The price of two heating fuels used in Iowa rose last week just as the temperatures dropped, but an analyst with the Iowa Department of Agriculture says it’s not something that should concern consumers.
Harold Hommes says the price of natural gas rose 32 cents, but he says there is a lag in price increases as energy companies plan ahead with stockpiles.
“The vast majority of that product has already been put in place by the utilities and those who sell natural gas. And they also have numerous tools available — risk management tools, hedging — that serve to keep that price somewhat lower than the kind of increase we saw this week,” Hommes says.
The Census Bureau estimates 67 percent of Iowans use natural gas to heat their homes, 15 percent use electricity, 14 percent use propane, and the rest use wood or fuel oil. Home heating oil also rose in the latest survey by 11 cents to $2.33 cents. Propane fell one cent to $1.52 a gallon. Hommes says even with the increases in heating fuels, the prices are much better than they have been in the past.
“The biggest thing that I’ve always maintained is that where you’ve got the thermostat set is going to have a bigger impact on the utility bill than is even than a 32-cent rise,” Hommes says. “These are still good values, we are still reporting under three dollars per million metric therm on natural gas — and that’s a really, really good buy.”
While motorists see any change in gas prices daily, Hommes says the movement in heating fuel prices often goes unnoticed since we only get a heating bill once a month. “Sometimes you don’t even check the therms that you use, but it is certainly interesting for those who watch it regularly. But I think they’ll find that the cost per therm actually varies little from month-to-month,” Hommes says. “But the biggest thing is the temperature outside and where they have the temperature set inside.”
He says supplies of heating fuels have been good and there are not concerns about supply issues such as the ones that cropped up last year with propane.