Gas prices are up and the pain may be felt beyond the pump.

The fall of 2008 could bring some unprecedented home heating challenges.

Natural gas prices have set record highs in both June and July for residential customers of NIPSCO.

The July price of $1.72 a therm is 149-percent higher than the January 2008 price of 70-cents.

In other words, if your January gas bill was 250-dollars, at today’s prices, you’d be charged 622-dollars for the same amount of gas.

Today on South Bend’s west side insulation was being pumped into a home on Brookfield Street.

The weatherization project could lower energy usage at the home by as much as 40-percent, although it is unlikely to lower gas bills--if the current pricing trends continue.

“It’s going to be a rough winter for a lot of people,” said Rich Gadacz with Real Services of northern Indiana. “The average American can’t afford that,” Gadacz added.

The July price crushes the previous high of $1.36 a therm set in October of 2005 in the wake of Hurricane Katrina.

So what’s behind the latest price spike?

“There’s what’s called the Independence Hub which provides a large amount of natural gas supply throughout the U.S. in the Gulf of Mexico and they had an outage from April till June,” said Nick Meyer with NIPSCO.

Meyer also laid some of the blame for the current pricing situation on a weak dollar and investor speculation.

“That alarms me, it alarms me for our clients, our lower income clients,” said Gadacz.

Still, another client came into 2008 anticipating the worst.

At Holy Cross School, ‘hedging’ used to be the sole concern of the gardener.

“It’s storage, it’s like hedging. You’re buying a little bit in advance,” said Holy Family Business Manager Jim Niespodziany of his new method of purchasing natural gas.

Holy Family school suffered during the last natural gas pricing crisis in the winter of 2005/2006. At that time, the school dialed down the thermostat to 64, told students to wear sweaters, while managers told themselves that there had to be a better way.

“This is the first year we're going into the storage of gas for the future and buying gas in advance at a better price,” said Niespodziany.

Under the terms of its new purchasing plan, Holy Family was paying $1.13 for its gas in July.