Deflecting Heat

The federal government is predicting that natural gas bills will be 38 percent higher this winter than last.
The federal government is predicting that natural gas bills will be 38 percent higher this winter than last. (By Michael Schweitzer -- Associated Press)
By Justin Blum
Washington Post Staff Writer
Saturday, December 10, 2005

Utility companies around the country are so concerned about consumer outrage over huge natural gas bills this winter that they have launched public relations campaigns to convince customers that the companies are not to blame.

"BGE has no control over these price increases," says a Baltimore Gas & Electric Co. radio commercial. "Nor do we profit from them."

In newspaper ads and on radio and TV, utilities are hammering the message that they are simply passing along costs from natural gas producers and are not pocketing a big bounty. The message also is cropping up in newsletters included with bills and fliers handed to customers. Utilities are even specially training customer service operators so they know how to explain higher prices to irate customers.

With customers' natural gas bills forecast by the government to increase an average of 38 percent this winter, these are among the ways natural gas utilities are trying to avoid being tarred as price gougers.

Utilities said they realize the potential for customer backlash.

"We are concerned," said Jeff Tilghman, a spokesman for Yankee Gas Services Co., which serves customers in Connecticut. "It's an issue of our image."

Some analysts suspect that another aim of the ads is to cut down on the number of customers who don't pay their bills. If consumers feel they are being ripped off by their gas company, they are less likely to pay on time or at all, analysts said.

Yankee has explained to its employees how to talk to customers about higher prices. The company also gives out fliers that explain factors driving up prices.

The companies are trying to avoid a fate similar to that of gas station owners, who became a focal point of customer outrage when pump prices jumped to more than $3 a gallon this fall. Many station owners argued that they were just passing along costs charged by suppliers, but they failed to use advertising campaigns to get their message out.

"We're no different from your local service station owner," said Betty Ferguson, manager of customer care for Baltimore Gas & Electric. "He has the same problem. He's being perceived as making more from the gasoline than he really is."

Natural gas prices have been rising as demand has accelerated faster than supplies have come on line. Hurricanes Rita and Katrina worsened the situation by knocking out production in the Gulf of Mexico, some of which remains out of service.

Unlike crude oil, which can be transported around the globe on ships, natural gas is largely a regional product, flowing through pipelines. Natural gas can be liquefied and transported like oil, but there is little excess supply available for shipment to the United States. Therefore, natural gas companies cannot make up for big domestic supply disruptions by simply importing more, as oil companies do with their product.

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