As the price of crude oil hit a record high of $54 a barrel on Tuesday, utility representatives said the price to heat with either natural gas or electricity will go up this winter.
Mike Holman, assistant manager of the Missouri Valley Division of AmerenUE, said he expected an increase next month in the purchase price of natural gas, which is what most Columbians use to heat their homes. He blamed the rise on oil prices and forecasts of a colder-than-normal winter.
“The reasons are very similar to what’s happening in the gasoline market,” Holman said. “Typically, when oil prices go up, natural gas prices go up as well.”
Holman said many large industries can use either oil or natural gas, so an increase in oil prices usually forces natural gas prices up as well.
Mike Cleary, spokesman for AmerenUE, said that if the price of natural gas does go up, the utility will apply with the Public Service
Commission for an 11 percent to 14 percent increase in what it charges customers.
AmerenUE charges a combination of two prices for natural gas. Now, the utility pays 71.79 cents for each unit of gas, a price called the purchased gas adjustment. AmerenUE also charges 23.53 cents in delivery charges.
Columbia’s water and light department increased electric rates Oct. 1 by 9 percent, said Jim Windsor, the manager of rates at the department.
In response to the rate increase, on Monday the Columbia/Boone County Health Department increased the limit for the amount of money it distributes through its two energy assistance programs, said Steve Hollis, social services supervisor. The department can now provide 10 percent more money to households to pay heating bills . The Heat Energy and Light Program assists low-income families with children, and the Citizens Assisting Seniors and Handicapped program assists low-income senior citizens and persons with disabilities.
In Boone County last year, the Central Missouri Counties Human Development Corp., which helps people pay their heating bills, received 2,304 applications for its energy assistance program. Bill Justus, who is in charge of the program, said he is expecting more people this year.
“We’ve already had stacks of people coming in (for applications),” said Sue Buckley, a member of the interim management team at Human Development Corp.
Buckley said that Human Development Corp. has added staff and restructured the assistance program to cope with the growing number of people needing help.
Holman said he is also expecting more families to be in need of assistance this winter because of a change in the Cold Weather Rule that benefits those expecting bill-paying problems.
The new Cold Weather Rule, which applies to all publicly traded natural gas and electric utilities in Missouri, prohibits utility companies from disconnecting heat-related service to their customers if the temperature is predicted to fall below 32 degrees, up from 30 degrees last year. Customers who have been disconnected can also be reconnected by paying 80 percent of the balance owed. The rule applies from Nov. 1 to March 31, 2005.
Holman said the cost of natural gas has been rising steadily in the last few years. In November 2000the Purchased Gas Adjustment was 67 cents, 4 cents less than now, Holman said.
“(That) doesn’t seem like a lot, until you see the bill,” Holman said. “The price used to go up and down. Now it seems like it’s just going up.”