Increased natural gas use, higher prices mean utility bill sticker shock

By on February 6, 2014

As yet another frigid cold front blasts through South Texas, CPS Energy customers should be prepared to open substantially higher bills over the next three months, due to a confluence of factors: freezing temperatures and higher natural gas prices, plus rate and fee increases.

First, January was cold. Really cold. Nightime temps dipped below 40 degrees 17 times, and the average temp for the month was just above freezing, at 37.8 degrees. Last January, it was 43.1 – more than 5 degrees higher. February is shaping up to be colder than normal, too.

And the colder it is, the longer furnaces must stay on to heat your home, using higher volumes of natural gas (or more electricity, which is generated in part by natural gas).

In November, we advised that this winter would be more in line with a typical winter than last year’s mild winter, translating into higher bills. But the weather has been even colder than initially forecast.

Natural gas has also become more expensive–up to a third more than it cost just a month ago. Analysts say natural gas is at its highest price in at least three years. Why? Partly because of increased demand — see above. Frigid conditions across the country this winter have spurred demand. That has meant record natural gas storage withdrawals to meet that demand. Supplies of the heating fuel fell by a record amount last week on frigid temperatures,  reported the Wall Street Journal on Feb. 4, pushing prices even higher.

CPS Energy customers will see those higher prices reflected in the fuel adjustment charge on their bills, likely at least through April.

High gas prices may seem counter-intuitive given all the hype around the fracking boom that continues to spread across the country. But the bulk of drilling in the last few years has been for oil, not natural gas–and that’s because of the historically low prices gas has fetched in the past few years, when the boom first began.

Adding to the burden, state regulatory fees increased in December.  Those mandatory costs are passed through to customers as a regulatory adjustment charge on your utility bill, based on consumption. The rate increase approved by the San Antonio City Council last November also goes into effect this month.

What is not influencing the vast majority of bills is meter estimations, as was the case in late 2012 and part of last year, when a canceled meter reading contract led to an inordinately high number of meter estimations.  Some of those estimations led to incorrect bills.

All those errors were corrected by the middle of last year–and no customers ultimately paid for more power than they used. Today, estimates are back down to the industry standard of   1 -2 percent.

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Estimates are generally done when meters are inaccessible by locked gates, shrubbery or dogs. Like the industry as a whole, CPS Energy has always estimated between 1 and 2 percent of the more than 1 million meters it must read each month.

High bills can be a real hardship, and CPS Energy is committed to helping those in need.

CPS Energy expanded its Affordability Discount program, which helps qualified customers by reducing their monthly bill by $12.30 for gas and electric service.

There are other programs to help low income customers pay bills, including the Residential Energy Assistance Program, known as REAP. A partnership between CPS Energy, Bexar County and the City of San Antonio, REAP offers assistance with utility bills to those who qualify up to twice a year — once in the summer and once in the winter, when bills are highest.

The program is administered by the city’s Department of Human Services and Bexar County’s Department of Community Resources. Every dollar goes to those in need, because the city and county pay the administrative costs.

CPS Energy offers other ways to save energy and help reduce bills, too. Low income customers may be eligible for free weatherization measures through the Casa Verde program.

For those in the market for new appliances, look for the Energy Star label as a way to reap long-term savings. Rebates for insulation and other products to reduce energy use can be found at cpsenergysavers.com. The site includes free and low cost “quick tips” as well.

And while no one likes the sticker shock of a high utility bill, take heart. Even though groundhog Punxsutawney Phil may have predicted six more weeks of winter, South Texas temperatures will likely be balmy by March.

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