www.post-gazette.com Saturday, March 01, 2003 By Gary Rotstein, Post-Gazette Staff Writer

The winter of plunging temperatures has turned into the season of soaring heating bills.

Customers reviewing their latest utility statements have been hit flush with the cost of the coldest January in nine years, which is just part of the coldest December-February stretch since 1978-79.

Residential heating systems consume more fuel, whatever the source, when outside temperatures drop. That has affected bills at the same time utilities have passed along to customers their rising supply costs, influenced by a variety of national and world conditions, including the threatened war with Iraq.

The average January cost for Dominion Peoples residential customers was $195.61, compared with $104.93 a year earlier, said Elmore Lockley, the gas company's spokesman.

About $52 of the increase was due solely to the cold weather affecting consumption, Lockley said, and $38 to the gas cost itself.

He said the latter was affected by Middle East supply concerns, a slowdown in drilling new gas wells during mild weather last year, oil supply disruptions in Venezuela and other factors of supply and demand. Some large energy consumers that typically use oil are able to switch to gas when oil supplies dwindle or jump in cost, but that in turn affects gas supplies and costs.

Other local utilities say their customers also have experienced increases, although direct January-to-January comparisons weren't available. Even without the impact of cold weather on an individual household's consumption, supply costs would be about $41 more in January than a year ago for Columbia Gas Co. customers, said spokesman Rob Boulware.

The higher bills mean many customers may fall behind in their payments shortly before April 1, the date when the Public Utility Commission ends its annual cold-season moratorium. Utilities are barred from terminating service from December through March of households unwilling or unable to pay debts.

Utilities typically start sending out notices in March threatening termination in April of customers who are far behind with bills.

The harsh winter conditions won't change that, said Equitable Gas Co. spokeswoman Cindy Jergan, but she said low-income households and others with financial problems can often avoid shutoff by explaining their situation and making special arrangements.

"We're willing to work with customers to get them set up on a payment plan," she said. "We encourage customers to contact us in advance" of encountering huge debts.

Recognizing this winter's strain on household costs, government officials have boosted the amount of aid available to low-income families to maintain their heat supply. Both the Pennsylvania Department of Public Welfare and Dollar Energy Fund, sponsored by a consortium of utilities, are receiving applications from needy consumers.

"We definitely want families across the state to know there is still time to get help," said Stephanie Suran, spokeswoman for the welfare department, which administers the federally funded Low Income Home Energy Assistance Program.

LIHEAP makes payments averaging several hundred dollars to utilities on behalf of households within 135 percent of the federal poverty level. That puts the qualifying ceiling at $11,961 for a single person and $24,435 for a family of four.

As of a week ago, the state had approved 244,425 LIHEAP cash grants totaling $57.7 million and 75,566 of the program's "crisis" grants, totaling $12.7 million. The crisis grants are for people with emergencies in which they may lose their home heat -- due to utility shutoffs, broken equipment, difficulty paying for deliverable fuel like oil or other problems.

An emergency federal appropriation announced Feb. 18 provided $16.4 million in new LIHEAP funds to the state, which Suran said is being used to bump a household's potential crisis grant from $300 to $600.

In another bonus for the program, the new budget bill passed by Congress is expected to filter an additional $26.5 million in LIHEAP funds to Pennsylvania, on top of the original projection of $93.6 million. Suran said officials will determine soon how to make use of the additional money, including possible extension of the March 27 deadline to apply for aid.

The Dollar Energy Fund, supported by contributions from 13 utilities and their customers, provides separate grants of up to $400 to help people within 200 percent of the poverty limit. The eligibility limit is $17,184 for an individual and $35,304 for a family of four.

Through the winter, the program only accepts applications from those who have lost heat. Starting today, it begins helping anyone who is income eligible and needs help.

"Many of the people we're serving now are the new working-class poor, not people who have been on welfare for years," said Cindy Datig, Dollar Energy Fund executive director. "We're also seeing a new class of professionals who lost their jobs and need help."

The program relies on a network of 150 agencies that screen clients and process applications. Janet Kirik, a coordinator for the Elder-Ado senior services center in Mount Oliver, said people have begun contacting her about new heating bills $150 to $200 higher than what they've been accustomed to.

"I'm going to be swamped" next week with Dollar Energy Fund applications, she said.

Applicants for Dollar Energy Fund assistance should ask their utility to recommend an agency near them to contact and apply through.

Applicants for LIHEAP grants should contact their welfare assistance office or call the state's toll-free phone line: 1-866-857-7095.

Gary Rotstein can be reached at grotstein@post-gazette.com or 412-263-1255.

www.tribnet.com By BRAD FOSS, AP Business Writer

NEW YORK (February 28, 1:36 p.m. PST) - If history is any guide, consumers should brace for even higher gasoline prices, already above $2 a gallon in some places.

The wholesale price of gasoline has risen between March and May every year since 1985, according to an analysis by Cameron Hanover, an energy risk management firm based in New Canaan, Conn. Pump prices have tended to follow suit, statistics kept by the Energy Department show.

"We're expecting a further round of price increases at the retail level," said Jacob Bournazian, an analyst at the Energy Information Administration, the statistical arm of the Energy Department. "It could be anywhere from 4 to 8 cents."

The national average retail price for regular unleaded last week was $1.66 per gallon, 54 cents above year-ago levels.

The springtime pattern of rising gasoline prices coincides with the period when refiners shut down equipment, scrub it clean and switch from winter- to summer-grade fuel ahead of the peak driving season. That process, known in the industry as "turnaround," causes supplies to temporarily shrink and prices to rise.

Whether the 18-year seasonal trend is extended - or ended - in 2003 depends on factors ranging from a possible war in Iraq to the supply of fuel from Venezuela, whose oil industry strike has resulted in sharply reduced exports to the United States.

If U.S.-led military action against Iraq proceeds quickly and without any disruption in the flow of Middle East oil, analysts believe the price of crude, now close to $37 a barrel, could drop quickly, bringing today's high gasoline prices down, too.

"That could kill the (seasonal) trend," said Ed Silliere, an analyst at Energy Merchant LLC in New York. The ability of refiners in the United States, Europe and elsewhere to make up for the expected shortfall from Venezuela could also tip gasoline prices in one direction or the other, Silliere said.

Still, Silliere and other analysts said all signs point to the annual trend being magnified by geopolitics and the current supply-demand imbalance. Nationwide inventories of gasoline are nearly 3 percent below year ago levels with Venezuela's refineries running far below capacity, analysts said the situation could get worse.

Peter Beutel, president of Cameron Hanover, said the confluence of outside factors makes it difficult to predict what will happen in gasoline markets this spring, but his advice to clients in a recent report was this: Don't make large bets prices will fall.

"We have to ask ourselves if we want to fight this kinds of odds," he said.

In 16 out of the last 18 years, June gasoline futures trading on the New York Mercantile Exchange rose between March 1 and May 15. In 1993 and 1998, the June contract rose between March 1 and May 1, before falling two weeks later. Gasoline for April delivery was up 2 cents to $1.04 a gallon Friday on the Nymex.

The monthly average for retail prices, excluding taxes, was higher in May than in March in 15 out of the last 18 years. Pump prices declined slightly over that period in 1986, 1997 and 2000.

www.washingtonpost.com By Warren Brown Washington Post Staff Writer Friday, February 28, 2003; 12:54 PM

The threat of war in the Middle East is boosting gasoline prices in the United States. So is political instability in oil-producing Venezuela.

An unusually harsh winter in the Mid-Atlantic and Northeast isn't helping. Some analysts in the oil and auto industries say pump prices could rise as high as $2.50 a gallon for self-serve regular unleaded gasoline.

Nationally, today's average pump price for self-serve regular unleaded is $1.67 a gallon, a few fractions of a cent higher than it was Thursday, according to the American Automobile Association's "Daily Fuel Gauge Report."

But $1.67 is 54 cents higher than the per gallon average a year ago, the AAA says. District of Columbia consumers are paying an average $1.75 for regular unleaded gasoline, compared with an average pump price of $1.15 a gallon a year ago.

Prices are lower in Maryland and Virginia. But consumers in those places still are paying more money for a gallon of gasoline today than they did last year. For example, Maryland residents in the Washington metropolitan area are spending an average $1.70 per gallon of self-serve regular unleaded, compared with $1.15 a year ago.

Virginians are having a better time. For example, consumers in Richmond are paying an average $1.58 a gallon for self-serve regular unleaded, compared with $1.04 a gallon last year.

Media reports indicate that car shoppers are edgy over the gasoline price increases. That suggests that the nation's car manufacturers might be biting their nails, too.

They're not.

That doesn't mean the car companies are sanguine. All of them literally have war plans. But none of them seems close to pushing the panic button.

"The issue isn't how high gasoline prices go. It's how long they stay high," said Michael Morrissey, public policy spokesman for General Motors Corp.

"Consumers have gotten used to cyclical changes in gasoline prices. A family of four is not likely to go out today and buy a subcompact car just because gasoline prices are high," Morrissey said. "Most consumers don't buy cars on a whim. They make it a part of long-term family financial planning. That planning is affected by high gasoline prices only if those prices stay high," he said.

Auto manufacturers don't act on a whim, either, said George Pippas, chief sales and marketing forecaster for Ford Motor Co.

"Product planning is done many years in advance of demographic changes or other [factors], such as fluctuations in gasoline prices," said Pippas. A case in point, he said, are the new gasoline-electric hybrid vehicles that use fuel more economically than conventional cars.

Ford in mid-2004 will introduce a gasoline-electric version of its compact Ford Escape SUV. The 2003, four-wheel-drive version of that model, equipped with an automatic transmission, averages 23 miles per gallon in highway driving. The Escape Hybrid will get up to 40 miles per gallon, according to Ford officials.

"But we didn't start working on the Escape Hybrid because of the current spike in gasoline prices. We began developing that one three or so years ago," Pippas said.

"You can't just respond to a crisis. You have to be committed to providing more fuel-efficient vehicles because you believe that those are what the market will be demanding over the next decade or two," Pippas said.

At the moment, the U.S. market is awfully confusing. There is much ranting and raving against sport-utility vehicles. Yet, SUVs and other light trucks constitute 50.6 percent of current new-vehicle sales while car companies are having a hard time giving away cars that are more fuel efficient.

Honda Motor Co. and Toyota Motor Corp. are beating their breasts in self-praise because they were the first to market gas-electric hybrids-the Civic Hybrid and two-seat Insight for Honda and the Prius sedan for Toyota. Yet, both of those self-avowed environmentally friendly companies are raking in the cash by selling SUVs such as the full-size Toyota Sequoia, the Honda Pilot and the Acura MDX.

And look at GM. It grabbed lots of attention in January at the North American International Auto Show in Detroit by announcing that it will offer gas-electric hybrids across most of its vehicle lines between now and 2007. Yet, it also shocked environmental senses by bringing forth a conceptual super car-the 16-cylinder, 1,000-horsepower Cadillac 16.

Now, GM officials are suggesting that the Cadillac 16 was just an idea that will remain an idea. But they still are preparing a phalanx of new pickup trucks and SUVs to do battle with the Japan-based companies that are introducing new full-size pickup trucks and truck-based SUVs, such as the proposed Toyota Harrier SUV and the ready-for-market Nissan Titan pickup truck.

"The years in which truck sales far outpace demand for cars eventually will come to an end," said Pippas. "But I don't think that's going to happen over the next 10 years, and it certainly is not likely to happen because of current increases in gasoline prices," he said.

It will happen because baby boomers, currently the biggest buyers of SUVs, are getting older, Pippas said.

"Think about it," he said. "Can you see yourself climbing up into an SUV or pickup truck at 65? I can't. I want to get into something lower to the ground. So do a lot of people. That's why car-based SUVs are all the rage," he said.

www.coshoctontribune.com By KATHY THOMPSON Gannett News Service

CARY ASHBY/Tribune Robert Brown of Coshocton fills up his vehicle at Clark High Caliber Pit Stop on Chestnut Street. Regular unleaded gas prices around the state ranged from $1.54 per gallon to $1.74 Thursday. Pit Stop customers paid $1.62.

COSHOCTON -- They're heating up all across the country. Prices for gas and oil, that is.

Gas bills seem to have consumers coming and going these days with the cost of heating oil and crude oil rising quicker than temperatures.

The unfortunate fact is prices are probably not going to go down soon.

With Venezuela strikes and unrest in the Middle East, very few are actually "filling up" their tanks in their vehicles.

Heating homes is becoming more expensive with bills exceeding $100 to $300 more this year than last, according to the Energy Information Administration.

Heating oil prices rose 18.1 cents per gallon to their highest level in three years, reports the U.S. Energy Information Administration, or the EIA, the statistical arm of the U.S. Department of Energy.

That makes it $1.76 per gallon, more than 56 cents higher then last year.

According to Columbia Gas of Ohio, which has about 1.3 million customers throughout Ohio, the average bill could be more then $35 a month higher from February to April this year.

Ray Frank, a spokesperson for Columbia Gas, said consumers are getting hit with "three strikes at one time."

"What we have is colder weather, more consumption and higher prices," Frank said.

"We're having what we call colder degree days," Frank said. "That means we are at 5 percent colder this winter than a normal winter."

But, what is considered a normal winter has not hit this area for several years, which is why consumers are feeling the crunch, Frank said.

"We start our heating weather, as we call it, in November," Frank explained. "Starting in January, we usually have a few days a month or even more during a month, where the temperatures are warming up and we don't notice the cold so much. But, this winter, we really started getting cold in November and we've stayed cold. There's just been no letting up."

The result is higher demand on a market that is short in supply, Frank said.

"With the talk of war in Iraq, with the rush on the market for fuel, we're all in the same boat -- us, the gas stations, the other fuel companies, we're all hurting," Frank said.

Kno-Ho-Co-Ashland Community Action Commission has seen an increase in clients this winter who are in an emergency situation regarding their home heating bills.

"We've seen an increase of about 32 percent this winter," said John Flexter, a HEAP administrator.

"I think it's gas prices, the way the economy is and just the way the winter has gone that's affecting everyone," Flexter said. "This is a pretty normal winter for Ohio. For the past few years, we've had mild winters."

Flexter suggests turning the thermostat down, turning the hot water thermostat down to 120-125 degrees, and using low heat for gas dryers to save on home heating bills.

"Making sure the house is as closed up as possible can save money," Flexter said.

One thing consumers are encouraged to do to help offset costs is to shop around.

"We encourage customers to shop around the other gas companies," Frank said. "That is always a plus for them. Sometimes they can find much better deals if they just look."

Prices around the state ranged from $1.54 per gallon to $1.74.

According to a national survey by AAA, the national average price per gallon is $1.66, almost 54 cents above the national average this time last year.

AAA recorded the highest priced gasoline in California, with prices almost to the $2 mark. Prices in Kentucky and Virginia were recorded at some of the lowest at $1.58 per gallon, the survey showed.

J.D. Cunningham, an employee at Kwik-Fill in Coshocton, said prices at their station were low "most of the time."

"We had a special on Tuesday where we were at $1.66 a gallon," Cunningham said. "We've been pretty busy today, though."

No matter where the price for gas lands these days, some residents just are not happy with them.

"I haven't really heard anyone complain about the prices," Flexter said. "Well, I've been complaining. I've probably complained for most of them, myself. It's a shame where the prices are, but it looks like they may be here awhile."

kthompson@nncogannett.com 450-6764 Originally published Friday, February 28, 2003

www.record-eagle.com February 28, 2003 STAFF & WIRE REPORTS

      LANSING - Gov. Jennifer Granholm has issued an executive order telling state officials to conduct routine surveys of gasoline prices in Michigan and report any gas gouging to the attorney general.       In the executive order issued Thursday, Granholm directed the Michigan Department of Agriculture and Michigan Public Service Commission to work together monitoring gasoline prices. Granholm      "Less than two years ago, fears about national security resulted in what appeared to be price gouging by a small number of service stations," the governor said in a release.       "The anxiety felt by consumers in those difficult days has begun to reappear in recent weeks as gas prices have increased dramatically. Our state departments are doing their part to ensure that we are prepared to protect our citizens in times of uncertainty, and we need to pass this important legislation quickly to protect them in the future."       She was referring to bills that will be introduced by state Rep. Kathleen Law, D-Gibraltar, and Sen. Ray Basham, D-Taylor.       Their legislation would expressly ban the practice of price gouging during states of emergency declared by the governor. The law now contains no specific ban on gasoline price gouging.       The gouging ban will be no problem for Marathon Ashland Petroleum, said company spokesman Linda Casey. The company has a number of Speedway and Marathon stations in northwest Lower Michigan, including six Speedways in the Traverse City area.       "After 9/11 we locked down our prices to what were in effect at midnight of 9/10 and kept them there for over a month," Casey said. "We felt after 9/11 we had an obligation to do that. In Lexington, Ken., there is a state of emergency because of weather and our prices are on a lock down, so we have no problems with that."       While attorney general two years ago, Granholm took action against 48 service stations that had raised prices sharply in the days after the Sept. 11 attacks.       The stations were required to refund more than $100,000 in overcharges to consumers and to pay approximately $30,000 in civil penalties to the state, Granholm said. Two of the stations she was referring to were the Old Sportsman's General Store north of Petoskey and the 4 Corner Market and Duke's Old World Deli Too in the Petoskey area. Efforts to reach owners of the stations for comment were unsuccessful.       The governor said the American Automobile Association has said that recent increases in gasoline prices are not justified. While she acknowledged that prices have been volatile in part because of uncertainty over war in Iraq and a slowdown in oil imports from Venezuela, she said they still bear watching.       "Our goal today is twofold: To help consumers get information that will allow them to pay the lowest possible price for gasoline, and to assure consumers and retailers that we are watching the price of gas closely," she said.       In addition to forwarding potential unfair pricing practices to Attorney General Mike Cox for possible action, Granholm also has directed the Department of Agriculture to establish a system to give consumers information about gas prices.       Gov. Jennifer Granholm, www.michigan.gov Attorney General Mike Cox, www.michigan.gov

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