-

Leap likely in bills for natural gas Utilities seek state's OK for Jan. 1 increases

By Bruce Mohl, Globe Staff, 12/22/2000

Massachusetts natural gas utilities inundated state regulators yesterday with requests for Jan. 1 rate hikes that would boost customer bills anywhere from 11 percent to 27 percent, or as much as $61 a month more.

The 540,000 customers in the former Boston Gas territory would be among the hardest hit. Keyspan Energy Delivery is seeking to boost the gas portion of the bills from 68.5 cents a therm, a price that kicked in Nov. 1, to 96.4 cents. The typical bill for customers who use natural gas to heat their homes would rise 27.2 percent, or $61.

Put another way, customers using 220 therms - typical usage for January - would pay $287 to heat their home, a 60 percent increase over the $179 they spent last January.

The proposed prices are much higher than what heating oil customers are paying. The heating-oil-equivalent price for Keyspan customers would be in the $1.81 to $1.88 a gallon range. Heating oil is currently selling for $1.53 a gallon.

Commonwealth Gas, Berkshire Gas, Essex Gas, and Colonial Gas all submitted similar filings yesterday. Bay State Gas filed earlier and the remaining utilities in the state were expected to file shortly.

All of the companies are seeking to pass through to their customers the higher prices they are paying for gas, starting Jan. 1. State approval is likely, as long as the companies can demonstrate that their costs have risen by a corresponding amount.

A spokesman for the Department of Telecommunications and Energy said the agency will review the filings and act on them promptly. He said there are no plans for public hearings.

Mary Rosenfeld of Arlington said she thinks hearings would be a good idea. She saw her November bill jump 29 percent and now expects a similar-size increase to come in January. She wants to know why the price of natural gas is increasing so dramatically, and suspects gas producers and pipeline owners are taking advantage of consumers.

She also criticized gas utilities for converting so many customers from heating oil to gas and then jacking up the price. She noted Keyspan is offering free furnaces or boilers to consumers who make the jump from heating oil to gas.

''They've created all this demand and now there isn't enough gas to supply all these people,'' she said.

Local utility officials say they have enough gas on hand to meet demand, but natural gas supplies are at a record low nationwide. Some officials fear supply interruptions if demand does not abate.

The rapid runup in wholesale gas prices is being blamed on low gas stocks at the beginning of the winter, limited exploration activity in previous years, and higher-than-expected demand. Demand has been stoked by colder-than-normal weather throughout the United States and increased usage by electric utilities.

The price of natural gas for January delivery rose 5 percent yesterday on the New York Mercantile Exchange to $9.83 per million British thermal units. At one point during trading, the price hit $9.90, the highest level since futures trading began in April 1990.

Gas supplies, meanwhile, were down 23 percent compared to a year ago and hit the lowest level since the American Gas Association began tracking them seven years ago.

Consumers are being caught off guard by the skyrocketing prices, in part because gas prices have remained relatively steady in recent years.

Commonwealth Gas, now owned by NStar Cos., which serves Cambridge, the Worcester area, parts of the South Shore, and New Bedford, charged its 250,000 customers just over 45 cents per therm the last two winters, but in November that charge jumped to 76 cents. It is now seeking to raise it again to 87.5 cents.

The November increase would have boosted an average customer's overall bill by more than 36 percent. The requested January increase will boost it another 10 percent, or another $22.

Colonial Gas, a division of Keyspan, is seeking a nearly 16 percent increase on Cape Cod and in the Lowell area. Essex Gas, also owned by Keyspan, is seeking a 22.3 percent increase. Berkshire Gas is looking for a 14.6 percent rate hike and Bay State Gas an 11 percent increase.

Material from Bloomberg News was used in preparing this report.

http://www.boston.com/dailyglobe2/357/nation/Leap_likely_in_bills_for_natural_gasP.shtml

-- Martin Thompson (mthom1927@aol.com), December 22, 2000