Following last year’s record winter warmth and lower energy prices, Yankee Gas warned that consumers can expect to pay higher energy prices “across the board” this heating season. The U.S. Department of Energy (DOE) said demand for gas is expected to increase 12% compared to last year, assuming normal weather.

In addition, the DOE also is predicting natural gas prices will increase 19% on average nationally, compared to last year, while heating oil will increase an average of 45%. Yankee Gas, which serves 191,000 customers in Connecticut, said the increase comes at a time when production is down, the economy continues to have a negative effect on consumer spending patterns and the U.S. appears poised for war with Iraq. The company added that weather also has to be taken into account.

“The weather is always the wild card,” said Marc Andrukiewicz, director of Gas Management at Yankee Gas. “We could have another mild winter, like last year, or it could be much colder. Either way, the weather has an effect on demand and, consequently, price.” He added that regardless of the weather, consumers should get used to the fact that natural gas prices will continue to fluctuate in the foreseeable future.

Looking forward into the winter heating season, Andrukiewicz assured customers that Yankee is well-positioned to meet customer needs. In addition to storage supplies, the company said it works hard to buy gas under a mix of contracts that deliver the best value to customers.

Going forward, Yankee said it is taking steps to insulate its customers from the volatile market. Andrukiewicz said the construction of a proposed LNG facility is one way of accomplishing this goal. “Having an LNG facility, like the one we’re planning to build in Waterbury, will give us greater flexibility and security of supply,” said Andrukiewicz. “It will allow us to buy gas when prices and demand are typically low, store it and then use it when prices and demand go higher. That’s good for all of our customers.”

Despite its volatility, Yankee Gas said gas remains the most popular home heating fuel in America because consumers prefer its comfort, efficiency, reliability and value. According to the company, most new single family homes (7 of every 10) choose natural gas heat which can increase the value of a home because of its desirability. To meet the growing demand for natural gas in Connecticut, Yankee Gas is in the second year of a multi-year system expansion effort to deliver more energy options to businesses and residents across the state.

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