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Heating should cost less this year

Heating your home should cost less this winter. The average price of natural gas is expected to be about 15 percent lower than it was last year. Eric Schlacks, city gas and energy coordinator, says other heating fuels generally follow the same tr...

Heating your home should cost less this winter.
  The average price of natural gas is expected to be about 15 percent lower than it was last year. Eric Schlacks, city gas and energy coordinator, says other heating fuels generally follow the same trend, because they are subject to the same market forces.
Typically, companies will start putting natural gas in storage once winter ends. And with the moderate climate this past summer, the demand remained low.
"This year, not a lot of electric generation was needed, so prices started coming down," Schlacks said. "Utilities took advantage of that to put natural gas in storage."
Storage facilities are full right now, and that puts a downward pressure on natural gas prices in the marketplace.
"We have to purchase our natural gas in the marketplace like everyone else," Schlacks said. "The futures for those exchanges are down. Based on that we believe the prices will decline. That doesn't mean they won't change. The market is constantly changing based on supply and demand and any of those things that impact a free market."
Schlacks expects the average price to run a natural gas furnace for one hour this winter will be 77 cents. Last year the average price was 88 cents. Over the course of the winter heating season, it will cost about $880 for heat and other natural gas appliances.
Last year it was closer to $1,000.
If the price of heating oil also drops 15 percent, an oil burning furnace will cost about 85 cents an hour this winter, or about $1,000 for the year.
Saginaw Stoveworks, one of the area's leading sellers of wood burning furnaces is doing a brisk business. Owner Keith Merniki says it's been busy.
"It's been nuts," he said. "I just sold the last outdoor wood furnace that I have."
Meriniki says he has sold 72 outdoor wood furnaces this fall and more than 150 indoor fireplaces. Many of his customers say they want to be free of the market forces that dictate the price of oil and gas.
The Arrowhead Economic Opportunity Agency, which handles the area's heating assistance program, is also busy these days. The weakening economy and closed mining operations on the range have taken a toll on area incomes. More than 500 people every week are coming in to apply for the heating assistance program, which pays a percentage of a homeowner's monthly heating bills.
"Our workload is at least the same as it was last year," said Faye Meador, office manager. "Because of the layoffs we may be seeing different people than we have in previous years, but the need is always there."
The federally funded program is based in Virginia and handles heating assistance needs in St. Louis, Lake and Cook counties. Director Val Strukel says they currently have $2,233,013 available for the region. That money can be used for heating assistance, furnace repairs and home weatherization projects. Last year's total disbursement was $4,911,391.97.
Strukel says it looks like they're right in line to meet the same disbursement as last year.
"... We've processed just under 3,000 applications so far this year," Strukel said. "Last year through May we did 8,600. After the first of the year, towards February, we'll be close to out of money. (President George) Bush is going to have to look at releasing more funds."
A $300,000,000 contigency fund is available for winter heating assistance emergencies. Sen. Paul Wellstone, DFL-Minn., is already laying the groundwork for pressuring the administration to release some of that fund.
"Minnesota is a cold-weather state, and especially in the northern part of Minnesota, we are already feeling the onset of winter," Wellstone said at a recent Senate hearing. "At the same time, families are also beginning to feel the economic impact of airline layoffs and their ripple effects throughout our state. Our economy is sliding into an economic recession that is going to make it even more difficult for thousands of working families and senior citizens to pay high heating bills that are on the way."
In July, the Senate passed a $300 million supplemental appropriation that was double the amount the President requested. Low Income Home Energy Assistance Program (LIHEAP) is the primary federal program available to help needy households pay their home energy bills.
In recent years, the need for LIHEAP assistance has grown rapidly. Nationally, five million households received assistance last winter, an increase of 1.1 million.
To apply for heating assistance, the Arrowhead Economic Opportunity Agency has offices in Duluth, Hermantown and Virginia. Applicants can simply stop by for an application or phone ahead to make an appointment at the Hermantown office. Applications can also be processed through the mail. Call 624-7625 for more information.

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