Looking ahead...

As gas costs increase for your car, they will also increase for your house this winter--by about 30%. Now is the time to weatherize your home and start thinking about making some lifestyle changes in your home energy use.

From the Commercial Appeal...

MLGW customers will feel spike in natural gas, electricity
By Amos Maki

Consumers already feeling the pinch at the gas pump could be in store for another round of sticker shock when they get their utility bills in late summer and fall.

Memphis, Light, Gas & Water Division officials say residential customers could see a 30 percent spike in the cost of natural gas this fall. That's in addition to electricity rates that have jumped 13.5 percent over last year's rates.

"What you see going on at the fuel pump is happening across all energy sectors, so we're seeing it in natural gas and we're also seeing it in electricity," said Laura Campbell, assistant manager of energy resources at MLGW and an energy adviser to the Commodity Futures Trading Commission. "Across the board, all these fuels have increased dramatically."

As residents enter the peak cooling season in the Mid-South, their utility bills will show the higher prices for electricity more dramatically. The same will happen for natural gas during the peak heating season this fall and winter.

"It all comes down to supply and demand," Campbell said. "Demand continues growing at a steady rate and any change to the supply picture really affects price."

The Tennessee Valley Authority, which supplies MLGW with electricity, increased its wholesale fuel costs by 2.1 percent July 1. The fuel cost adjustment came four months after the TVA passed a 7 percent base rate increase for electricity.

MLGW is required by its contract with TVA to pass along increases or decreases in power costs to retail customers.

In January, MLGW implemented a 6.7 percent gas rate increase and a 15 percent water rate hike, raising average monthly bills about $5.61 for gas and $1.71 for water.

Natural gas futures have gone up 82 percent since Jan. 1 and finished last week at their highest point in more than 21/2 years, according to the U.S. Energy Information Administration. Also, residential electricity prices are projected to increase by an annual average of about 5.2 percent in 2008 and 9.8 percent in 2009 compared with an increase of 2.2 percent in 2007.

The "typical" MLGW customer paid $158 for natural gas in January 2008. With the predicted 30 percent increase, that same customer would likely pay $195 in January 2009.

There are several factors contributing to the soaring prices.

Campbell said consumers and utilities aren't experiencing the typical early summer dip in natural gas prices -- after the high demand during the winter season and before the midsummer spike when utilities fire up more natural gas-powered plants to handle cooling demand.

"There just wasn't the normal dip in early summer," she said. "It has just continued to increase without the usual seasonal cycles."

In addition, pipeline capacity that delivers the natural gas is extremely tight and results in higher prices.

Speculation and rising oil prices also play a role.

Campbell said MLGW customers should use the summer months to weatherize their home by sealing leaks, adding insulation and taking other steps to improve energy efficiency.

"People are making lifestyle changes as it relates to their car, and what they need to realize is they need to make lifestyle changes as it relates to their energy use and utilities at home," she said. "People have a lot more control than I think they realize."

The rising energy costs are hardest on those who can least afford it.

Metropolitan Inter-Faith Association vice president of public relations Elizabeth Garrett said rising fuel prices have already resulted in a 30 percent increase in requests for food vouchers as individuals are forced to choose between filling their gas tanks or their refrigerators.

Garrett said things could get much worse if utility bills continue to escalate.

"People that are walking in the door right now are coming from bills two months ago," she said. "We don't have a crystal ball, but I certainly expect we will have increased demand."

Memphis resident Dorothy Hayes fears rising utility costs could be the last straw for some.

"Everything is going up, gas and food, and there are a lot of older people who can't afford it," said Hayes, standing outside the Downtown MLGW payment center at Main and Pontotoc. "I don't think its fair because everything is so high."

By the numbers

30 percent: Expected increase in natural gas costs this fall and winter

13.5 percent: Increase in electricity costs over the past year

$158 per month: What the “typical” MLGW customer would have paid for gas in 2008

$195 per month: What the “typical” MLGW customer will likely pay in 2009, depending on usage

Reducing costs

MLGW and other local officials are urging customers to weatherize their homes now and look for other ways to reduce energy consumption. The utility's Web site offers a broad range of information on weatherization and energy-reduction techniques, in addition to these bill-paying programs:

MLGW SmartPay: The utility analyzes the customer's previous year's total usage, adjusts for rate changes and weather conditions and divides the total into 12 monthly installments, eliminating any surprises.

MLGW OnTrack: A budgeting-education program provided by MLGW that provides energy and financial information to customers in need of help.

MLGW Winter Moratorium: For people 60 and over. It delays any pending cutoff of residential services for qualified customers during December, January and February.

MIFA Plus-1: A program that allows customers to add $1 or more to their monthly MLGW bills in an effort to help needy customers who qualify.