NATION'S NATURAL GAS USERS SHIVERING OVER HIGH PRICES

Soaring demand, low inventories and expected colder weather will keep natural gas and heating-oil prices high through the winter, government and industry economists told a U.S. Senate hearing in Washington Tuesday.

That's bad news for all natural gas users, but especially for people like Beverly Breese of Cape Girardeau. She struggles on a fixed income to provide for herself and her disabled 93-year-old mother. They get by on their Social Security checks and her mother's small pension.

"I really think it is uncalled for," Breese, 73, said of skyrocketing natural gas bills. Breese uses natural gas for heating and cooking in her mobile home.

Breese said she expects to pay at least $120 a month for gas this winter. She blames the oil companies for the high prices.

"I don't mind anybody making a profit, but come on, let's not gouge," she said.

AmerenUE has 106,000 commercial and residential natural gas customers in Missouri, including 19,400 in Cape Girardeau, Stoddard and Scott counties, and another 2,000 in Butler and Bollinger counties and the city of Advance.

AmerenUE spokesman Mike Cleary said the average, monthly residential bill is expected to climb by $33, from $66 to $99. But Cleary said that figure doesn't include the addition of local taxes, which vary by location.

Cleary said the higher bills reflect the rise in wholesale gas costs. AmerenUE, he said, has tried to keep its costs in check, in part by drawing upon lower-priced gas it has in storage.

Some areas worse

The Energy Department estimated that heating bills for natural gas consumers even with normal winter weather will be 50 percent higher this winter than last. Some parts of the country, such as California, are likely to have even steeper increases.

"Volatile (natural) gas prices will prevail until significantly more gas supplies enter the market," Mark Mazur, head of the Energy Information Administration, told a hearing of the Senate Energy and Natural Resources Committee.

Mazur said nationwide natural gas inventories are 14 percent below the five-year average and demand is expected to be higher than during the last two winters, when the weather was unusually mild.

As a blizzard moved into the Midwest and amid forecasts of colder weather across the country, natural gas wholesale prices for January delivery soared this week to $9.41 per thousand cubic feet, nearly four times higher than what it cost last winter.

Mazur said EIA estimates that wholesale gas prices will average $5.60 per thousand cubic feet for the October-to-March period, a little over twice as high as last winter. Mazur acknowledged prices could go higher if the winter turns unusually cold.

"We are drawing down gas reserves faster than we are replacing them with new discoveries," complained Sen. Frank Murkowski, R-Alaska.

While spot prices for natural gas have soared in some cases by as much as 400 percent, industry representatives said some of those increases will not be passed on to customers -- at last in the short term.

Most residential and commercial users are locked into medium- or long-term contracts that will cushion the impact at least this winter, said Roger Cooper, executive director vice president of the American Gas Association.

Calls for assistance

Nevertheless, state energy officials predict some of the elderly may have to choose between heating their homes and eating.

"The country is in an energy crisis," Deborah Schachter, speaking on behalf of the National Association of State Energy Officials, told the senators.

Schachter, head of the state energy office in New Hampshire, called on Congress to expand the low-income energy assistance program and for the Clinton administration to release the $155 million remaining in the current energy assistance contingency fund.