Staying Warm This Winter May Be Costly As Heating Bills Are Expected To Rise

After being bankrupted by last winter’s weather, you’re trying to guess how much to budget for this winter’s
heating bills.

So you turn to the forecast released Thursday by the National Oceanic and Atmospheric Administration: This
winter, they say, may be colder, warmer or much the same.

Some help.

To which Mel Goldstein, a meteorologist with WTNH Channel 8, said, “Now you know where your tax dollars are going.”

So what does “Dr. Mel” think?

“I’m not ready to count the width of the stripe on the woolly bear yet, but early indications are that it may be
colder,” Goldstein said. “So far for the month of October, we’re averaging one and a half to two degrees colder
than normal right now, so if that pattern is sustained into the first half of November, I’d say be prepared for
some pretty good heating bills.”

That’s not good news for Connecticut, particularly if you’re heating with gas.

Dave Costello, an economist with the federal Energy Information Administration, said Thursday his agency is
forecasting natural gas prices will be about 9 percent higher this winter than they were last year, and that’s if
we just have a normal winter.

If things get really nasty, like they did last year, count on gas prices to go even higher.

Aside from the pressure exerted on prices by higher demand, gas companies had to make up for depleted reserves, and when they did, they had to pay higher prices for the gas they bought.

“The utilities were paying a lot for gas over the summer,” Costello said. “They put a whole lot of gas in storage
this year at a very high cost, and much of those costs are going to be reflected in the bills this winter.”

Costello’s agency is predicting that the average gas customer will be paying about $42 more this season to
heat his or her home.

Even if we have a normal winter, Costello said, we may still end up paying about the same amount we paid last
winter, because gas prices are so much higher.

Three factors conspired to raise prices, he said: the cold, a tight oil market, and a decline in nuclear power.

“All those things pushed up the demand for natural gas,” Costello said. “And that left us in a deficit situation
that had to be made up, and that usually has an impact on spot prices for the summer.”

Mary Ingarra, a spokeswoman for Yankee Gas, which serves about 191,000 customers statewide, said her company had to pay $4.75 per thousand cubic feet for gas this summer, compared to $2.50 to $3 the year before.

“Unfortunately,” said Ingarra, “that increase is passed on to the customers.”

There are steps customers can take to lower their gas bills, Ingarra said. There are payment programs to spread out the cost of gas over the year, and, for people who simply cannot afford the full cost, a matching payment program for low-income customers.

Yankee and Connecticut Light and Power are working with social service agencies around the state to ensure that no one is without heat this winter, Ingarra said. Persons who need help in paying their bills should call Info
Line at 211, which will put them in touch with their local social service agency, she said.

As to the price of home heating oil, the news is somewhat better.

“Going into the fourth quarter of this year, oil prices are relatively high,” Costello said. “OPEC has announced
that beginning Nov. 1, it’s cutting back production, so that will keep prices high.”

The Energy Information Administration predicts that home heating oil will cost in the vicinity of $1.33 a gallon if
it’s a normal winter. Of course, if it’s a tough winter, that price will go higher.

Which is why oil dealers all tout their plans to lock in the price or “pre-buy” your oil.

“People can lock in at a price, and this would protect them in case there’s any type of spike,” said Rick Pothier,
sales manager for Eastern USA Fuel Inc., which serves New London and Windham counties.

Most people lock in a price in May, he said, and those that did are getting their oil about 15 cents a gallon
cheaper than the price right now, which is $1.32.9.

Mark Mazzella, one of the owners of Benvenuti Oil Co. Inc. in Waterford, said about half of his customers prebuy
their oil, and “all the oil we pre-sell, we pre-buy, that’s how we sleep at night.”

Not surprisingly, Gene Guilford, the executive director of the Independent Connecticut Petroleum Association,
said that even at $1.33 a gallon, home heating oil is a better bargain than natural gas.

The price of a “gallon” of Yankee natural gas, he said, would be $1.66.

Even worse is the cost of heating with electricity. Guilford said there are 25,000 electric heat customers in Connecticut who are paying the equivalent of $4.19 a “gallon” from CL&P.

As to predictions of prices to come, Guilford said, “I worked at the Department of Energy a long time ago and I
have great respect for the Energy Information Administration, and I think very intelligent, well-meaning people
are trying to read the tea leaves and make a good-faith estimate based on assumptions.

“But when it comes to what is a gallon of heating oil going to cost next March, I could more easily tell you what
the Dow Jones is going to be next March. And if I could tell you that, I wouldn’t need this job.”

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