Natural Gas Letter
Due to the February extreme cold spell that encompassed a large portion of the country, natural gas current market (spot) prices rose to disastrous levels. Hartley Municipal Utilities has a large share of natural gas purchases hedged/pre-priced ahead of time to limit exposure to extreme fluctuations in current market (spot) pricing like this. This helps keep rates low and consistent throughout the higher demand winter heating season. However, when demand reaches a certain level on our system some spot price gas must be purchased to supplement needed supply. Normally this isn’t a big issue except that almost everybody in the middle of the country was in need of additional gas and supply was down due to infrastructure issues related to cold in areas that are unaccustomed to it.
During the five-day (critical supply) period the spot gas the utility purchased equaled out to be 100 times higher in price than the same month last year. Of the total, a fraction was built into rates for the February billing to recover some of the cost. The utility is currently exploring options to recover the remaining costs in a way that will be manageable and fair to customer/owners over a period to help spread the cost.
The effects of this unfortunate situation are and will be felt by natural gas customers throughout the Midwest for months to come. Hartley Municipal Utilities will continue to work diligently on this issue and strives to provide the best service and most economical rates for its customer/owners.
Hartley Municipal Utilities