Katrina may mean higher home heating prices in Wisconsin
 
Sep 8, 2005 - The Wisconsin State Journal
Author(s): Ben Fischer

Sep. 8--The precise effect of Hurricane Katrina on this winter's heating bills for Madison-area customers is still uncertain, but experts agree, it's bad news on top of an already ominous picture.

 

In a worst-case scenario, natural gas prices could soar 71 percent higher than last year, according to new estimates released by the federal government Wednesday.

 

Local customers have a few things going in their favor to stave off the worst of the crisis. But the doomsday projections have at least one consumer advocate comparing the coming winter to the 1970s energy shortage and its crippling economic effects.

 

"The whole country went to recession in the 1970s, partly because of higher energy costs," said Charlie Higley, president of the Citizens' Utility Board. "So it could be fairly dramatic. People just stop spending money."

 

The area's two primary utility companies, Madison Gas and Electric and Wisconsin Power & Light, both say they're insulated from the volatile prices for natural gas because they get their supplies primarily from Canada and the southern Plains states, not the Gulf region.

 

Also, their practice of buying up natural gas during low-price summer months to store it for the winter was on course before the storm. At least a third of the fuel for the winter is already bought and paid for, said Jeff Keebler, MGE's director of feuls procurement.

 

"We think, while we'll see a price increase, it won't be as high as 71 percent," said Keebler.

 

But neither MGE or WPL were prepared to offer a specific figure, with officials saying it's still too early to be precise.

 

Consumption could go down if early long-term weather predictions hold true -- Wisconsin is on track for another warmer-than-usual winter, according to the Wisconsin Climatology Office at UW- Madison.

 

Customers concerned about rising natural gas prices can take advantage of standard budget billing plans routinely offered by utilities. Both MGE and WPL promote limited plans allowing some customers to lock in gas rates now.

 

Also, low-income residents can apply with the state for government assistance with heating costs through the state's HomeEnergy+ program. But Higley worried that the neediest customers already are part of the plan, which uses federal tax dollars to pay utilities to make up for unpaid bills.

 

About 40 percent of eligible Wisconsin residents already use HomeEnergy+, said Jim Cain, the state's lead planner. And with flat federal funding, more participants likely means a lower average benefit.

 

The only solution is greater efficiency, experts said. MGE will begin a major advertising campaign this fall to educate customers on thermostat management and other strategies, said spokesman Steve Kraus.

 

"(Customers) are going to have a feeling of desperation," said Kraus. "They're thinking, What the hell can I do?' . . .We're going to push the efficient use of natural gas and conservation of natural gas . . . We're going to hit that really hard."

 

Customers can call 1-866-432-8947 or visit www.homeenergyplus.wi.gov/ to apply for the state's heating bills assistance program.

 

 


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