Priority number one these days at City Hall in Winfield: Doing something about the outrageously high gas tab the city racked up during this month’s polar cold snap.
At this point, city manager Taggart Wall does know this much – commercial and residential customers wouldn’t face large gas bills that had to be paid all at one time.
“It’ll be spread out,” he said in a phone interview Thursday evening. “Whether that’s spread over six months, 12 or 18. We’ll do what we have to do and protect our customers.”
Natural gas prices spiked during the sub-zero cold snap and the Winfield gas utility quickly accumulated a large bill. In a normal year, the city might spend around $1.6 million on natural gas.
The city’s natural gas portfolio is a mix of pre-buy pricing and gas bought at various intervals, including in real time.
For six days earlier this month, gas purchases for the city were over $10 million. Because of that, city commissioners Thursday afternoon declared a state of local financial emergency for the city. That’s a way to draw attention to the issue and make the city available for types of relief and aid that may become available.
On Friday, city officials expect to meet with U.S. Senator Roger Marshall, a Kansas Republican. The city also has a lobbyist and others working to investigate the price spike and achieve some level of price relief after the fact.
Wall said the city couldn’t pay the full $10 million price without securing some sort of financing.
GOUGING
There have been plenty of accusations of price gouging going around since the price spike issue first surfaced. Some in Congress have called for investigation into the sudden price jump.
Normally natural gas prices are around $3 to $4 per unit. Earlier this month they shot to about $350 a unit and were for a time over $600 a unit. They’ve since fallen back and are closer to the normal range.
Some distribution issues also have been blamed for the spike. Leaders in other cities and states have also indicated natural gas bills could go way up.
The city estimates costs to customers for six days of energy supply would be equal to approximately 25 times a normal natural gas billing.
City officials have researched other polar vortexes that have hit in the past twenty years. In one instance natural gas peaked at $31 a unit, another time the price hit $18 a unit.
Asked whether he thought the city was a victim of price gouging, Wall was quiet for a moment.
“Off the record? I think it’s pretty obvious. Or heck you can put that on the record,” he said. “I think it’s clear. Something had to have happened.”
