Winter heating costs on the rise? Officials say no

Gas prices have given consumers quite a ride in the past six years. The last time gasoline prices dropped below $1.50, as they are today, was in early 2004. Graph created by IowaStateGasPrices.com of GasBuddy.com. [Click to enlarge]

Local energy suppliers say residents will not see an increase in cost to heat their homes this winter.

Gasoline and diesel along with propane and natural gas prices have fallen considerably in the last couple of months.

"For natural gas customers we are projecting the same heating costs as last winter," said Mark Reinders, MidAmerican Energy, communications manager.

"For electric customers they are not seeing any changes in rates," he said. "We haven't changed those since 1995."

Scott Vreeman, owner of Siouxland Propane, in Ireton, said his contracted customers will be paying a higher rate than those who are buying now.

"We, like most dealers, bought gas when crude oil was $140. We bought then to protect those customers, so most of them are locked in at the higher price until the April time frame," Vreeman said.

The remaining 70 percent of their customers, who are buying now, are enjoying a $50 per barrell break, he said.

Both companies purchase natural gas and propane in advance to protect their contract customers from the peaks and lows of energy costs throughout the year.

"We can guarantee customers at this point they will have lower propane prices next year," Vreeman said. "We can buy ahead now for next year."

Reinders said natural gas prices have in the last 10 years gone up a little each year and it's anybody's guess what they will do in the future.

"This is the first year it has stayed fairly stable or gone down slightly," Reinders said. "The economy would be a major factor. Producers did not suffer hurricane disasters as they have in the past."

Usually the price of propane is lower in the beginning months of the year, which is why Vreeman and other dealers purchased during those months, but at this point they don't know if that will remain the case.

"The energies have never dropped this fast in history," Vreeman said. "With the uncertainty of the economy and the energies, you hardly give out advice."

Reinders said there are factors that could increase heating costs of natural gas users should their usage surpass that of last year due to weather conditions.

"If the winter is just arctic cold, you will use a lot more natural gas to heat your home," Reinders said. "No. 1 you will be using a lot of gas to heat your home and No. 2 that is going to affect cost."

Vreeman said propane, diesel and natural gas are reflect the cost of crude oil because they are also energy commodities.

"If you're seeing gasoline go down, you are going to see propane, diesel and natural gas go down," Vreeman said. "Not necessarily at the same rate though."