Austin Utilities' customers received a jolt this month when utility bills arrived in the mail: natural gas prices surged from a month previous and the monthly newsletter didn't mention anything about it.

It was a surprise, but also surprised were utilities employees.

They say the price spike was a "combination of reasons."

"There was some unusually cold weather late in the season during the last billing period," Jerry McCarthy, the utility's general manager, said. "There are also the jitters over war in the Middle East and stockpiles are down. It's really a combination of reasons."

United States spot natural gas prices spiked to record highs early this week. Industry analysts blamed a bitter cold winter season in the eastern U.S. for sapping natural gas supplies.

The steady flow of arctic air -- coupled with heavy snowfalls in the southeast, eastern seaboard and northeast -- caused consumers to crank up furnaces. Last fall's predictions that a mild, El Nino winter season would slow heating demands never came true.

Tuesday was the benchmark day in the latest consumer crisis. On that day, spot natural gas prices shot up $18 per million British thermal units, an all-time high for spot natural gas prices and more than five times the $3.30 average in 2002.

Analysts say the price spikes will inevitably mean higher heating and cooling bills in 2003.

The U.S. Energy Information Administration estimates by the time natural gas makes it to the retail market, consumers will pay about 15 percent more.

Actual home heating bills will be more where the late-season cold spell and snowfall are creating a greater demand for warmth in homes

Some 60 million homes -- about half of them single-family homes -- use natural gas to fire their homes.

McCarthy and Stevens, support services director for Austin Utilities, expect the price surge to continue through April at least.

"Naturally, we hope we will have warm weather soon," McCarthy said. "Otherwise, who knows?"

"Austin Utilities tries to contain costs as best we can," Stevens said. "We purchase our natural gas in the spring and summer to build up our inventories for the fall and winter. We purchase 50 percent of our natural gas that way. The other 50 percent we buy off the spot market and that's where the price surge is occurring."

The Austin Utilities pair plan to issue a press release soon, explaining the price spike to the 10,000 or more Austin residents who use municipal utility serves.

Both also say consumers can help their own situations by embracing conservation efforts.

Austin Utilities is a leader in consumer education efforts. It offers such incentives as a Conserve and Save rebate program and other options to customers.

It may not be much solace to customers who are paying as much as 40 percent or more of their budgets above last month's utility bills.

Also McCarthy and Walter Stevens are aware of the 2001 price surge that resulted in price-fixing charges by the federal government against California utility companies and the discovery that stockpile shortages did not exist.

And Stevens noted it could be worse, saying Austin Utilities' natural gas rates are among the lowest of those charged by utilities of comparable size.

However, both say the situation must be viewed in perspective. "The average residential user will be 87 cents per therm, beginning with their March utility bills," Stevens explained. "That compares to the $1.11 per therm they paid in 2001."

Their advice to consumers: turn the thermostat down, weather-proof the home and do what they can to conserve what analysts say is a dwindling stockpile.

That worries McCarthy and Stevens because, despite the best efforts to encourage conservation, Americans still consume at steadily growing rates.

Residential natural gas consumption is increasing at a rate that will put it ahead of the much larger industrial consumers by 2020, according to a chart compiled by Stevens.

Lee Bonorden can be contacted at 434-2232 or by e-mail at :mailto:lee.bonorden@austindailyherald.com