Natural gas costs to increase, which will cause jump in heating bills

UGI Central Penn Gas announced an increase in its purchased gas cost rates, effective on Wednesday, that will increase an average residential heating bill by 6.8 percent.

For an average residential customer, it means a jump from $80.50 per month to $86 per month, according to UGI.

Paul Szykman, UGI’s vice president of rates, said in a statement that UGI’s residential heating bills remain lower than in recent years thanks to locally produced shale gas, which constitutes about 90 percent of the company’s natural gas supply.

Utilities are required by law to pass the cost of the natural gas they purchase directly through to customers without any markup. UGI Central Penn Gas, which serves about 85,000 customers across 35 counties in eastern and central Pennsylvania, says customers on limited or fixed incomes can call 800-652-0550 to determine if they’re eligible for one of several energy assistance programs.

According to the U.S. Energy Information Administration, natural gas prices are expected to increase in 2017 and 2018 after they fell to their lowest rates in nearly 20 years. Though CNBC reported in October that natural gas prices were up by about 43 percent for 2016.

In Pennsylvania, the average residential natural gas price was $10.56 per 1,000 cubic feet as of November 2016, according to the EIA.

While more homeowners are opting for electricity in heating their homes, more than half of U.S. households use natural gas, a trend that has persisted for most of the past century. After the conclusion of World War II, U.S. residential natural gas consumption more than tripled within the next decade, according to EIA data. Since then, consumption has more than doubled.

Production, meanwhile, lagged behind consumption rates in 2015 and 2016, the EIA reported. The trend is projected to continue in 2017 and 2018.

Roger Van Scyoc: 814-231-4698, @rogervanscy