By Nick Pedley
News Editor 

The price of the polar vortex

Local utilities deal with price surges during cold snap

 

March 4, 2021

Millions of Americans will feel the pinch of February's polar vortex when they open their gas bills this month, but residents in Everly can breathe easy.

The Everly Municipal Utilities Board of Trustees last week decided to absorb price hikes for natural gas instead of passing the buck onto local consumers. Prices surged in mid-February due to complications at gas wells in Texas, which froze up during the record-setting cold snap that immobilized much of the Midwest. As the nation's natural gas supply decreased, the demand for heating fuel surged because of the frigid temps, which subsequently sent prices skyrocketing.

Everly Utilities and Public Works Director Josh Rinehart said the board of trustees believed absorbing the price spike was the right thing to do. According to his records, it cost more to heat Everly homes and businesses during the five-day cold snap than the entire months of December and January combined.


"The main thing, it's just been a tough year for everybody," Rinehart said. "We're a municipality. Our purpose is to help out when we can. We're here in the community, and we're not a business trying to make a huge profit."

Rinehart said surge prices for natural gas totaled approximately $40,000 more than an average winter month. He calculated that would have resulted in an estimated $150 per user if the gas board had tried to recoup the added costs from consumers.

"That would have doubled a lot peoples' bills," he said.

Everly typically buys most of its gas ahead of time to guard against huge price surges during rare instances like February's polar vortex. The utility did so prior to last month's event, but it was still affected.


Rinehart said the board of trustees had enough cash reserves to absorb the increases.

"We hedge ahead [with purchases] when we can. A lot of towns don't because gas has been so cheap lately," he noted. "Part of it was luck and part of it was some other factors."

Rinehart said the utility board's decision has been received well in Everly.

"Some people weren't aware of the full scope of the situation, so they didn't really understand," he said. "Those that knew what was going on and expected to see that increase were grateful, though."

• Hartley affected by surge prices

Due to how the billing cycle fell, only a portion of February's five-day cold snap was included on the most recent utility bill in Hartley.

Superintendent of Public Works Jaron Benz said natural gas prices during the polar vortex rose to "disastrous levels." Like Everly, Hartley pre-purchases a large share of its gas supply ahead of time, but it didn't matter last month – supplemental spot purchases cost 3.5 times more during the five-day cold snap than it cost for the city's entire gas supply in December and January combined.

"It was substantial," said Benz.

He noted the council will ultimately decide how to handle the price surge, but opinion has tentatively favored spreading the cost out over the coming months.

The biggest price surges were seen Feb. 13-Feb. 17. Benz said the last time anything even approached last month's shortage was in December of 2017, but the situation wasn't as drastic.

Benz said the utility would continue working to resolve the issue in the weeks and months ahead.

"Winter caught up with us in a bad way. I don't think anybody has probably seen anything this extreme," he said. "There's nothing to even compare to this level of how extreme the prices got."

 
 

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