Tag: Natural gas

Kansans will pay more for natural gas this winter

Your natural gas bill will increase this winter as supply issues drive up market prices.

by Brian Grimmett, Kansas News Service

Wichita, Kansas — Your natural gas bill is going to go up this winter.

Natural gas prices run nearly double what they did a year ago and experts predict the increased prices to last at least through the winter.

Utility companies pass the cost of natural gas directly on to their customers. As the price of wholesale natural gas increases, so will the fee your utility charges every month.

For Kansas Gas Service customers, that fee this month is $5.67 per thousand cubic feet of gas used. Last October it was only $3.76.

Other large gas utilities have made similar increases.

The Atmos Energy gas purchase fee this month is nearly $1.50 more than last year. At Black Hills Energy it’s more than $3 more.

“Right now, what we see is a relatively tight market, and higher prices signalling that more (gas) supplies are needed on the market,” said Richard Meyer, vice president of the American Gas Association that represents natural gas utilities.

The U.S. Energy Information Agency said a few things are causing strain on natural gas supply that contribute to higher-than-normal natural gas prices.

First, the amount of gas in underground storage is lower than normal. That’s partly caused by February’s winter storm that set record cold temperatures for much of the central U.S. It’s also caused by increased usage by gas-fired power plants during a particularly hot August.

Hurricane Ida also cut natural gas production and supplies.

While the EIA expects many of those supply issues to get resolved, it said the price will likely remain high all winter.

If it does, the average Kansan could see a monthly bill increase as much as $100 higher than last year.

Kansas Gas Service spokeswoman Dawn Tripp said the company has several tools to help keep the cost of gas down even as market prices rise.

The company has purchased and stored large amounts of gas this summer when prices were generally lower. It also will enter into long- and medium-term contracts to try to lock a price in and hedge against future increases.

“By doing that, we’re able to place a price cap on a portion of our winter supply,” Tripp said.

Increased natural gas prices will also greatly impact Kansas farmers. Natural gas is the main ingredient in nitrogen fertilizers. When the price of gas goes up, so does the price of fertilizer.

“Fertilizer is the largest direct cost (for farmers),” said Mark Nelson with the Kansas Farm Bureau.

Higher fertilizer prices will mean thinner profit margins, he said.

Last year the price to put fertilizer on no-till corn was $60 an acre. Nelson said many people are preparing for that cost to double.

“That’s a lot of money just for that one cost input,” Nelson said.

Brian Grimmett reports on the environment, energy and natural resources for KMUW in Wichita and the Kansas News Service. You can follow him on Twitter @briangrimmett or email him at grimmett (at) kmuw (dot) org. The Kansas News Service is a collaboration of KCUR, Kansas Public Radio, KMUW and High Plains Public Radio focused on health, the social determinants of health and their connection to public policy.
Kansas News Service stories and photos may be republished by news media at no cost with proper attribution and a link to ksnewsservice.org.
See more at https://www.kcur.org/news/2021-10-13/kansans-will-pay-more-for-natural-gas-this-winter.

Kansas gas utility won’t release invoices detailing winter prices, but some data is already available

Utilities purchased a combined $1 billion in excess natural gas charges during storm

by Allison Kite, Kansas Reflector

Kansas’ largest natural gas utility has resisted releasing records about what suppliers charged it during the historic cold snap in February that saw prices rise by more than 200 times. But according to a new filing, it has already disclosed much of that information.

In February, when temperatures in Kansas City plunged below 15 degrees for 10 days, natural gas prices went from a few dollars per MMBtu to $300 and $600 on some days. Kansas regulators are reviewing utilities’ plans to pass $1 billion in excess natural gas costs onto ratepayers, stretched over years.

Some large-scale customers have balked at the plans, pushing for more information about what suppliers charged Kansas utilities, particularly Kansas Gas Service, such high prices. But KGS has resisted those calls, saying its supplier invoices are confidential information.

But in a filing more than a month ago, KGS disclosed its suppliers and how much it paid each of them during the storm. A key piece of information missing is how much it paid per MMBtu, which would allow for comparison between companies.

“It seems to us to not be reasonable to say … 90% of what’s in the invoice is public, but 10% is not. That doesn’t seem to make logical sense to us,” said Jim Zakoura, an attorney representing the Natural Gas Transportation Customer Coalition, a group of large-scale business customers.

Zakoura filed with the Kansas Corporation Commission Wednesday asking commissioners to reconsider their earlier decision to deny his petition to release KGS’ invoices.

“It highlights the fact that in five days the market was so dysfunctional, in our opinion, that it caused a run-up of $1 billion,” Zakoura said.

Dawn Tripp, a spokeswoman for KGS, said documents the utility has filed with KCC are fully accessible to the agency’s staff, the attorney general’s office, Zakoura’s client and other consumer and business groups.

“Specific information about the pricing structure of the agreements we have with our natural gas suppliers and the prices paid are confidential,” she said.

Tripp said KGS has disputed charges with one supplier, Southwest Energy, reducing the cost of gas by $5.6 million. Another dispute, with MacQuarie Energy, is worth nearly $15 million and pending.

KGS is requesting to pass on more than $451 million in natural gas costs and carrying fees, the largest total of the Kansas utilities, and recover it from ratepayers over five, seven or 10 years. The change would increase the average customer’s bill anywhere from about $4 to $11 per month.

Kansas Reflector stories, www.kansasreflector.com, may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0.

See more at https://kansasreflector.com/2021/09/23/ks-gas-utility-wont-release-invoices-detailing-winter-storm-prices-but-some-data-is-already-available/.

Governor calls for investigation into power system failures to prevent price surges

Gov. Laura Kelly on Friday called on the Federal Energy Regulatory Commission to investigate the causes of system failures during the recent extreme weather event in Kansas, and protect Kansans from natural gas and electricity price surges resulting from increased demand.

“I have directed my administration to use every tool at our disposal to ensure Kansans are protected from price surges, and that our system is better prepared to handle problems created by circumstances like extreme cold weather,” Gov. Laura Kelly said in a statement. “We will remain in communication with the Biden administration to secure aid, and continue to encourage Congress to pass a stimulus package with state and local funding to provide relief to Kansas communities.”

Kansas Corporation Commission Chair Andrew French, Commissioner Dwight D. Keen, and Commissioner Susan K. Duffy also signed onto the letter urging a federal investigation.

“The recent energy pricing and supply emergency will have serious financial implications for all Kansans and the KCC will take every action within our authority to ease that burden,” French said. “However, our jurisdictional reach is limited. We need swift and decisive leadership at the federal level, as well.”

Gov. Kelly and the Kansas Corporation Commission called for the FERC to:
• Examine the circumstances that reduced the supply of natural gas and compromised pressures on interstate pipelines;
• Exercise its authority under Sections 4A and 23 of the Natural Gas Act and take all actions within its power to protect consumers and ensure the integrity of natural gas price indices;
• Work with NERC to investigate whether additional reliability mechanisms are needed to respond to similar events like this in the future.

The governor stated that her administration and the KCC look forward to working with the FERC in any way they can to ensure similar adverse public health and economic impacts never occur again because of extreme weather conditions.

The letter is at https://governor.kansas.gov/wp-content/uploads/2021/02/GLK_KCC-ltr-to-FERC-2.19.21-FINAL.pdf.