With natural gas prices beginning to stabilize after last week’s record-breaking cold snap, government officials are seeking assistance to avoid having to pass on the costs and help keep customers’ gas bills down.
Over a period of just six days last week, the City of Winfield incurred more than $10 million in natural gas costs, when it normally purchases $1.6 million in gas for the entire year. If that entire cost was passed on to customers, the average bill next month for just natural gas alone would be $2,500 per customer, Winfield City Manager Taggart Wall told The Wichita Eagle.
Daily index pricing for natural gas for Saturday, Sunday and Monday was down to less than $5 per million British Thermal Units (MMBtu), according to an update from Wall over the weekend. Prices had risen to an all-time high of $428 per MMbtu on Feb. 18, as property owners and utility providers struggled to keep up with the demand during a cold front that gripped the midwest last week and sent wind chills into the minus-20s and -30s. Wall said last week that officials are still seeking answers as to why prices increased so dramatically.
As concerns about the supply availability have waned, utility providers have turned their attention to the financial concerns associated with the spike in gas usage, Wall said.
“As a community-owned utility, we don’t have shareholders looking for profit — our shareholders are you,” Wall said. “We are working to gather all relevant information to determine the full financial impact of this extraordinary event and how it will affect future billings.”
Wall said the City of Winfield has joined 2,000 other municipal gas systems to demand answers and relief through the American Public Gas Association and the American Public Power Association, which are the legislative and policy arms for public utilities.
The City of Winfield said it will continue to work closely with customers to ensure they can pay bills, and asked people to call (620) 221-5500 with any questions.
The City of Winfield’s natural gas supplies are purchased several ways by its commodity manager, the Kansas Municipal Gas Agency, according to a previous message from Wall. Around one-third of the city’s supply is pre-purchased on a fixed-price contract, another third is purchased one month ahead based on forecast models, and the remaining third is bought on the daily market. The city also purchases gas in the summer months at a lower price to keep in storage and use during times of high demand.
Other officials are also trying to help lessen the impact on consumers.
Utility providers are still looking for answers from regulators regarding pricing and other concerns.
Kansas Gov. Laura Kelly has requested that the Federal Energy Regulatory Commission investigate utility pricing and other regulatory issues, and is requesting financial relief for customers.
Rep. Ron Estes said in an email that he is working with state and local officials, along with utility providers, to address the crisis, and is calling on FERC to protect Kansas consumers.
Messages left for Reps. Cheryl Helmer and Bill Rhiley, and Sen. Larry Alley, were not returned before deadline. A request for information sent to Kansa Gas Service, which provides natural gas for Arkansas City, was not returned before deadline.