Northwest Iowa — Heating our homes during the bitterly cold temperatures we experienced earlier this month will cause an increase in our natural gas bills. However, a natural gas utility that provides the fuel to several northwest Iowa communities is taking steps to help soften the blow to their customers’ wallets.
Geoff Greenwood of MidAmerican Energy says our frigid temperatures were only part of the situation that caused natural gas prices to skyrocket.
(As above) “This was an unusual period, in fact an unprecedented period. We had quite a cold snap here in Iowa, as everybody knows. But in addition, the cold snap extended to the far southern reaches of the U.S., where they produce natural gas. That freezing down there caused production levels to drop. And that, coupled with higher demand, resulted in market prices skyrocketing to unprecedented levels in a very quick amount of time.”
Greenwood says during the cold snap, MidAmerican’s customer usage of natural gas went way up.
(As above) “Here in Iowa, our customers used about fifty percent more natural gas in a two-week period in February than they have used over an average Iowa winter, during the same time. Additionally, the price for the gas they were using went way up. So the result is that our customers are going to see some natural gas bills over the next several months so we can recover the costs of heating in February.”
He says MidAmerican is going to spread February’s high natural gas bills out over a period of months.
(As above) Here in Iowa, because of the extreme cold, and because of the market conditions…the commodity prices that really jumped…the end result is that every Iowa natural gas user, who pays about $566 a year in natural gas costs, will see an additional $214 on average. So we’ll be spreading that out over a period of months to help recover those costs and not make it so that it is such a financial burden right up front
Greenwood says that MidAmerican Energy had taken measures even before the February cold snap and made a move that saved their customers millions of dollars.
(As above) “Even before the cold snap occurred, we took some measures that ended up saving our customers a significant amount of money. We store natural gas, we store liquified natural gas and we also enter into contracts, in advance. So we locked in prices before the market jumped. So we were able to draw from reserves, use those contract prices, and help save our customers an additional four-hundred-million dollars that would have been passed on to them in natural gas bills.”
Now, the utility is taking steps to help soften the blow of February’s natural gas costs by spreading the increase out over the next several months on their customer’s bills.
(As above) “Right now, the costs incurred during February are recovered through August. The Iowa Utilities Board may seek to extend that beyond August, but that is the Iowa Utilities Board’s decision to make. They have set a meeting for March 12th, with regulated utilities, including MidAmerican. The costs have been incurred, the question is ‘how long will the payback period be?’ If it’s extended a little longer then that per-month payback will be not as much money.”
Greenwood says MidAmerican doesn’t mark up the price of natural gas. He says they sell it to their customers for the exact same amount the utility pays for it.
He says he wants to assure MidAmerican Energy customers that they will NOT be getting billed for their entire February natural gas usage all on one bill, but that the increase will be spread out over a number of months.
