With natural gas prices currently spiking, CenterPoint Energy Minnegasco (CEM) informed its residential gas customers that the March natural gas billing rate is going to be much higher than it was for February.

The Minneapolis-based local distribution company — which serves more than 728,000 residential, commercial and industrial customers in over 240 of Minnesota’s communities — said the March billing rate is $1.06 per therm compared to $0.74 in February, an increase of 43%. The company noted that this increase will result in average residential customer bills seeing a $14 jump from February levels.

“What we’re seeing in the industry is unusual for this time of the heating season,” said Joe Klenken, CEM’s regulatory specialist. “Historically, prices usually decrease at the end of the heating season. This latest price increase, however, is the result of colder than average winter weather nationally combined with reduced production and supply levels. The overall impact of this rate increase is offset somewhat because March is typically a lower consumption month compared to the other heating season months.

“We recognize this increase may create difficulties for some of our customers, especially those living on low or fixed incomes. Anyone concerned about how to manage their energy costs should contact their utility immediately,” Klenken added. “Our customers need to know this situation does not affect our ability to deliver natural gas — today or into the future. Reliability is not an issue.”

CEM said that forecasts throughout the heating season indicated customers could expect to see an increase of 25-30% in their annual bills compared to last year — based on a return to normal weather conditions after one of the warmest heating seasons on record. However, CEM said that as a result of higher than projected wholesale gas prices and colder weather, the average customer who expected to pay about $770 from August 2002-August 2003 will likely pay closer to $870-$900, an increase of 45-50%. The company pointed out that prices for other heating fuels such as propane and oil are also increasing.

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