Heating Bills Rise with Natural Gas Costs

Californians will face a budgetary pinch to keep warm this winter, as heating bills are on the rise:

Some industrial customers and electricity generators are switiching to less expensive natural gas as a fuel, increasing demand and therefore prices.

And this year's hurricane season damaged natural-gas producing wells in the Gulf of Mexico. The United States is heavily dependent on the Gulf for oil and natural gas. Some 25 percent of the nation's natural gas supply initially was lost because of drilling disruptions, and while that is down to 2 percent, the effect on spot and futures market pricing continues.

For instance, prices for natural gas deliveries in January were about $3 higher than the spot market price, which is for deliveries usually within a month. February's future price is about $1.60 higher than the spot price.

Natural gas prices already were going higher because demand was outstripping supply.

Monthly natural gas bills for the 21st Century Health Club in Cotati now top $8,000, a 60 percent increase over $5,000 several years ago, said Kenny, the club's general manager.