A 12-month spread out
Hartley to recoup gas surge prices over next year
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Natural gas prices surged in mid-February due to complications at gas wells in Texas.
Hartley will recover February's natural gas surge prices by adding the expense to customers' bills during the next year.
The city council on Monday agreed to add 24 cents per CCF to bills for the next 12 months. Doing so will allow the city to recoup gas price surges from February, which skyrocketed during the five-day polar vortex.
"Everybody is doing something different, and there's not a perfect answer for the situation," said Superintendent of Public Works Jaron Benz. "It was such an odd and unknown situation...spreading it out seems to be the best."
Natural gas 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 supply decreased, the demand for heating fuel surged due to the frigid temps. Natural gas prices subsequently spiked and utilities were left to foot the bill.
Due to how the billing cycle fell, only one day of the five-day cold snap was included on the most recent utility bill in Hartley. Benz and the council weren't interested in recovering the increased expenses during the next billing cycle and instead opted to spread it out.
"Financially, you don't just want to bill it all at once because it's just not going to be feasible for a lot [of customers]," said Council Member Mary Westphalen.
Some council members feared that if the city extended the recovery period beyond 12 months, the city might not be able to recover the expenses.
"I just don't want to have the same thing happen in February next year and here we are still paying this off," said Council Member Brian Myers.
Hartley buys most of its gas ahead of time to guard against surges. However, demand increased so much last month that the city had to complete spot purchases, leading to a bill that was $152,000 greater than the amount it had hedged for during that time frame.
"We have never seen anything like this," Benz said. "The dollar amount is huge on this."
