WP: Deflecting Heat (gas utilities say not to blame for huge bills)

Deflecting Heat
As Weather Chills, Gas Utilities Stress Lack of Price Control
By Justin Blum
Washington Post Staff Writer
Saturday, December 10, 2005; Page D01


Utility companies around the country are so concerned about consumer outrage over huge natural gas bills this winter that they have launched public relations campaigns to convince customers that the companies are not to blame.

"BGE has no control over these price increases," says a Baltimore Gas & Electric Co. radio commercial. "Nor do we profit from them."

In newspaper ads and on radio and TV, utilities are hammering the message that they are simply passing along costs from natural gas producers and are not pocketing a big bounty. The message also is cropping up in newsletters included with bills and fliers handed to customers. Utilities are even specially training customer service operators so they know how to explain higher prices to irate customers....

***

The advertising generally does not explain who is making more money from higher natural gas prices.

Higher prices are benefiting the companies that produce natural gas, including major oil firms such as Exxon Mobil Corp., Royal Dutch Shell PLC and BP PLC. Analysts said that natural gas is a cyclical business and that the companies are benefiting from the current spike....


http://www.washingtonpost.com/wp-dyn/content/article/2005/12/09/AR2005120901948.html

I think the gasoline prices came down TEMPORARILY because those same gasoline producers are heavily involved in the production of natural gas. They figured they could keep their profits up through the winter months through the natural gas, and make it LOOK LIKE they were reducing the gasoline prices for everybody.

Now, since the pump prices are going back up again, it looks like they figure they can actually do BOTH and get away with it!

If they tell you you aren't freezing to death, you won't be cold.

"BGE has no control over these price increases,"

Like, they can't negotiate? They purchase so little of the product that they have no control? BS.

additional money for heating subsidies, will they be held accountable? Let's make sure they are!! Does anyone know where I can get a list of those reps who voted against the amendment for additional subsidies?

I only heard about them as a big bugaboo used by Reagan as one more area that supermantaxcutter was needed in washington... but I never understood what they were nor how they worked... but it seems that were they ever a good idea - this would be the area which should be considered.

No, it's probably not the distributor's fault, but rather, the drillers, pipeline owners etc.

"Natural gas prices have been rising as demand has accelerated faster than supplies have come on line. Hurricanes Rita and Katrina worsened the situation by knocking out production in the Gulf of Mexico, some of which remains out of service."

I'm wondering why demand has risen so fast from this year over last year? After all, the prices didn't shoot up until just within the last year. The economy is slumping too. That should cause a reduction in use by American industries. Are all the unemployed people sitting at home and turning up their thermostats? Then they use the canned "Hurricane Katrina excuse". The energy industry always seems to have an excuse: Natural disasters, political instability, hot summers, cold winters... The end result is always that their prices and profits soar.

"Unlike crude oil, which can be transported around the globe on ships, natural gas is largely a regional product, flowing through pipelines. Natural gas can be liquefied and transported like oil, but there is little excess supply available for shipment to the United States. Therefore, natural gas companies cannot make up for big domestic supply disruptions by simply importing more, as oil companies do with their product."

Hmmm.... If it's such a regional product, then why did Katrina cause prices nationwide to soar? Are they trucking liquified natural gas from other parts of the country to serve the gulf region suppliers? They don't even use that much natural gas down south. Water heaters yes, but they sure don't use their furnaces as much as other regions.

... is set on the commodities markets. Unless there is collusion or the like, it is set by buyers and sellers en mass.

What these guys are saying is true, no matter how distasteful the situation may be.

in California.

:bounce: