CHICAGO, March 5 (UPI) -- Midwesterners love March when the days of winter grow short but this year most homeowners and renters are in for a shock when April natural gas bills arrive.
Utilities have been warning for weeks that a spike in natural gas prices could double bills just weeks before spring.
Peoples Gas, which serves the Chicago area, said the cost per therm is up 15 cents this month, from 51 cents in February to about 69 cents. Things are worse for Nicor customers in the northern suburbs. The cost of a therm is up 18 cents to 83 cents.
Similar price hikes are occurring in Minnesota and Indiana. CenterPoint Energy Minnegasco, Minnesota's largest natural gas supplier has raised rates 43 percent, according to the Minneapolis Star Tribune.
Bills for residential service are expected to double. The March price hit $1.05 per therm, nearly double the 53 cents a therm last March.
Even though 90 percent of U.S. natural gas is produced domestically, officials blame the long winter and geopolitical tensions including possible war with Iraq for supercharging energy markets. Many industries that used fuel oil switched to natural gas when it was cheaper causing greater demand on supplies that are about 48 percent below levels last March.
Chemical companies were particularly vulnerable to natural gas price hikes because gas is used both as raw material for products and to heat furnaces and plants.
"What has happened is that the industry is facing a persistent supply problem," Bill O'Grady, vice president of futures research at A.G. Edwards told the St. Louis Post Dispatch earlier this week. "We have found all the easy, cheap gas, and we have reduced supplies."
At the National Manufacturing Week convention in Chicago, Doug Pertz, chairman, president and chief executive officer of IMC Global of Lake Forest, Ill., said his natural gas costs had tripled in recent weeks, forcing his company to shut down 45 percent of production last week.
"We can't determine the price of our goods going forward," he said.
The problem is nationwide from California to Alabama.
Sen. Dianne Feinstein, D-Calif., Monday asked the Commodity Futures Trading Commission and the Federal Energy Regulatory Commission to investigate possible price gouging.
"While cold weather, stronger heating demand and below-average petroleum and natural gas inventories affect market developments, I believe the CFTC has an obligation to examine trading on over-the counter platforms and other bilateral trade that play a role in price discovery," Feinstein wrote.
