Unusually cold temperatures from approximately February 13th-17th dramatically impacted the natural energy market. Frigid temperatures across the country not only caused remarkably high demand for natural gas, but also resulted in a sudden decrease in natural gas production due to frozen natural gas wells in the south. This combination caused extreme challenges and historic gas spikes across the country.
Emmetsburg Municipal Utilities (EMU) works closely with Clayton Energy, an energy supplier and consultant for municipal utilities, to purchase gas from Northern Natural Gas and deliver it to our customers. Clayton Energy President Bill Lindley explained that while polar vortex events have occurred before, the impacts of this event were unprecedented and unexpected. “These events are not uncommon [but] have not had a significant impact on gas prices until this event. This polar vortex was extreme, both in the amount of land covered and the duration of the polar vortex.” For a five-day period during this extreme event, EMU’s spot gas supply cost skyrocketed from roughly $2 per dekatherm to $203-212 per dekatherm, totaling over $926,000 for those five days alone. In January, EMU’s total supply cost was $109,000. In February, that cost jumped to $1,059,000.
Fortunately natural gas prices have now returned to near pre-polar vortex prices; however, customers will see the impact of the price surge on their March bills. Emmetsburg Municipal Utilities recognizes the financial burden it would cause to pass the entire cost to the customer, and therefore made the unanimous decision to pay for 50% of the billing increase caused by the five-day price surge in spot gas. City Administrator and EMU Superintendent Kim Kibbie expressed, “One of the benefits of having a local, community-owned utility is the ability and willingness to provide assistance to its customers and reinvest back into the community.” EMU Chairman Kirk Haack explained that thanks to the work of the past and present administration, staff, and boards, Emmetsburg Municipal Utilities is a financially sound utility. In an extraordinary event such as this, and a time of crisis for many, EMU felt it was appropriate to help Emmetsburg citizens. Accordingly, EMU will use $463,099.11 of its cash reserves to subsidize customers’ bills and cushion the impact of significantly higher gas bills.
The following figure illustrates the billing increase caused by the February polar vortex and the amount an average residential customer can expect to pay for the natural gas portion of their bill after EMU’s 50% spot gas subsidy.
Emmetsburg Municipal Utilities understands that even with this assistance, the increase on March utility bills may cause hardship for customers. If you are unable to pay your bill or need some additional assistance paying, please stop in or call EMU at 712-852-2550. Our doors are open, and EMU staff will work with you to set up a payment plan. Additionally, please understand that these price increases are a one-time occurrence on natural gas only and will not affect future billings. EMU appreciates your understanding as we work to minimize the impact on customers following these unforeseen events nationwide.
