Natural gas suppliers dialing down the cost

  • Article by: SUZANNE ZIEGLER , Star Tribune
  • Updated: September 9, 2009 - 9:22 PM

A seven-year low in price and a large supply could lower heating bills as much as 20 percent this winter.

The cost of at least one item is expected to go down for consumers this winter: natural gas.

Bills for average residential customers could be down as much as 20 percent from what they were a year ago, barring an unusually cold winter or an event that cuts gas supplies, according to natural gas providers CenterPoint Energy and Xcel Energy.

The bad economy is partly responsible. Natural gas prices have plunged to seven-year lows, and supplies are up because of a cooler summer and less demand from recession-pinched industries.

While it's a welcome break for beleaguered consumers, demand for energy assistance is expected to remain high this year.

"That's great news for everyone, but it does not lower the demand for assistance with these bills," said Catherine Fair, director of energy assistance programs for the Community Action Partnership of Ramsey and Washington Counties.

CenterPoint, which has about 790,000 residential customers mainly in Minneapolis and the western Twin Cities area, estimated that residential customers' average bills could be as little as $110 a month for the heating season of November through March. Last year's bill averaged about $137 a month, which was higher than normal because of an increase in natural gas prices and a colder-than-normal winter.

CenterPoint, based in Houston, advised customers to take advantage of the lower prices by catching up on past-due bills. Spokeswoman Becca Virden encouraged customers who need help to apply for financial assistance from Minnesota's Low Income Home Energy Assistance Program.

More people will be eligible this year, she said, because the income level to qualify was raised. "The funds can be applied to past due as well as current," she said. "It's going to make more of an impact this year."

Xcel Energy, which is based in Minneapolis and has about 400,000 residential natural gas customers, mostly in St. Paul and the east-metro suburbs, is predicting that natural gas bills for residential customers will be down 10 to 20 percent from last year.

"Anytime you can tell people their heating bill might be lower, that's good," Xcel spokesman Tom Hoen said. He cautioned, however, that a cold start to winter or storms in the Gulf of Mexico that cut production could affect how much people will pay.

"If the winter starts out with extremely cold weather, obviously people will be using more natural gas to heat their homes and the bills would rise," he said.

Last year, the average Xcel bill for a residential customer in Minnesota was $142 per month for the heating season. This year the average bill is expected to be between $114 and $128 per month.

Fair said that at the end of August, the state sent out applications for energy assistance to the 155,000 Minnesotans who took part previously, including 20,000 in Ramsey and Washington counties.

"We've already gotten 3,000 applications back in our office and we are getting requests from new people that had not applied before at the rate of about 200 to 300 per week," she said Wednesday.

Overall, the lower gas costs will help the energy assistance grants go a little further, she said, "but even a 20 percent decrease in the cost of natural gas doesn't necessarily keep their head above water as far as their bill is concerned," she said.

Suzanne Ziegler • 612-673-1707

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