"Nobody knows what natural gas prices are going to do. This next winter, what we're telling customers is we think prices are going to be higher than they were last winter," said SourceGas spokesman Len Mize.
The company's most recent gas cost adjustment filed in June accounted for a significant increase in natural gas prices, said Mize. "It was to catch up because prices had gone up on a national level nearly 50 percent since last fall when we set those prices."
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For low-income households, out-of-pocket expenses after assistance may increase 20 to 30 percent, he added. "Again, our most vulnerable neighbors will be disproportionally affected and will be worse off than (other) residential customers."
Combined utility bills cost residential customers about $998 on average last winter (from November through April). Next winter, this average is projected to reach about $1,220, said Arnold. These figures are based on costs from about a week ago, he added.
Despite an extension in funding for energy assistance by the state through severance tax revenues, Arnold said resources to help individuals and families will likely be strained. Funding from the state and federal governments have gone relatively unchanged between this year and last.
"I think, at best, we're going to see the same funding for next winter that we had this winter, and that's even a little optimistic," said Arnold. Congress each year appropriates funding to the Low-income Energy Assistance Program (LEAP) but has not taken a vote on the amount as of press time, he said.
He noted that Rep. John Salazar (D-Colorado) has been a "strong and consistent supporter of energy assistance for vulnerable families."
LEAP director Scott Barnette said the program in 2008 served about 92,000 households with average assistance at $440 per household. That average benefit is expected to go down to $377 per household on average. "It's a huge concern of the department, this rise in heating bills," he said.
With recent fluctuations of oil prices in the past several months, Mize said projecting natural gas prices is more difficult. The other variables in predicting increases include weather and customer usage. Based on the New York Merchantile Exchange, a unit of natural gas went from $9 in February up to $14.50 in July, Mize said. Over the last 30 days, he said the price has dropped to $10 a unit.
SourceGas is encouraging its customers to upgrade their heating systems before winter hits. Mize said many people have inefficient equipment that is 20 to 30 years old. "Now's the time to do something about it. You can't control the price per unit but what you can do is control your usage," he said. The company is also suggesting consumers install insulation and seal their doors, cracks and windows before the first winter bill is due to arrive.
Barnette said he encourages families and individuals to take advantage of LEAP's other programs that assist with cost-effective upgrades and furnace repairs and replacements. Those who are struggling to pay their utility bills should contact their utility companies ahead of time to find out whether a payment plan is possible, he said.
This year elected officials passed legislation to extend state funding of energy assistance for two years. Gov. Bill Ritter signed the measure to provide $13 million per year in assistance from severance tax revenues through June 2012.
Of the authorized funding, $3.25 million will go to Energy Outreach Colorado, $3.25 million to the Colorado Low-income Energy Assistance Program (LEAP) and $6.5 million to the Governor’s Energy Office for low-income home energy efficiency.
LEAP is open November through April and the EOC is open year round. Low-income individuals and families in need of energy assistance can call 1(866) HEAT-HELP.
Contact Lisa Huynh via email at lisah@montrosepress.com
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