Gas bills higher but not as high as feared
NEW ULM — The first batch of utility bills for New Ulm customers has been received for February, and gas bills are higher, but not as high as anticipated.
Last month, New Ulm Public Utilities (NUPU) warned of high natural gas prices because of the polar vortex that hit the country.
Cold weather typically results in a spike in gas prices, but the recent cold impacted the entire country, including Texas.
The natural gas supply Minnesota receives from the southern states was effectively cut off as pipelines froze, driving up demand.
The market price for gas at the beginning of February was $2.60/MCF but it spiked to $188.32/MCF during the extreme cold.
With record-high gas prices, NUPU was concerned customers could see their gas bills triple.
In response to the increase, the New Ulm Public Utilities Commission (PUC) decided to buy down the cost. The PUC would effectively pay a portion of these bills for customers using reserves.
PUC voted to pay off $2.6 million of customer bills. This would decrease residential customer’s February gas consumption by as much as 36%.
Even with the $2.6 million buydown, New Ulm gas customers will still see an increase on the February bill. To help, the PUC approved an option for customers to set up a five-month contract to pay off the increase, instead of paying it off all at once.
Last week, a third of the utility bills were mailed to New Ulm customers, with a letter explaining the increase and how customers could set up the five-month contract.
NUPU Director Kris Manderfeld said as of Tuesday, 30 five-month contracts have been set up by customers. Manderfeld said this is less than expected.
Some customers have called to be put on the five-month contract before receiving their bills, but NUPU is recommending customers wait until for the bills before calling.
“We’re finding people were prepared for the increase and were surprised their bills were not higher,” Manderfeld said.
Based on a random sampling of the bills, NUPU has seen some gas bills tripled in February, but some only increased by 20%. There is no typical increase.
Manderfeld said the gas bill was still based on consumption. If people were prepared and conserved gas during February, their bills could be relatively low. The NUPU will have a better understanding of the impact once all the February gas bills have been mailed.
Manderfeld warned customers who have automatic bill payments through automated checking accounts that the entire February payment would be deducted from the account unless the office is in contact before the due date. The office can be reached at (507) 359-8259.
The impact of the gas increase is still being investigated by municipal utilities. This includes questions on who benefited from the price spike. To cover the cost of the spike, NUPU’s savings were depleted in four days without any improvements to service.
Manderfeld said the Federal Regulatory Commission had started an investigation. Manderfeld and other utility directors have also spoken with Congressman Jim Hagedorn about the crisis.
On the positive side, Manderfeld noted gas prices returned to normal. The prices are currently the same as they were before the polar vortex. With warmer weather returning to Texas and other southern states, Minnesota’s natural gas supply should be stable.