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Thursday, December 11, 2008


It's a (natural) gas, gas, gas

I opened my NW Natural bill for the month of November earlier this week and you won't believe what I saw. Ok, so maybe you can believe it or at least make an educated guess. It was high. Much too high. To use a pot analogy, it was well north of Eric and his stoner pals on That '70s Show and just a tad below James Franco's character in Pineapple Express.

I live in a 400-square foot rental house built in the 1920s. Granted, it's not the most perfectly insulated 90-year old ramshackle. There's a drafty root cellar, the windows are single-paned and I have a sneaking suspicion that the walls are insulated with newspaper articles about the 1929 stock market crash. Nevertheless, I still don't think this place warrants a huge monthly heating bill. Since my "Lucky Bamboo" plant doesn't seem to mind, I keep the thermostat off while I'm at work and the temperature at 60 when I go to bed. I've weather-proofed the windows and doors but I'm not about to drop a mint on insulation for a rental.

Why the dramatic increase? NW Natural Gas hiked their rates up by 14% this season.

But what has happened in the past few months? The price of gas has, pardon the pun, completely tanked. I went to NW Natural's website in search of answers and found some clearly dated information. Choice quote: "Natural gas prices can track with oil. At a time of high oil prices, gas costs can also be high." The site's FAQs section further addresses the issue and says that the company decided to raise rates despite falling prices because, at the time, they were higher than they were in 2007. Plus, they purchase gas throughout the year and, presumably, the projected drop wasn't enough to offset the inflated prices NW Natural was paying during the bulk of 2008.

Here in Portland and across the country, the average price of a gallon of gas is now less than half of what it was in August. Natural gas has followed a similar pattern. According to this article, natural gas prices that ran $13.06 per thousand cubic feet in June fell to $5.74 in trading this week. So does this mean that my gas bill will reflect these changes next month? Unlikely.

Knowing next to nothing about fuel trading and economics I used my mediocre journalism skills to track down further information. By "track down," of course, I mean I called NW Natural and put one of their phone representatives on the spot, figuring they must have fielded a thousand calls about this in the past few weeks. Nope. Instead, I was put on hold for five minutes while the rep went in search of a response. She apologized for the wait and said that the company sets its annual rates in late summer. Even if the price of natural gas drops to a nickle a barrel by Christmas, I and my fellow natural gas users in the Portland area will still be paying inflated prices this winter.

If I take NW Natural's website on its word, presumably, customers will be paying higher bills to offset their jacked-up fuel costs from earlier in 2008. Here's another quote from the site. Get ready to roll your eyes.

"We do everything we can to keep gas costs low because higher gas costs don't benefit our customers or our company.

NW Natural's financial future depends on our ability to satisfy our existing customers and attract new ones. Higher rates make it harder for us to do that. In addition, regulators oversee our purchasing strategies to ensure we are making prudent decisions."

Naive statement time: based on this, if the "regulated utility company" manages to quickly offset their loses, given the abrupt and dramatic drop in the value of natural gas in recent months, shouldn't they pass those savings on to a customer base suffering through an economic downturn and/or poor widdle renters like me? It's not like I can tear the furnace out of the basement and replace it with wood stove. I don't think my landlord would be too cool with that.


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