Prospects bleak for winter gas bills

There is a popular political slogan that says government can't cure all problems, and Dyersburg city board members learned that lesson this week when they received a report on home-heating bills for the winter months ahead.

Greg Williams, purchasing agent for the city, brought an industry specialist in natural gas to deliver the bad news that prices are at record-breaking levels and every plan the city devised to cushion the impact for citizens has unraveled.

"This winter could be awful," warned Tim Allen of Enercon in Owensboro, Ky., a consulting firm in the natural gas field. "There isn't a lot of good news in the industry. The markets are at historic highs and futures prices look bad as far out as you go."

The high cost of crude oil is impacting all other energy commodities. Allen said that while the amount of gas in storage nationally is high and there are twice as many drilling rigs dedicated to America's natural gas fields, the price still hit a record $9.38 per MMBTU last week.

Williams said that since deregulation pushed cities onto the energy commodities trading floor in the late 1990s, costs have steadily risen. He tracked average gas prices between 1990 and 1999 and found that ratepayers in Dyersburg were charged an average of $2.03 for gas. Between 2000 and 2004 that figure rose to $4.44. Last year the city was paying over $7.25 and Williams speculated that the price could average between $9 and $10 this winter.

"There is no precedent for anything happening now," Williams explained to members of the gas and water committee.

Last winter the Tennergy group that advises Dyersburg and other cities in the region on gas purchases developed a plan for its members to buy winter gas by booking 5 percent each month at current market prices. By the end of October the cities would have 50 percent of their gas purchased. Williams reported that prices fluctuated so wildly that only three monthly purchases were made.

"The price moved above $8 and we stopped buying," Williams said. He explained that the city had only 15 percent of its winter gas purchased at present at an average cost of $7.29.

Williams explained, "From the customer's standpoint, deregulation is not working. From the producer's standpoint it is working and from a trader's point of view it is definitely working."

Allen was brought in to see if the city could reduce some of its transportation costs, the fee charged by companies to store and move gas through their pipeline systems. Those charges have increased to the city by 24 percent, Williams stated.

"There is nothing the city can do about the price of natural gas on the world market," Mayor Bill Revell said. "The only effective way to keep costs down is for people to reduce their consumption."

Last year the city distributed packets that contained energy-saving tips for consumers. Revell also encouraged low-income families or individuals on fixed incomes who might qualify for state or federal assistance to seek help early. The person to call at city hall with utility bill problems is Penny Rice at 286-7600.