Motorists are reminded of the ebb and flow of gasoline prices every time they drive past a service station.
Price movements for another fuel — the natural gas used in home heating — aren’t displayed for all to see from the side of a highway. But consumers won’t have to look far to notice that natural gas prices are plunging just as Midwestern states head into the teeth of winter. That comes as good news for Spire’s 500,000 natural gas customers in western Missouri, including those in St. Joseph, because the wholesale price of natural gas makes up about half of a monthly heating bill.
“What we do know is that gas charges will be lower this winter for customers in the western region of Missouri,” said Reagan Johnson, Spire’s public communications manager.
The U.S. Energy Information Administration expects the average household to spend $580 this winter on natural gas for heating, a 1 percent decrease from last year. Closer to home, the average residential customer in Spire’s western district could see a $5 decrease in monthly bills under a cost adjustment that the Missouri Public Service Commission approved last month. The change was due to lower wholesale gas prices.
Whether customers notice this change will depend on weather. Unlike gasoline usage, which remains constant for many drivers, natural gas demand varies depending on the severity of the winter. A cold spell means more gas usage and higher bills, which is one reason why the Energy Information Administration expects Midwestern residents to end up paying more than consumers on the East and West coasts.
“The good news is that the rate is going down,” said Dave Sommerer, who works in the gas department for the PSC’s staff. “What you have to prepare for is the fact that if you have a cold winter, part of that bill is going to go up.”
For some customers, market fluctuations and weather don’t matter as much as economic circumstances. Since October, Community Action Partnership of Greater St. Joseph has processed more than 1,000 applications for Low-Income Home Energy Assistance, a federal program administered through the Department of Social Services.
Last year, the agency used all of its program funds, assisting more than 4,400 households, before the end of the winter heating season. This year, CAP is seeing applicants, many of them elderly or disabled, who lost natural gas service during the summer months and want to get reconnected in time for winter
“Unfortunately, that’s kind of the plight of poverty,” said Whitney Lanning, CAP’s executive director. “Which basic need is the most important basic need? There are a lot of people not paying one bill so they can pay another.”
Even with a drop in natural gas prices, those who are behind on last year’s bills won’t see the immediate benefit because they’re trying to catch up, Lanning said.
“It’s usually not the current costs,” she said. “So if costs are down this winter, they’re not going to see the effects for a while.”
Kevin Kelly, spokesman for the PSC, said consumers who fall behind on heating bills should call the utility as soon as possible to try to work out an arrangement. A partial payment is better than getting shut off because reconnection fees add to the financial burden.
At least those struggling with bills are unlikely to see the kind of price spike witnessed in 2005, following shortages in the wake of Hurricane Katrina. Natural gas was trading at nearly $15 per 1 million British thermal units in 2005. It was trading at $2.56 this winter, down 24 percent from last year.
Some analysts are predicting prices will dip close to $2 early next year, due to storage levels that remain above historic averages and increased drilling associated with the shale oil boom.