As temps drop, gas prices rise
NEW ULM — Temperatures are dropping, but natural gas prices are rising.
The New Ulm Public Utilities (NUPU) warned residents their gas bills for February could be the highest in years. The cold spell is the reason for the increase in gas prices.
“We’re seeing some of the highest gas prices across the nation in some time,” New Ulm Public Utilities Director Kris Manderfeld said. “It is about supply and demand.”
When temperatures drop, customers turn up the heat in their homes, increasing the demand for gas. Manderfeld said the recent cold polar vortex is worse than previous cold spells because it is reaching into Texas and other southern states where wellheads are located. This is further cutting off the supply of natural gas.
Manderfeld said this was easily the worst spike in gas prices in the last two years. She said at the start of February, gas was $3 to $5 per MMBtu. Two weeks later, it is $157 per MMBtu.
NUPU is advising customers to conserve gas where possible. Manderfeld suggested minimizing the amount of laundry or limiting it to cold water loads. A shower will use less hot water than a bath. Preparing meals with a microwave or toaster oven will also save gas.
As a general rule, for each degree the thermostat is turned down for eight hours, a person will save around 1%.
Manderfeld said NUPU does take part in gas hedging to keep prices stable in the winter. On average, NUPU hedges between 60% and 70% of its fuel supply. However, with a higher demand and gas usage this year, the hedged gas only covers 30% of the supply. While New Ulm gas prices will be more stable than communities without gas hedging programs, customers should still anticipate a spike.