With the high cost of natural gas continuing to be a major customer concern across the country as the nation approaches the winter heating season, Vectren Corp. informed its utility customers that although higher gas prices are in store, gas bills might be lower than last year due to milder temperatures.

Evansville, IN-based Vectren pointed to the Energy Information Administration’s (EIA) winter projections that showed a 5-17% projected increase in gas prices depending on weather.

For its Evansville customer base, Vectren said prices will be up less than 1% as compared to last year based on normal weather. However, when compared to average actual bill totals of last heating season, a winter that was 8% colder than normal, the company expects customers to see about a 6% decrease.

In its Indianapolis, IN, service area, prices could be up 5% based on normal weather, but when compared to average actual bill totals of last heating season, a winter that was 7% colder than normal, customers should see about a 3% decrease. In Vectren’s Dayton, OH, service area, the company informed its customers to prepare for a 17-23% increase this winter compared to last year’s heating season.

“We have a disciplined purchasing strategy to help reduce the market price volatility,” said Bill Doty, Vectren executive vice president. “Our ‘portfolio’ approach resembles the manner in which many people use dollar cost averaging to invest in 401(k)s. This strategy consists of buying gas in the market at different times and from multiple sources. It is designed to help level the impact of commodity price spikes which may occur when temperatures drop below normal and supplies tighten.”

The company noted that summer gas prices are also impacting utility bills, as prices have remained in the $5-6/Dth range this summer compared to the $3-3.50/Dth range during the summer of 2002. Historically, gas prices have dropped significantly in the summer as the use of gas for heating decreased, allowing utilities to refill storage at lower prices. However, over the last few years there has been a higher summer gas demand as many electric utilities now use gas to produce electricity.

“Over the last several years there has been significant change in the gas marketplace and a significant change in the status quo of what’s considered ‘normal’ prices for the natural gas commodity,” Doty said. “From 1990 through Dec. of 1999, the average price of gas was $2.03/Dth; from 2000 through Sept. of 2003 the price has averaged $4.26. Realistically, until the nation adopts a national energy policy to increase access to natural gas and thus boost production, this higher level of commodity pricing will likely continue.”

Doing its part to help get the new national energy policy in place, Vectren said it continues to work with various congressional delegations and trade groups such as the American Gas Association and Edison Electric Institute.

In addition to touting conservation and improving the efficiency of their homes, the company also reminded its customers of numerous programs to help them with their bills through the winter.

“Obviously a colder than normal winter can dramatically change our projections, so we are urging residential customers to consider Budget Bill as an alternative that will lessen the short-term impact of such potential price increases,” said Doug Karl, Vectren’s vice president of marketing and customer service. “In addition, our Share the Warmth program will provide income-eligible customers with opportunity for assistance.”

Vectren’s energy delivery subsidiaries provide gas and/or electricity to nearly one million customers in adjoining service territories that cover nearly two-thirds of Indiana and west central Ohio.

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