Wholesale natural gas prices have increased drastically with the cold that’s spread across the country.
Sioux Center Municipal Utilities Manager, Murray Hulstein says they pre-purchase gas to lock in a favorable price, but when you deal with prolonged cold like this — you need to purchase more gas without a preset price.
Hulstein says the spot prices on the open market increased from $2 for MMBTU to $200. He says when you need more gas to supplement your contract supply — you are at the mercy of the market.
“Its a supply and demand issue. Obviously when you are purchasing gas, you buy it at the price you can get it at,” Hulstein says. Hulstein says with this significant price increase — customers can expect the cost of natural gas in Sioux Center to increase significantly and impact utility bills for the time being. Hulstein says the weather has played a role in the supply beyond the need to burn more gas to keep warm. It has also caused issues with getting gas out of the wells.
“The wells freeze up and they don’t produce any natural gas. So, the supply is less than what you want and demand is probably at historical highs,” Hulstein explains.
He says customers can discontinue unnecessary natural gas use, consider a programmable thermostat to avoid heating an unused space, make sure your furnace is running efficiently, including changing filters. Hulstein says there is some help available too through the state’s low-income home energy assistance program, or LIHEAP.
(By Mark Buss, KSOU, Sioux Center)