January’s banana-belt temperatures have taken the sting out of chilling heating bills, with utility customers perhaps having weathered the worst that winter can dish out.
Winter heating bills typically reach their apex in January. But this month’s costs for Xcel Energy customers are likely to be lower than December’s record highs, despite the snowstorm and cool temperatures of the past few days.
The outlook is even better for February because typically warmer temperatures for the month will be bolstered by a drop in natural-gas costs.
Utilities and energy experts had warned last fall that sharp increases in natural-gas prices would lead to heating bills far higher than customers had ever seen. But because temperatures nationwide have been warmer than average, demand for gas was lower than expected and prices didn’t rise as high as forecast.
However, advocates for low-income energy assistance note that despite the warmer weather, this winter still has been the worst on record for heating bills.
“The way I look at it, the low income are being hung with a 1 1/2-inch rope instead of a 2-inch rope,” said energy analyst John Harpole of Mercator Energy, who also serves on the board of the assistance agency Energy Outreach Colorado. “It’s still a horrendous situation.”
But January’s lower bills may help mitigate the hardship for low-income households and give middle-class families a breather from increasingly oppressive utility bills.
Xcel last month had forecast January heating bills for a typical Colorado home of $183, the highest in history. But unusually warm weather in the first half of January has brought that projection down.
Xcel now estimates that January bills will be $145 if weather remains warmer than average, or $161 if the remainder of the month has typical temperatures.
Either way, January’s bills would be lower than December’s average of $169. Those bill estimates reflect natural-gas consumption, excluding franchise fees and taxes, and do not include charges for electricity.
“I don’t know if we’ve already seen the worst, but I sure hope so because it’s been a tough winter for heating bills,” said Denver barber Gil Navarro.
The bill he received last week was a combined $249 for gas and electric – far higher than last January’s charge of $134.
But most of his current bill was for December heating and didn’t reflect January’s unusually warm weather.
“It gives me hope that things will ease up a little when I see days like this,” Navarro said Wednesday, when Denver’s high was a balmy 63 degrees, just 2 degrees short of a record for that date.
If Navarro’s February bill shows the beneficial effect of warm January days, he said he plans to put some of the savings into a special fund reserved for future bills.
“You never know when we might get another blast of cold weather,” he said.
Navarro, like many other utility customers, had girded for sharply higher winter bills.
Energy analysts last fall had predicted that winter natural-gas prices might reach as high as $15 to $20 per 1,000 cubic feet, shattering all previous records. The reason was higher demand for gas – both in the U.S. and worldwide – and flat domestic production of gas.
Indeed, heating bills have been the highest ever to hit customers. But the damage could have been far worse.
Natural-gas prices have eased from the earlier extreme projections because of warmer than-normal weather across the nation.
Here’s why: When temperatures are warm, homeowners use less natural gas. With lower demand, natural-gas producers and utilities must put gas into underground storage caverns instead of sending it to customers. As supplies of stored gas build, prices come down.
Natural-gas prices last week hit the lowest level in five months after climbing to record highs in December. On Friday, gas for February delivery was trading at $9.28 on the New York Mercantile Exchange. Yet that price is still 47 percent higher than last year at this time.
Along the Front Range, January may go down as one of the warmest on record barring a cold snap in the last 10 days of the month, said forecaster Jim Kalina of the National Weather Service office in Boulder.
Through Friday, metro Denver had seen 13 days of temperatures above 50 degrees in January and seven days above 60 degrees.
“Mother Nature has helped us out a little with warm weather,” Harpole said. “But it’s still a bad situation. We’re really just jumping out of the frying pan and into the fire.”
Staff writer Steve Raabe can be reached at 303-820-1948 or sraabe@denverpost.com.
