get by without offering all the extra stuff.”

Adam Dushoff, co-owner of Addison’s — An American Grill and Sophia’s, both restaurants in Columbia, hasn’t worried much about natural gas prices. At most, Dushoff said, he’ll have to pay a few hundred dollars more per month.

“We’d rather worry about costs that we can control,” he said.

If gas prices rise too high or other restaurant costs skyrocket, Dushoff said he edges certain menu prices up by a nickel or a quarter to compensate, which he has only done twice since Addison’s opened in 1999.

Co-owner Brad Pippen said that if gas prices jump too high, menu prices might eventually rise another few cents.

“I don’t think people notice a quarter here and there,” Dushoff said. “They’re paying for quality.”

For businesses and homes, industry analysts said things could have been worse. Talk of unprecedented natural gas shortages this winter has toned down since companies began storing more natural gas during the summer, Wood said.

Liberal storage relieves some pressure from utilities and can prevent sudden price spikes if gas use unexpectedly rises. This spring, historic-low storage levels in U.S. wells plummeted 500 billion cubic feet below the seasonal average. Storage injections have since filled more than half that deficit and brought U.S. storage back up to more than 2.3 trillion cubic feet, according to the federal Energy Information Administration.

For the past few years, Wood said, the popularity of natural gas has combined with declining supply to cause shortages and price increases nationwide.

As if they were doing the splits, natural gas supply and demand have slid apart and strained since the late 1990s, when more electric power plants using natural gas popped up, helping cause supplies to wane, Wood said.

To ease the strain, the energy industry has lobbied for more well drilling and for importing more natural gas, along with other strategies designed to squeeze demand closer to supply.

These tactics might save homeowners and businesses some money soon, but not this year, Wood said.

“It’s like we’re trying to run faster on a treadmill,” he said, “and people keep turning up the speed.”

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