MPR: The Cost of Winter Heating Hits Home

The Cost of Winter Heating Hits Home
By Dan Olson
December 12, 2000

Just as the weather has turned bitterly cold, Minnesotans are facing much higher bills for natural gas. It may be a relatively short-term increase, as analysts are already expecting next year's bills to be lower. But this winter, many homeowners and businesses face monthly heating bills more than 50 percent higher than last year's.

SAVING MONEY ON ENERGY
For a series of tips on how to save money heating your home, see the State of Minnesota's Department of Public Service Web site.

FIRST THE GOOD NEWS, SUCH AS IT IS. Mary Menino from Massachusetts-based Energy Security Analysis, a forecasting firm, says more drilling rigs are back in operation, more gas pipelines are being built and more gas is on the way. But it will be spring, she says, before the additional supplies become available, and another six months beyond that before we see anything that will make a major dent in the supply problem.

The supply problem, Menino says, can be traced to the early '90s. Drillers weren't making enough money. Rigs were shut down. Natural gas production declined. But demand for all forms of energy is now growing. Menino says demand for natural gas is being pushed up by electric utilities faced with tougher regulations for burning coal.

"The easiest thing to add is natural gas, so they add natural gas power plants, which put a tremendous load on the pipeline. When they are turned on they demand a lot of gas at any one time," Merino said.

The natural gas squeeze means sharply higher prices for everyone, including Etta Soine. She's paying a fixed amount, $120 a month for home heating costs, on the utility company's so-called "budget plan." The only way she can pay her bills is to work two days a week handing out food samples at an Edina grocery store.

"My Social Security doesn't go far enough to be extravagant and this is what I play around with to give me extra money to do things," Soine said.

South Minneapolis resident Ellen Irish received the bill for heating her small, white stucco bungalow a couple of weeks ago.

"It was very high, over $170, and we haven't even had cold weather yet," Irish said.

Irish says last year's heating bill for the same period was about $85. She says she and her husband, Larry Irish, can afford higher heating costs with the help of his Postal Service pension.

A great many Minnesotans will curse, cut back here and there but will find a way to pay natural gas home heating bills. Minnesota energy assistance spokeswoman Kim Rezek says the story is quite different for many Minnesotans who need help paying their energy bills.

"Last year we served 84,000 households and we estimate that in the state there are probably 260,000 to 280,000 households that could be eligible for our program," Rezek said.

HITTING HOME
The energy crunch can be felt in more than just your pocketbook. The increased demand also is reflected in environmental issues, spawned by the need to expand generating capacity in the state. Here are examples of current expansion issues facing Minnesota.

For a family of four to be eligible for assistance, they can earn up to $33,500 dollars a year. Rezek says applications for help are nine percent ahead of last year. She says Congress may act this month to increase energy assistance funds. Minnesota receives $58 million in federal dollars. Officials in the energy assistance program predict those funds will be depleted before winter is over.

So far, there's no sign that Minnesota lawmakers are inclined to supplement the federal energy assistance money. Minneapolis resident Larry Irish says he'd gladly forgo his state tax refund so the state can do just that with some of the projected revenue surplus.

"There's an area there where we should put aside some of that money to help these people who are really in trouble," Irish said.

Minnesota doesn't face a chronic energy crisis as California does, where energy use is being rationed for businesses and homeowners because of utility deregulation. But Minnesota homeowners who heat with natural gas and paid $600 last year can expect to pay nearly $1,000 this year, and even more than that if this winter is colder than the previous three.

Next: Energy Demands Pressure State's Resources, Capacities

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