Weather fluctuates heating costs

A mild winter last year treated area homeowners to what amounted to a discount on heating costs and the coming winter could bring more of the same.

Another warm winter coupled with the low price of natural gas would come as a relief to consumers, who have seen energy prices in other areas rise in 2012.

“With last winter being so warm, people used less heat and that was a big factor in most heating bills being lower,” said Montana-Dakota Utilities Co. spokesman Mark Hanson. “With natural gas prices down right now, that could also bring prices down, but that could change based on a number of factors.”

With most homeowners in Dickinson relying on natural gas to power their furnaces, the recent dip in the price of the commodity could be a welcome sign. Natural gas futures fell to $3.32 per 1,000 cubic feet Friday and in the past year, natural gas has fallen nearly 12 percent.

Still, Hanson said the biggest single factor — besides furnace and filter upkeep and seasonal adjustments — in the fluctuation of heating costs is the weather.

“We don’t make anything off natural gas,” Hanson said. “Whatever the price is for gas is the price the customer pays. It’s a straight pass through and natural gas is the majority of a customer’s bill. Our last natural gas general rate increase occurred in 2004 when a 2.1 percent increase was approved by the North Dakota Public Service Commission.”

Needing a green light from the PSC for any increase, Hanson said there are currently no plans to ask for such a hike. Although the roughly 7,100 MDU customers in Dickinson are safe from an increase, customers in Montana face a different reality.

On Wednesday, MDU filed a natural gas rate increase request with the Montana Public Service Commission. If approved, the hike would increase residential customers’ monthly bill by an average of $3.37, according to a news release. Reasons listed for the increase were heightened investment in natural gas facilities and a new customer billing system.

Despite the uptick in rates for MDU’s Montana customers, natural gas is abundant right now in the U.S. and even more could be on the way. A drive around the Bakken illustrates just how much natural gas is out there.

Thousands of flares are currently burning at Bakken oil wells — essentially natural gas being burned off into the atmosphere. Currently, there isn’t a logistical solution for bringing that gas to market, but Bruce Hicks of North Dakota Oil and Gas said that is changing.

“In the past year, there has been $4 billion spent by the oil and gas industry for development in the area of natural gas,” Hicks said. “We’re talking about an area (the Bakken) right now of 16,000 square miles. You would have to connect those wells and that infrastructure isn’t currently in place. Right now, gas lines are full to capacity, so there is plenty of natural gas.”

As for weather predictions for the upcoming winter, Adam Jones of the National Weather Service in Bismarck said it’s looking like another mild one.

“From what we’ve seen from weather patterns, that’s what we’re expecting,” he said. “A lot can change, but we’re currently looking at another mild winter. We are expecting, however, an increase in precipitation.”

For some tips on keeping your heating costs down during the colder months, visit the Press website.

Tags: news, weather