According to the Short-term Energy Outlook from the Energy Information Administration, natural gas prices will be up and if seasonal temperatures return to normal—last year was unusually mild in parts of the nation— Nebraskans could be spending a lot more to ward off the winter chill.
A Third or
Current projections estimate a 37 percent hike in the cost of natural gas. Most natural gas bills in Nebraska are divided in three parts, one of which is the cost of gas. The actual cost of the gas is usually less than half the total bill for residential users. The other two parts—cost of retail service and transmission— do not fluctuate as much as the price of the fuel.
The Outlook found electric utilities were increasing natural gas use— often used to power turbines that are operated when electricity use is high, especially during hot summers. As a result, natural gas stored for winter use was being depleted faster than expected and could lead to higher prices when winter's bitter north winds begin to blow.
The Energy Information Administration's near-term projection for propane prices and demand has not been issued. However, customers should also expect price increases since propane can be produced from either natural gas or crude oil, which is also up over last year by about 24 percent. Some independent oil market watchers have said oil prices could rise an additional 25 percent to around $25 a barrel by the end of the year, if rising demand continues without an increase in production.¶
Return to the Summer 1999 Newsletter