Residential and commercial customers of City Gas Company can expect higher rates for a few months, starting with February bills. The recent severe cold in Texas is primarily to blame.
George Bornemann, gas supply manager at City Gas Company, said most of the gas and oil production wells in the Texas region are not “winterized” to protect them from deep, prolonged cold temperatures. As a result, a huge number “just froze up,” which cut the supply of gas to markets.
City Gas has primary contracts for natural gas in the Texas and Oklahoma panhandle areas. Those wells were hit hard.
“We usually can purchase gas in the range of $3 per dekatherm, but for the four-day weekend that included Presidents Day, the price per dekatherm was over $210,” Bornemann said. “Like a lot of other utilities, we were committed.”
The natural gas provider first contracts for supplies in the summer, second at the start of the winter, third at the first of each winter month as needed, and finally “spot market” gas during the month if extra is needed when cold weather is forecast. “In this way, we end up with the lowest mix of gas cost for our customers,” Bornemann said.
At the same time when the gas supply was pinched, the vast midsection of the country was in a deep freeze, and demand was very high.
“Sudden limited supply and huge higher demand invariably pushed prices into a spike,” Bornemann said. “In the 30 years that I have been contracting for and buying gas, I’ve never seen anything like this. We stopped purchasing gas as soon as we could, because we saw that prices could go even higher.”
Residential customers of City Gas will see February rates at or near $1.45 per therm (for about 100,000 BTUs), and likely in the range of $0.85 per therm for the following three months. Residential rates for January were about $0.65 per therm. As a general example, a residence that had a month’s bill of $124 would see it rise to $266 for February.
Company President Jerry Rice emphasized this is a very temporary, unprecedented time.
“We want to do what we can to let our people know this is coming and not be blindsided with a big bill,” he said. “We put a lot of time to figuring out how to lessen the impact. This is hard on everyone. The weather’s impact is not just on the poor folks in Texas.”
Rice said City Gas Equal Pay or “Level Billing” customers should be fine, as they entire year’s usage is spread over the majority of the year. However, those customers who have the entire balance automatically deducted from their bank account each month should be particularly aware of the size of the withdrawal in March.
“We will help our customers make adjustments on their payments,” Rice said. “As always, we have suggestions for assistance that is available to those who qualify.”
Customers can call a City Gas representative at 627-4351 for more information on their bills and payment solutions.