Winter's chill: Utah families feel effects of rising fuel costs

The first hint of bad news will arrive in Elva Amodt's mailbox in mid-December — a bill from Questar that reflects natural gas rate hikes and the season's first frigid temperatures. Like other Utahns, Amodt will probably wince, turn down the thermostat another few degrees and try to figure out other strategies for the chilly winter ahead.

The heating bill forecast — a 38 percent increase over last winter's prices — will affect 95 percent of Utah households, the 800,000 homes that use natural gas to keep warm.

For Amodt, that will mean an additional $30 or $40 a month. For homeowners like Jim and Tammy Engebretsen, the increase will probably be more than $100 a month, bringing their monthly winter bills up to as much as $500.

With snow on the ground in some places as well as the horizon, the Deseret Morning News today begins a periodic look at how Utahns cope with their heating bills. We'll follow three families throughout the winter to see how much they're paying, how anxious they're feeling and what they're doing to cut down on costs.

Natural gas prices have risen along with oil and gasoline prices in recent months.

"It's simple economics," Questar spokesman Chad Jones said. "Tight supply and high demand. And the hurricanes exacerbated that."

Natural gas molecules from Wyoming don't actually flow to the Gulf Coast, Jones says, "but a gas distributor from the East Coast may buy Wyoming gas, so it equalizes the price across the country."

Other factors also affect prices, he says. "For natural gas, weather is the wild card."

When gas prices rise, Questar passes this increase along to customers, with no markup. Questar was granted a 14.4 percent rate increase effective in June and another 20.3 percent increase as of Nov. 1. To that add another 3.2 percent that reflects the expiration of a previous gas-processing refund offered to customers.

If Questar has overestimated the cost of natural gas for a 12-month period, prices are lowered in a subsequent rate period, Jones says.

In 2001, rates increased 40 percent, then fell 27.6 percent before rising again in 2003. Rates have fluctuated similarly since 1988, with a total increase of 137 percent, according to Questar data. That's an increase of 2.3 percent when heating bills are figured as percent of household income, according to the gas company.

So, how will all this affect individual Utahns?