MidAmerican Energy: Average residential customers will pay 0.4 percent less this heating season

Although Mother Nature really holds the cards on what will happen with your heating bill this winter, at least one Quad-City utility is predicting a very slight decrease.

MidAmerican Energy is projecting that the average residential customer will pay a total of $766.19 for the 2007-08 heating season, which runs from Oct. 1 to April 30. That is a decrease of $3.34 or 0.4 percent from last year when the average customer paid a total of $769.53 for the season.

“This is based on the (natural gas) prices we have right now and plugging in the same temperatures we had last year,” said Allan Urlis, MidAmerican spokesman, adding that “$3.34 spread out over seven months — it’s a small decrease, but at least it’s not an increase.”

Nationwide, according to an Energy Department report, most Americans should brace themselves for paying a lot more to heat their homes this winter. According to the report, released last week, heating oil costs are likely to jump 22 percent and natural gas bills, on average, will rise 10 percent between October and March.

While the National Oceanic and Atmospheric Administration forecasts a milder-than-average winter in most parts of the country, the agency also predicted last week that temperatures will be 1.3 percent colder than last year.

In its monthly Natural Gas Update, Alliant Energy, another Quad-City area utility, reported that experts predict Midwest natural gas customers will pay an average of $79 more this year to heat their home.

Alliant spokesman Steve Schultz said the company does not give specific cost estimates because “weather can change so fast.”

“We’d say right now it looks like it may be a little more this year, but that’s all dependent on the weather,” he said.

On the national front, surging crude oil prices are the primary culprit for the jump in fuel oil costs. This spring and summer, American refineries experienced an unusual number of unexpected maintenance outages. The net result was that fewer refineries were producing gasoline, heating oil and other petroleum products.

The outages sent gasoline prices to a record $3.227 a gallon in late May as refiners scrambled to produce enough gasoline to meet peak summer driving demand.

“Because they used every ounce of the refinery to produce gasoline, it came at the expense of distillate fuels,” like home heating oil, said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.

Despite the government forecast, natural gas futures prices actually have been mostly falling in recent weeks. Inventories remained high as new sources of natural gas were tapped this year and a cooler summer depressed demand.

“We could have all-time record storage by the beginning of February,” said Tim Evans, an analyst at Citigroup Inc. in New York.

But all of that could turn around if oil prices stay high and electricity plant operators switch to natural gas for units that can burn either fuel, said Ron Denhardt, CEO of Strategic Energy & Economic Research in Winchester, Mass.

On the other hand, supplies coming on line this year, including Anadarko Petroleum Corp.’s Independence Hub platform in the Gulf of Mexico and a portion of the huge Rockies Express natural gas pipeline project, are expected to boost natural gas supplies by 2 billion to 2.5 billion cubic feet.

“That’s a lot of supply coming on,” Denhardt said.

MidAmerican’s Urlis said utilities have benefited from the strong inventories as well as this year’s mild hurricane and tropical storm season — a different story than two years ago when Hurricane Katrina and other storms disrupted natural gas production in the Gulf. About 25 percent of the nation’s natural gas supply is produced there, he said.

“There’s still another month left in hurricane season ... but our buyers are telling us the price of natural gas could go down more,” he added.

The Energy Department estimated a gallon of heating oil will rise to $2.88 this winter as crude oil prices stay high. Heating oil is used by 7 percent of American households, mostly in the Northeast, while natural gas heat is used by 58 percent of households. Another 30 percent are heated by electricity, which the Energy Department estimated will rise 4 percent in cost this winter.

For the 5 percent of American homes that use propane, winter heating costs are expected to increase 16 percent.

The wild card in the heating cost estimates is the weather. If the U.S. experiences a warmer than expected winter, prices of some fuels could fall through the winter.

Urlis said lower or similar heating costs cause concern that customers will let down their guard on energy efficiency “and the importance of it may not receive the same awareness level as if we’re talking about higher prices.”

“Energy efficiency is going to help save you money on you home energy costs bottom line,” he said. “If you drive your car and it costs you $3 a gallon to fill up your car, you’re going to pay a little more attention to how many miles you’re driving and cutting out the unnecessary trips than when its $2 a gallon.”

Same is true with weather-stripping and taking other preventative steps to keep your costs down, he said. If costs are down or remain the same, “you don’t pay as much attention to keeping doors closed or not putting the bed or chair in front of a register.”

(The Associated Press contributed to this story.)

Jennifer DeWitt can be contacted at (563) 383-2318 or jdewitt@qctimes.com. Comment on this story at qctimes.com.

Winter checklist

-- Get a furnace check-up: Have a qualified heating/cooling contractor check your heating system once a year to ensure it is running safely and as efficiently as possible. Change your furnace filters regularly.

-- Call for a home energy audit: Have your utility company conduct a home energy audit. An energy efficiency expert will come to your home and help you improve its energy efficiency, including making small improvements and coaching you to do additional do-it-yourself projects.

-- Weatherize your home: Caulk, weather stripping, window plastic and other simple improvements are all low-cost projects that will bring you noticeable savings on your winter energy bills.

-- Insulate: Make sure your home has adequate insulation, including your attic, exterior walls, floors, basement and crawl spaces.

-- Use a programmable thermostat: Use a programmable thermostat to automatically adjust the temperature when you’re asleep or away. Keep your thermostat at 68 degrees or lower in the winter.

-- Clear your air registers: Make sure your air registers and radiators aren’t being blocked by furniture, rugs, drapes or other objects in your home. Be sure to dust or vacuum registers or radiators on a regular basis.

-- Let it shine: Keep draperies, shades and blinds open on sunny winter days, especially with windows on the south side of your home.

-- Buy energy-efficient equipment: If it is time to replace your furnace, be sure to ask about EnergyStar-rated high-efficiency furnaces and the rebates that are offered for purchasing a high-efficiency unit. Also use EnergyStar light bulbs and appliances.

Sources: Alliant Energy and MidAmerican Energy

 

Heating help available

Iowa

The Iowa Utilities Board has extended the deadline for community groups in Iowa to join the 2007 Weatherization Challenge and receive matching grants of up to $500 for home weatherization projects.

The grant application deadline now is Oct. 31. The grants are for projects to be completed in Iowa by Nov. 30.

The Iowa Weatherization Challenge helps groups and organizations weatherize homes for low-income families, elderly, disabled individuals and others needing assistance. In grant-eligible projects, volunteers donate time to undertake relatively simple tasks that achieve significant weatherization benefits.

To obtain an informational kit and a matching grant application form, along with requirements and instructions, go online at state.ia.us/iub. The grants must be used for related weatherization and educational materials.

For more information on the Iowa Weatherization Challenge, contact Brenda Biddle toll-free at 1-877-565-4451. The utilities board also can assist groups in securing training in weatherization methods for volunteers, receiving donated or discounted supplies, locating appropriate weatherization sites and communicating with the media.

Illinois

Illinois seniors and residents with disabilities may apply for heating grants through the Low Income Home Energy Assistance Program, or LIHEAP.

The assistance will be available to all income-eligible households as of Nov. 1.

The winter heating program is expected to serve 300,000 households this year with an estimated $150 million in state and federal funding.

Through LIHEAP, which is run by the Illinois Department of Healthcare and Family Services, heating bill payments are made on behalf of households with income of up to 150 perecnt of the federal poverty level. A single person who earns up to $1,276 monthly income can qualify. A two-person household that earns up to $1,711 can qualify, while a family of four can earn up to $2,581.

To apply, call 1-877-411-WARM.

For a complete listing of LIHEAP’s Community Action Agencies and additional information, visit lihealillinois.com or call the Keep Warm information line, 1-877-411-WARM.