Governors focus on rising heating prices

Posted: Monday, September 18, 2000

COLUMBUS, Ohio (AP) -- A one-day summit here involving Alaska Gov. Tony Knowles will address natural gas issues as consumers around the country are facing a long winter of high heating bills.

Knowles hopes the meeting with Ohio Gov. Bob Taft and other officials Wednesday will advance a proposal to ship gas south from the North Slope.

Ohio is a heavy consumer of natural gas, while Alaska is potentially a large producer.

''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.''

The one-day summit brings together several of the country's largest producers, suppliers and regulators of natural gas.

The event in downtown Columbus is meant to help governors understand the natural gas marketplace and help them develop their own plans.

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,'' said Taft, the Ohio governor. ''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 wholesale price in the fall has been about $2 per thousand cubic feet in recent years. But now it's over $5.

The Department of Energy has predicted that, on average, consumers will see about a 25 percent increase in their bills this winter. And there could be shortages.

''If we have a mild winter, we'll be fine,'' said Jerry Jordan of the Columbus-based Independent Petroleum Association of America. ''If we have a cold winter, we could have serious problems.''

Electric utilities are increasingly turning to natural gas for generating plants to avoid pollution problems with coal and other fuels. That's contributing to the current price increase and the possibility of a long-term shortage.

In Ohio, 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 generate power only at times of peak demand.

In New York, a state board has approved a proposal for a $500 million natural gas-fired 1,080-megawatt plant.

Several states are already seeing the effects of the gas price increase and are trying to react:

--In Indiana, state 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

--In Oregon, Northwest Natural Gas Co. asked regulators for a 28 percent rate increase for its 470,000 Oregon customers, blaming rising wholesale energy prices.

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