ogj.pennnet.com Maureen Lorenzetti Washington Editor

WASHINGTON, DC, Feb. 27 -- Allegations of price-gouging in energy markets may be based on frustration, not facts, Senate Energy Chairman Pete Domenici (R-NM) said Wednesday.

Natural gas and crude oil prices have soared in the past few weeks, the lawmaker acknowledged, but the sudden increases likely are market-related, Domenici said.

"This week, wholesale natural gas prices jumped 38% in 1 day. The spot markets jumped even higher. Wholesale natural gas prices are at $7.15/MMbtu. Crude oil is trading at $37/bbl," he said. But, he added, "We've been down this road before. We were here 2 years ago. Prices were just as high, driven by rising demand and tight supply."

And this time around, it's a good bet that the same market forces are at work, Domenici said.

Congressional concerns Some legislators, particularly those from large energy-consuming states such as New York and California, voiced concerns that fuel suppliers may be taking advantage of a jittery market spooked by a series of seemingly daily geopolitical crises among the world's larger oil exporters: lingering strikes in Venezuela, growing unrest in Nigeria, and possible military action in Iraq.

Sen. Charles Schumer (D-NY), a vocal critic of the Bush administration's energy policies, wants the Federal Trade Commission to investigate whether consumers are being gouged for their purchases of heating fuel and gasoline. He also called on the White House to release oil from the Strategic Petroleum Reserve to help bring prices down.

"Having but not using the SPR is like having an ace in the hole and saying you're not going to play the card," Schumer said. "This is no longer a partisan issue. Republicans in Congress just joined me in the call to open the reserves. The Bush administration must take action now to reduce gas prices for consumers before the economy goes over the edge.''

Responding to Schumer and a growing chorus of East and West Coast lawmakers, Domenici urged "caution and careful consideration" before making such allegations. He added that federal regulators are monitoring the situation and so far have not found evidence to suggest manipulation. The New Mexico lawmakers also concurred with the White House that the SPR should be used only for sudden supply shocks (OGJ Online, Feb. 26, 2003).

"I understand the frustration and anxiety that prompts allegations of gouging and price-fixing. The natural gas market has been deregulated and is a free market," he said. "The Commodity Futures Trading Commission continues to monitor the market for manipulation. Meanwhile, the Federal Energy Regulatory Commission is taking action to ensure the integrity of gas price reporting to ensure consumers have accurate market information. These actions are responsible and prudent."

Domestic production needed One way to avoid future price spikes would be to produce more domestic energy, he suggested, echoing comments made by Sec. of Energy Spencer Abraham before the committee earlier in the week.

"Insufficient production is our core problem; allegations and rumors are just a temporary distraction. If we want to stabilize energy prices, we must produce more energy," he said.

The White House and Republican leaders say that to encourage domestic production, Congress should this year pass a comprehensive energy bill.

"If we don't, we will visit this scenario again and again. The use of natural gas in the production of electricity in this country is expected to double in the next several years. Virtually every power plant we're building relies on natural gas. That means these crises in supply and price will only get worse if we don't act swiftly and decisively.

"I am committed to passing a comprehensive energy bill that will provide affordable, reliable, and clean energy for all Americans. At the very least, we must give the president an energy bill that will increase our own domestic production," Domenici said.

www.heraldtribune.com The Associated Press

When weather forecasters call for ice and snow, Randy Hayes knows he will be busy. Hayes, a delivery driver for Quality Oil Co., Hayes crisscrossed southern Winston-Salem on Wednesday, topping off tanks with home heating oil. "We're just like the grocery store," he said. "Whenever there's going to be bad weather, we get a lot of business." As with other petroleum products, the price of heating oil has risen dramatically in recent months. According to the U.S. Department of Energy, the average price in North Carolina was $1.52 a gallon, a 49 percent jump from a year ago and a new high for the state. The increased cost for oil has strained household budgets, especially for those living on fixed incomes. "I just get Social Security," said Betty Robbins, who had her tank filled by Hayes. "I've spent a lot more on oil this winter because of the storms, and the price just keeps going up." Officials said that the increase is the result of higher demand for fuel oil during the unusually harsh winter, a prolonged strike in Venezuela and uncertainty about war in Iraq. The high cost of oil has drained the resources of agencies that help those who can't pay their heating bills. "We're helping as many people as we can," said Jim Campbell, the emergency-assistance coordinator for the Forsyth County Department of Social Services. "We're getting about twice as many calls as last year." Campbell said that during a cold week, his office has processed about 120 applications for heating assistance each day. Because of increased fuel costs, the department can only afford to pay for about 100 gallons of heating oil or kerosene for each family, roughly a one-month supply. Information from: Winston-Salem Journal

ydr.com By SEAN ADKINS Daily Record staff Thursday, February 27, 2003

Increased demand for natural gas brought on by frigid temperatures and an unstable open market are to blame for a Columbia Gas price jump.

Officials with Columbia Gas will spend the next month hammering out an increased price gas cost adjustment that will go into effect April 1, said Robert Boulware, company spokesman.

Since January, hits ranging from the threat of a U.S.-led war with Iraq to labor strikes in Venezuela have increased prices on the oil used to heat homes and businesses. When businesses and homeowners switch to avoid those higher prices, natural gas prices rise.

Compared to last winter, consumers on a national level will pay 28 percent more for natural gas and an additional 52 percent for home heating oil, according to the Energy Information Administration.

While Columbia Gas officials could not provide an exact number or percentage for the increase, the company will submit its quarterly adjustment to the Pennsylvania Public Utility Commission on or before March 31.

That price adjustment will extend into June when the company will review prices on the open market.

Columbia Gas supplies its customers with natural gas from storage and fuel bought on the open gas market, Boulware said.

“At this point, production is not keeping up with demand,” he said. “This price increase is a direct pass-through from the market to the customer.”

The company serves about 82,000 customers in York County, 12,000 customers in Adams County and 100 in Franklin County.

Like Columbia Gas, Shipley Energy has been forced to face a harsh winter marred by a high demand for natural gas and home heating oil.

Since January, the company has experienced a nickel increase per week per gallon of home heating fuel, said Robert Iosue, vice president of marketing for the company.

Shipley Energy customers who heat their homes with oil have paid 50 percent more this year than last winter for their fuel, he said. For example, a fuel oil bill that was $100 last winter now hovers around $150.

“It’s just going through the roof,” Iosue said.

While natural gas prices are about three times what they were last year and the highest since 2001, customers can expect those jumps to level off as the weather improves.

Typically, a drop in natural gas demand occurs in the spring and summer and allows for the replenishing of reserves, Iosue said.

While the natural gas market is expected to improve, the gasoline market is still riding the wave of uncertainty.

For the last week, gasoline prices at Rutter’s Farm Stores have been jumping 2 to 3 cents only to slide back to a flat level within 24 hours, said Scott E. Hartman, president of the company.

“If we go to war, then prices will go up in the short term,” he said. “If the war is short, prices should drop significantly.”

Reach Sean Adkins at 771-2047 or sadkins@ydr.com.

www.theithacajournal.com

WASHINGTON -- Warning that New York gas prices could jump to at least $1.90 a gallon by spring, Sen. Charles Schumer on Wednesday renewed his call for the Federal Trade Commission to investigate the possibility of price gouging across the country.

"We are about to go to war and the last thing we need is unnecessarily high gas prices," Schumer said.

New York motorists were paying on average $1.76 a gallon Wednesday compared with $1.22 per gallon on the same date a year ago -- an increase of 44 percent, according to the American Automobile Association. Schumer said experts tell him that gas prices could jump another 10 to 15 cents by April mainly because of crude prices hitting an all-time high of $36 per barrel Tuesday.

The huge jump in gasoline prices, especially the rapid increase in the last month, has alarmed lawmakers and consumer groups. Most of the price spike is attributed to fears of war with Iraq and an oil strike in Venezuela, one of the top four sources of oil exports to the United States. But some lawmakers and consumer advocates, including Schumer and the AAA, don't rule out the possibility of price manipulation at the pump.

Schumer wrote to FTC Chairman Timothy Muris this month, calling for a comprehensive investigation into gas pricing. As of Wednesday, Muris had not replied.

www.democratandchronicle.com By Todd Grady Democrat and Chronicle AIMEE K. WILES

Tom Sadler, a driver for Bisig Oil Corp., fills a city heating oil customer’s fuel tank earlier this week. The per-gallon cost of oil for Bisig customers has jumped from $1.05 in October to about $1.50.

(February 27, 2003) — Unusually cold weather and rapidly rising energy costs have combined to create monstrous heating bills for many local residents. Karina Barker of Ionia, Ontario County, said she has had to cut corners on the family budget in order to afford the propane heating bill for her home. “It’s hurting pretty badly,” Barker said. “We’ve had to completely rethink how we purchase groceries and other consumables.” The Barkers’ budget payment to heat less than 2,000 square feet of space has jumped this heating season from $93 to $241. Laron Hagan, a single parent of five, said monthly natural gas heating bills for the Rochester home he rents are nearly double what they were last year. “The bills are very high, they’re unbearable,” said Hagan, who is on injury leave from auto parts manufacturer Valeo Electrical Systems Inc. “I’ve been struggling with the amount to pay the bills.” Those whose homes are heated with oil also are feeling the pinch, as are drivers at the gasoline pump, where prices hit a local record last week. Skyrocketing energy prices are blamed on a number of factors. They include rising commodity prices for oil and natural gas, oil supply disruptions caused by a strike in Venezuela, a 28-year low in U.S. oil supplies and the growing likelihood of war in Iraq. Wednesday, the March contract price for natural gas on the New York Mercantile Exchange closed at $9.13 per million British thermal units, up $2.52 this week. The price of a barrel of oil for April delivery closed at $37.70, up $16.41 from a year ago. It’s the highest close since Oct. 16, 1990. Sen. Charles Schumer, D-N.Y., released a forecast Wednesday showing that Rochester and Finger Lakes-area residents would pay $855 more this year for gasoline and home heating oil. Schumer repeated his request that President Bush authorize release of oil from the nation’s reserve, which the administration has said it will do only to offset supply disruptions, not to bring down prices. The rising prices have many people seeking help to pay their bills. “People were managing as best they could,” said Florence Wawrzyniak, coordinator of the Red Cross/RG&E Heating Fund. “But now that we’re into the real cold weather that we’ve had in the last three to six weeks, we are seeing more individuals who probably would really never want to call us.” The fund has allocated more than 160 grants totaling more than $69,000 this heating season. “People are maxed out on these bills and the prices are continuing higher,” said Jim Bisig, co-owner of Bisig Oil Corp. in Greece. The per-gallon cost of oil for Bisig customers has jumped from $1.05 in October to about $1.50. RG&E did not release a heating forecast this season, but customers know bills are higher than last year’s. The utility delivers natural gas to about 296,000 customers. Galen Parker of Greece said he has never had a utility bill over $300 until now. Parker, an RG&E customer who heats his home with natural gas and uses a setback thermostat, called the situation “outrageous.” For some, their bills are a reminder of two years ago, when the price of natural gas soared to records because of high demand. That year, RG&E’s average residential customer, who used 745 therms of gas, paid $787.78 between November and March. Last year, the average residential customer used 604 therms and paid $536.55. It is uncertain what the final tab will be for this heating season, which ends in March. E-mail address: tgrady@DemocratandChronicle.com