COUNCIL BLUFFS, Iowa (AP) -- High gasoline prices could be just the start, with soaring natural gas prices expected this winter, utility officials said.
Matt Reinders, a spokesman for MidAmerican Energy, said trading prices for natural gas on the New York Mercantile Exchange last week for November through February were 58 percent higher than a year ago. September prices were 73 percent above a year ago.
"That's just a snapshot" of one day's trading, Reinders said.
MidAmerican, which serves more than 680,000 natural gas customers from Sioux Falls, S.D., to the Quad Cities, charges what it pays for natural gas, plus a distribution charge, he said. If the company pays more, so will its customers.
The eventual price increase to consumers will depend on how much is locked up in advance at lower contract prices, he said. Weather also will affect the cost.
"When there's a cold snap, the demand increases, and that's what really spikes up the prices," Reinders said.
Aquila Inc. spokesman Matt O'Reilly said he didn't have projections that far in advance, but August costs are about 12 percent higher than last year.
He said Aquila, which serves natural gas customers in Iowa and six other states, has been buying natural gas for the winter using a portfolio approach that fixes prices and stores natural gas to avoid winter price peaks.
He said trading prices can vary greatly from the price paid by consumers and determining what consumers will pay this winter would be pure speculation.
"We can't predict what it's going to do this winter," O'Reilly said.
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Ernie Goss, a Creighton University economist, said high natural gas prices are a concern. Continued over a long period, they could lead to an economic slowdown, he said.
On the Net: MidAmerican Energy: http://www.midamericanenergy.com/
Aquila: http://www.aquila.com/
Information from: The Daily Nonpareil, http://www.nonpareilonline.com
AP-CS-08-17-05 1229EDTSioux City Journal
