Q. Why do we expect gas prices to be higher this winter?
A. Wholesale prices are higher this year than last year. More gas is being used year-round than in the past. For example, most new electric generating plants are fueled with natural gas rather than coal or oil. The price of natural gas has also recently increased due to supply disruptions from Hurricane Katrina. These factors have a direct effect on natural gas prices.
Q. I'm concerned that I will not be able to pay high winter gas bills. What can I do?
A. If you have not already done so, call your local gas company and get on budget billing now. Rather than paying very high bills in winter and low ones in summer, budget billing evens them out so you pay a similar amount for all 12 months per year.
Try to lower your natural gas usage. There are a number of steps you can take. Every little bit helps.
___ Search for drafts in your home and seal them. Install weather-stripping and caulking around windows and doors to decrease drafts there. Even if you installed weather-stripping and caulking a couple years ago, you may need to reattach it or replace it. Make sure it is positioned properly to eliminate drafts. Use draft stopping gaskets specially made to fit behind switch plates and electric sockets.
___ Check your gas appliances to make sure they are operating properly. Change your furnace filter regularly and have your furnace serviced if you can. Keep your water heater set for a comfortable temperature. If your water is so hot that you mix it with cold water to use it, you are wasting money heating it to that temperature.
___ If you can be comfortable in your home with a lower temperature, turn your thermostat down a couple degrees.
___ The Office of Consumer Advocate can send you a free copy of an Energy Savings Guide, or you can find it online at the Department of Energy's website at: http://www.eere.energy.gov/consumer/energy_savers/. Call us at 800-684-6560 or check the OCA website at www.oca.state.pa.us for a more complete list of conservation links.
Look for ways to lower other bills you have to pay. For instance, you can save on your electric bill by turning off lights and only using your dishwasher and washing machine when you have full loads. Look at your telephone and cable television bill and see if you are really using all the services you are paying for. If you can save money on these bills, you may have that much extra to put towards your gas bill this winter.
Q. What if I cannot afford to pay my gas bill?
A. Contact your local gas company. Ask them to help you set up a payment arrangement based on your ability to pay. If you are within certain income limits, there are several other programs that may help you. Ask your gas company about its Customer Assistance Program, the federal Low Income Home Energy Assistance Program (LIHEAP) and weatherization programs. Companies also offer usage reduction programs to help low-income customers lower their bills.
Q. Did retail competition in Pennsylvania cause natural gas prices to rise?
A. No. The wholesale price of natural gas was deregulated by the federal government about twenty years ago. As a result, many large industrial and commercial consumers have had access to competitive markets for a number of years and, if anything, this has lowered their prices. Low supply and high demand are the main reasons for wholesale price increases.
Q. Do federal, state or local government agencies control the wholesale price of natural gas?
A. No federal, state or local government agency controls the wholesale price your gas company pays for the gas you use. The wholesale price of natural gas was deregulated by the federal government in the 1980's. The price of gas is now set by gas producers selling in the market. Local gas companies buy natural gas from suppliers throughout North America and transport it through interstate pipelines to your local gas utility. The local gas company distributes the gas to customers. Gas companies are allowed by PA law to pass the price of gas on to their customers.
Q. Does the PA Public Utility Commission (PUC) or the PA Office of Consumer Advocate (OCA) have any regulatory authority over the price my utility charges for its gas that it brings to my home or business?
A. Yes. Both agencies conduct an annual review of all gas utilities' purchasing practices to ensure that the price paid for gas is reasonable. Under the law, the local gas utility must provide reliable gas service at the least possible cost. The Public Utility Commission also regulates the rate your gas company charges for the delivery of gas to your home or business. Generally, your gas company collects these costs through the distribution charges on your bill. These charges cover the cost of metering, meter reading, billing, and the cost of distributing the gas to your home or business.
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