Thursday, September 7, 2000, 12:00 a.m. Pacific

Oil, gas, electricity bills begin sharp climb

Background, Related Info & Multimedia:

by Thomas Lee Seattle Times business reporter Fred Stark examined his gas bill yesterday morning and did some quick calculations. The results, he said, were painful.

With rate increases approved last month by the state utilities commission, Stark saw his August natural-gas rate jump 44.5 percent from the previous month. Combined with an increase last year, he said, rates have spiked almost 68 percent since last August.

"This is happening very quietly," said Stark, a Puget Sound Energy customer who lives in Issaquah. "I overlooked it in my bill . . . because my summer usage is so low. People are going to be screaming come winter."

Washington residents will face a triple threat of sorts this winter as prices for natural gas, heating oil and electricity begin to rise sharply over the next few months. The spikes, which come on top of high gasoline prices, will be all the more painful for consumers, experts said, given the region's reputation for low energy prices.

"It is fair to say there is a real shift in the (energy) industry," said Simon ffitch, head of the state attorney general's public-counsel section and consumer-affairs advocate. "It does seem we are moving out of that era of low stable prices that we are so familiar with. Consumers are going to have to pay a lot more attention."

For instance:

This week Puget Sound Energy's 602,000 natural-gas customers will start seeing their bills go up by an average of 27.5 percent, or $13.23 more a month, the largest rate increase in the Bellevue-based company's history. Cascade Natural Gas, which serves 145,000 customers in Seattle, will charge an extra 16 percent, or $6.90 a month. Customers of Portland-based Northwest Gas will pay an additional 22 percent, or $9.11 a month.

Seattle City Light this week will ask the City Council for an 8.9 percent rate increase effective in January, which translates into $3.07 a month more for electricity users.

With crude-oil prices at a 10-year high, heating-oil costs this winter will be at least 20 percent higher than last year, said one local supplier. There is no official gauge of retail heating-oil prices in Washington and suppliers are reluctant to discuss prices. An informal survey of heating-oil suppliers in Seattle shows an average price to be $1.70 a gallon, more than 50 cents higher than last year's fall average. Nationwide, the average price of heating oil last month was 52.5 percent more than in August 1999.

The across-the-board increases are related, experts say, and it boils down to this: Supply is not meeting demand.

"It's just not a heating-oil problem," said Calvin Caley, general manager for Seattle-based Pacific Heating Oil, "but an energy problem."

This summer's triple-digit temperatures in California and the Midwest brought unexpected consequences for Washington by driving up the price of natural gas and, for Seattle customers, electricity.

For years, Washington consumers enjoyed almost exclusive access to natural-gas reserves in Canada. But as more utilities turn to natural gas to produce electricity, the high demand for gas in places such as Chicago and San Francisco has driven the price up on the wholesale market and in turn depleted supplies reserved for the winter, experts said.

With utilities also able to buy and sell electricity across state lines, Seattle City Light officials told the City Council last month that high electricity demand in California drove up prices on the wholesale market, making it more expensive for the utility to puchase power.

Seattle City Light, which usually sells surplus energy for additional revenue, is running a $70 million deficit.

The lack of natural-gas supplies is also driving up heating-oil prices, said Warren Aakervik, owner of Ballard Oil. As natural gas becomes increasingly hard to find and expensive, consumers will turn to heating oil, he said, draining a supply already limited by a partial shutdown of Olympic Pipe Line routes.

Aakervik predicts heating-oil prices this winter will jump 20 percent to 30 percent. About 200,000 Washington residents use oil to heat their homes, according to the Oil Heat Institute of Washington, an industry trade group.

Caley of Pacific Heating Oil said he has to hire fewer workers to keep costs down so that he can keep his retail prices stable. Usually, he said, this is the time consumers begin ordering heating oil for the winter.

"I have done just about everything I can do except lay myself off," he said.

Mark Clyde, communications director for the Northwest Energy Coalition, an alliance of utilities, consumer and environmental groups, said this year should serve as a wake-up call to a state too comfortable with low energy prices.

"This is an opportunity for the Northwest to go do the type of energy conservation we did in the early '90s," he said.

But that's little comfort to Stark, who moved to Washington a few years ago.

"I got to find a way to pay for this I suppose," he said. "I got to stay warm."

http://seattletimes.nwsource.com/news/business/html98/ener07_20000907.html

-- Martin Thompson (mthom1927@aol.com), September 07, 2000

Answers

I like stories like this that spell out consequences at the local level. It is a snapshot of history in the making.

-- Wellesley (wellesley@freeport.net), September 07, 2000.

SUV's might make pretty fair wood haulers if ya take a torch and cut the roof off right behind the front seat.Make 'em easier to load and unload.

-- Sam (wtrmkr52@aol.com), September 07, 2000.