No escape from rising natural gas prices
September 29, 2005
The Public Utilities Commission, major utilities and the Bureau of Consumer Protection agreed Thursday: There’s no escape from skyrocketing natural gas prices this winter.
“In one year, the price of gas has more than doubled,” said Roberto Denis, senior vice president for energy supply at Sierra Pacific Power/Nevada Power.
William Moody, who holds the same position at Southwest Gas, said the market is so volatile that the price his company must pay went up more than $1 per decatherm on Wednesday. He said gas that was selling for $2 in 2000 is now selling at $13.50.
And David Chairez of the PUC said the rising costs won’t be confined to gas use in the average home or small business. He said two-thirds of the natural gas piped into Nevada in 2003 was used to generate electricity, which will also become much more expensive this winter since Nevada law requires the cost of buying gas or electric power be passed on “dollar for dollar” to the consumer.
The PUC staff is already recommending Sierra Pacific be allowed to raise gas prices as much as 27 percent and Southwest Gas by 12.48 percent in western Nevada. Chairez said more increases may be on the way if gas prices continue to climb.
Chairez emphasized the utilities aren’t to blame. He said the increase in gas prices is a national problem that neither PUC nor Nevada’s utilities have any control over. He said they have done everything possible to keep gas prices under control – including signing long-term, fixed-price gas contracts before the big increases hit this past year.
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Moody said those fixed-price contracts will provide Southwest with 64 percent of its gas needs this winter at just $6.73 per decatherm – less than half today’s market price.
Without those contracts, they made it clear, the price increases would be much larger.
They and others who made presentations at a PUC forum video-conferenced to Carson City, Las Vegas and Elko, said consumers have only one option – conservation.
“That is, in the short term, the only way can reduce costs,” said Denis. “We need to be wiser in how we use the energy.”
Denis said Sierra Pacific will roll out its “Winter of 68” campaign- a reference to setting household thermostats at 68 degrees – in October.
He said the company is also developing a program that will offer consumers rebates for replacing appliances with much more efficient models and taking other conservation measures.
Conservation measures, Moody said, can cut energy use in a home by more than 20 percent.
– Contact reporter Geoff Dornan at firstname.lastname@example.org or 687-8750.