Warm winter kills energy sales
The warm winter temperatures have been great for cutting people's utility bills, but it is killing energy companies. And it could cost you this summer with higher energy costs.
Albany propane supplier Modern Gas laid off eight employees this month, because of slow business. Albany Water Gas and Light officials say they may have to move up their rate increase.
Propane companies say the warm weather has cost them their busiest season. WG&L officials say they lost so much revenue from people not running their heaters, their rate increase set for July may have to be moved up to March.
Modern Gas' propane tank recharging facility is usually running wide open in February. Today it was still. They've been in business since 1954, but have never seen a warm winter like this, and now it's costing jobs.
"Normally we are very busy. Unfortunately we have had to lay off some personnel due to the warm weather," said Modern Gas President Mark Holloway.
Sales of heaters is almost zero, and people are not running heaters off those 20 pound propane cylinders, and don't need to get them refilled. "I think they will wait until next year. I think the season, we've missed it," Holloway said.
Albany Water Gas and Light officials say they know their energy customers have enjoyed lower heating bills, but it's cost them somewhere near two million dollars.
"We were less than budget about $750,000 in December, and I expect January to be worse than that," said John Vansant, Water Gas and Light Commission Director of Fiscal Affairs.
In December, natural gas sales were off 35%, selling 53,000 fewer cubic feet than budgeted. In January, it was short 41,000.
The electricity use numbers were at least 13% lower than budgeted. And that means they will have to make up that revenue to balance their books. And that could mean a ten percent rate increase sooner than expected.
"We were hoping to not do it until July, at the beginning of our fiscal year. But due to this warm weather that we've had. This very, very mild winter, it looks like we are going to have to move it up," Vansant said.
The warm temperatures mean lower heating costs, but it could end costing more when those summer air conditioning bills come due.
Holloway said they are now looking forward to spring and grilling season to increase their propane sales.
Water Gas and Light is having to pay $8 million more this year to MEAG for their electricity supply, and that is why they are having to increase rates.
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