Halstead gas bills skyrocket
The sticker shock of high natural gas prices in February is being realized in Halstead, where the city sent bills and letters detailing possible payment plans this week.
"The city understands that these prices are beyond what anyone could have expected or planned for," wrote Ethan Reimer, city manager, in a letter to Halstead residents mailed this week. "... The city will do its best to work with our utility customers."
According to the letter, some residents' bills were 15 times higher than normal — meaning a family who normally spends about $150 month for heat would be on the hook for $2,250.
That is the result of massive natural gas price spikes during a polar vortex event in February that settled in over the central part of the United States for about two weeks. During that event, natural gas wells in Texas which were not winterized froze up — making natural gas hard to purchase.
For about 50 cities in Kansas which participate in the Kansas Municipal Gas Association, prices for natural gas spiked from $3 per unit to more than $600 per unit in less than a week's time.
According to a letter written by Halstead City Manager Ethan Reimer, the average price of gas for Halstead was $102.27 for the month of February.
"During the cold snap over President's Day weekend, the city paid per unit costs that ranged from 10 times to 200 times the normal rate," Reimer wrote. "The city's main objective during that crisis, and now continues to be, ensuring that natural gas i available to our customers. This meant that city had to purchase gas at those inflated prices and means that the city must continue to pay our supplies to not have the change of supply being interrupted."
The cost of gas is a pass-through — customers pay the tab.
In response to the price spikes, the Kansas Legislature created a loan program to assist cities with those increased costs. Some municipalities paid their entire annual budget for gas in less than one month.
"Their action allowed us to pay the bill, but did not reduce the amount that the city had to pay or wave any of the fees or costs being charged to us for natural gas consumption during February," Reimer wrote.
The Kansas Attorney General's office has started a investigation into the price increases, but the findings in that investigation have not been completed.
"The city plans to continue to advocate and work with State and Federal agencies to hopefully get further aid and action, and to prevent such an occurrence from being able to happen again in the future," Reimer wrote.
The loan program gives municipalities about four years to pay the loan back. The city of Halstead, in turn, will allow residents to pay the bill over the course of four years. The minimum loan payment for customers will be $20 per month.
That payment plan must be applied for by April 23, with payments starting in May. The city will not assess fees or interest to payment plans.