Iowa Association of Municipal Utility (IAMU) member communities are preparing customers for the potential of unusually high natural gas bills when February invoices are released. Six towns in the listening area have city-owned gas utilities: Sac City, Wall Lake, Manilla, Manning, Coon Rapids and Guthrie Center. According to Wall Lake City Clerk, Chris Rodman, it is almost a certainty bills will be higher than usual, but it is not clear yet how much they will be increasing.
The concern lies with how the remaining natural gas demand is met, usually through what is known as the spot market. At the beginning of the month, natural gas was going for about $3 per 1,000 cubic feet (Mcf) but jumped to as much as $150 per Mcf due to high usage and freezing pipelines in the southern United States. For example, with Harlan Municipal Utilities, which is within IAMU Region 2, natural gas expenses spiked to $1.8 million between Feb. 11 and 17 compared to only $70,000 the prior week. It is not feasible for municipally owned companies to eat these costs and they get passed on to customers. Rodman says their city council and more than 50 other municipal gas utilities are still trying to determine what that may look like.
He adds each city utility will have the final say on how they handle this situation, but their city council is waiting until final numbers come in on March 1 to begin working on a solution. Rodman says they stand ready to assist customers in the event they do see unprecedentedly high bills.
Guthrie Center, another IAMU member community, said in a press release Tuesday morning, they too are expecting sharp increases to February bills and efforts are underway at multiple levels of government to minimize the impact on customers.
