Thursday, October 27, 2005

Poor may have to choose between heating and eating.

Despite dire warnings of energy shortages and skyrocketing natural gas prices, the Senate this week voted down additional funding for the Low-Income Home Energy Assistance Program that would assist low-income families with their heating bills this winter.

According to the article, Sen. Jack Reed (D-RI) "cited estimates that those who heat their homes with fuel oil will need $1,600 this winter, up $380, while the cost of using natural gas for heating could rise $500 to $1,400."

Some local governments are looking at ways to provide assistance. Louisville, Kentucky for example, is considering a proposal to make $250,000 available for assistance after the Kentucky Public Service commission approved Louisville Gas and Electric Co.'s request for a 64% increase in natural gas prices.

In East Tennessee, utility companies have been bombarding us for weeks with warnings about natural gas price increases. The Knoxville paper reported last week (registration required):
KUB customers' natural gas bills could increase 50 to 60 percent this winter, largely because of hurricanes' disruption to the flow of natural gas from the Gulf of Mexico.

Mike Bolin, KUB vice president of business services, said Hurricane Katrina "hit the (natural gas) producing facilities offshore in the Gulf of Mexico at the end of August. Less than a month later, Hurricane Rita came in and what wasn't hit by one hurricane was hit by the other. These hurricanes were very intense and caused a great deal of damage."
The Maryville paper reported nearly a month ago:
Natural gas prices are forecast to skyrocket this winter, as demand exceeds supply and distribution facilities reel from the effects of two Gulf Coast hurricanes.

A spokeswoman for Atmos Energy, which provides natural gas to 18,000 Blount County customers, said costs to Blount Countians will increase by 54 percent next month when compared to October [2004].

"The increase is totally due to increased gas cost," said Atmos public affairs manager Judy Moss.
She stressed the escalating cost of natural gas does not represent a "rate increase," as the corporation's rates as allowed by the state have remained static since 1996. The company is merely passing on its increased cost of supplying the gas, and Atmos will not realize any additional revenue, Moss said.

She said the effects of hurricanes Katrina and Rita on distribution networks and an increase in the wholesale cost of natural gas led to the increased cost to customers.

This is the refrain we he hear from energy companies all over the country. Supplies are tight. The hurricanes disrupted supplies. Demand is high. Etc.

Except something doesn't add up.

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