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.
In addition, demand for natural gas is highest during the winter because it is the dominant fuel for home heating. The result of tight supplies and heavy demand is traders on commodities markets pushing up prices.
The gas utilities are required to pass along these supply costs to customers without taking a markup. The utilities make profits based on delivery of gas: The more they deliver, the more profit they make. The rates they charge are set by regulators.
"The people making the money are the people who are drilling the wells, owning the gas and selling it to the gas utilities," said Michael Heim, a natural gas utility analyst at A.G. Edwards & Sons Inc. in St. Louis. "The higher gas prices are actually a negative to gas distributors."
Utilities often suffer when natural gas prices are high, analysts said. Customers tend to buy less, which can reduce the utilities' profits for distribution.
Many of the public relations campaigns carry a similar flavor. The companies typically tell customers to prepare for higher prices and describe steps they can take to consume less energy and reduce their bills. Then they go on to explain how prices are set.
KeySpan Corp., the largest distributor of natural gas in the Northeast, has run newspaper advertisements that tell customers: "Our only profit comes from the delivery of natural gas. We will not raise that price this winter."
Citizens Gas & Coke Utility in Indianapolis distributed a brochure with its bill that explains, "Citizens Gas purchases natural gas from national producers and passes on the dollar-for-dollar cost to customers."
In St. Louis, the chief executive of Laclede Gas Co. wrote an op-ed in the Post-Dispatch newspaper explaining that the company is passing along costs from suppliers. "Laclede Gas doesn't benefit, our customers don't benefit, and our employees -- most of whom are also customers -- do not benefit," wrote Douglas H. Yaeger.
Columbia Gas of Maryland and Columbia Gas of Pennsylvania distributed newsletters to customers saying utility companies "have no control over these gas costs."
Washington Gas noted in a customer newsletter that the company "does not gain any profit from the gas cost." The company plans to place print advertisements in coming weeks that will explain the breakdown of costs on customers' bills.
Washington Gas and other companies also are telling customers about steps they have taken to bring down the cost of gas. That includes placing gas in storage during the summer, when prices were lower, and diversifying supply sources.
Some companies also have been urging customers to contact members of Congress to push for more areas in the United States to be opened for drilling as a way to provide more supplies and lower costs. The Web site for Piedmont Natural Gas Co. in Charlotte includes a link that allows customers to call on their lawmakers to increase energy supplies.
The advertising generally does not explain who is making more money from higher natural gas prices.
Higher prices are benefiting the companies that produce natural gas, including major oil firms such as Exxon Mobil Corp., Royal Dutch Shell PLC and BP PLC. Analysts said that natural gas is a cyclical business and that the companies are benefiting from the current spike.
"What goes up comes down," said Tina Vital, an analyst with Standard & Poor's Corp. in New York. "They've lived with prices that are low. It's certainly their gravy when the prices move up."
KeySpan explains in ads that it doesn't profit from higher prices.