INDIANAPOLIS – Citizens Gas projected today that rising wholesale natural gas prices will increase customer bills in May and more increases are likely in the months ahead.

Citizens Gas projected that the typical residential heating bill will increase about $3.50 in May (billed in June) compared to a year ago. Assuming normal weather, the utility projected that the typical residential heating bill for May would be about $46.50 for 30 therms. During May 2007, the typical bill was about $43 for 30 therms. Last month, the typical bill was about $79.50 for 60 therms.

The projections are part of the utility's monthly Gas Cost Adjustment (GCA) filing with the IURC. Citizens Gas makes the filings to account for changes in the price of gas it purchases for its customers. The cost of natural gas makes up about three-fourths of a customer's bill with the remaining fourth being delivery costs. In accordance with state law, Citizens Gas passes on the cost of natural gas to customers on a dollar-for-dollar basis.

Wholesale natural gas prices have risen more than 20 percent since the beginning of the year and more than 50 percent since last September, according to the New York Mercantile Exchange. Natural gas prices are rising because of increased demand for this clean-burning, high performing fuel and flat natural gas production levels impacted by federal restrictions on energy development.

“Given ongoing increases in natural gas prices, we urge customers to take steps now to weatherize their homes. We also suggest customers sign up for the Budget Plan, which divides a customer's annual gas bill into 12 equal monthly payments,” explained Greg Sawyers, Director of Customer Services at Citizens Gas.

Customers are encouraged to go to www.CitizensEnergySavers.com for a full range of energy saving tools, including the Citizens Home Energy Advisor, which provides a list of energy saving suggestions through a free online energy audit.

To help minimize the impact of sudden changes in wholesale natural gas prices, Citizens Gas utilizes a hedging strategy to purchase most of its gas supply during periods of low demand. Citizens Gas also stores gas in underground storage fields during the summer for use during the winter. Last summer the utility initiated the Indiana Municipal Gas Purchasing Authority to make an advance purchase of gas that will save Citizens Gas customers $24 million over the next 15 years.

Citizens Gas' rates are among the bottom third of gas companies operating in Indiana, according to figures compiled by the IURC.

Average Residential Heating Bill Comparisons Projections Assume Normal Weather

About Citizens Gas
Citizens Gas & Coke Utility is a Public Charitable Trust providing efficient and reliable energy services to more than 266,000 customers in and around Marion County. The Public Charitable Trust means the utility is managed only for the benefit of customers and the community.

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