Governors focus on rising heating prices

Tuesday, September 19th 2000, 12:00 am
By: News On 6

COLUMBUS, Ohio (AP) _ Natural gas producers, suppliers and regulators will meet with U.S. governors on Wednesday to explain the marketplace and help them develop plans to deal with the high heating costs consumers are expected to face this winter.

Ohio Gov. Bob Taft, whose state is a heavy consumer, will hold the one-day summit in Columbus, Ohio, with Gov. Tony Knowles of Alasks, a large producing state. The summit will examine the possibility of a long-term natural gas shortage as demand for the fuel continues to rise.

``It's not a reaction to a crisis, not people jumping out of a burning building,'' Knowles said. ``It's trying to figure out what we can do to take advantage of a great natural resource and utilize it at an affordable price.''

States expected to send representatives include Illinois, Iowa, Indiana, Oklahoma, Texas, Pennsylvania, Kansas, Wisconsin and Michigan.

``We're going to have a winter that will be a challenge for all of us,'' Taft said. ``We need to figure out how to conserve, what we can do to protect those people who are least able to pay the higher prices, the low-income families particularly who may suffer a loss of heating because of the high prices.''

Normally, the wholesale price this time of year is about $2 per thousand cubic feet. That price has since doubled, said Jerry Jordan of the Columbus-based Independent Petroleum Association of America.

The Department of Energy has predicted that on average, consumers should see about a 25 percent increase in their bills this winter, according to the American Gas Association, which represents local natural gas utilities.

``If we have a mild winter, we'll be fine,'' Jordan said. ``If we have a cold winter, we could have serious problems.''

As the demand for electricity increases, utilities are looking for the cleanest and most efficient way to produce more energy. Increasingly in Ohio and around the country they are turning to natural gas _ contributing to the current price increase and the possibility of a long-term shortage.

In Ohio, for example, state regulators have approved seven power-plant proposals, with an investment of $880 million, to generate 2,795 megawatts of electricity using natural gas. These plants typically are used to generate power only at times of peak demand.

In New York, a state board has approved a proposal to build a huge $500 million natural gas fired 1,080-megawatt plant on the Hudson River.

Several states are already trying to cope with the effects of the price increase:

_In Indiana, officials are debating a suspension of the state sales tax on natural gas.

_In Iowa, the governor announced a task force to study energy consumption.