Gas Pipeline

Bitter cold settled over the central U.S. last week, driving up demand for electricity and natural gas. Some natural gas pumping stations froze, further limiting supply at a critical time and taking prices to historic highs. Utility customers will see higher bills, but President Joe Biden has approved an emergency declaration that provides financial assistance for individuals. 

Residents are starting to breathe a sigh of relief now that the threat of rolling blackouts has subsided, but something else is coming that may take their breath away: the natural gas bills that will be arriving in April.

“I hope people are sitting down when they open their bills, because it’s going to knock their socks off,” Stillwater City Manager Norman McNickle said.

Thanks to what has repeatedly been called a perfect storm of circumstances, frigid weather increased demand for both electricity and natural gas while interfering with their delivery and people found themselves bracing for power outages across the central U.S.

Consumers didn’t realize it, but they were competing with their electric providers for the natural gas that runs power plants and heats homes. An extended period of below-freezing temperatures froze some gas wells, limiting a commodity that was already in high demand.

The Oklahoma Corporation Commission held an emergency meeting to remove caps on a group of gas wells with production limits, to increase supply even if it was only a small amount.

Scarcity drove prices up dramatically, pushing the cost for one MMBtu, 1 million British thermal units – about enough to power four average-size houses – from less than $3.00 two weeks before to $999.00 on Tuesday, according to Natural Gas Intel, an industry publication.

McNickle said at that rate, the City of Stillwater was burning $4 million in natural gas per day while its power plant ran at full capacity to help supply the electric grid.

The City will eventually recover those costs from the Grand River Dam Authority, but its gas bill will come due before that happens, he said.

He’s preparing to tell the City Council at its next meeting that a transfer of funds needs to be made. The $1.6 million budgeted for operating the plant will have to be increased to $20.1 million.

Utility customers who turned down thermostats and put off using large appliances to reduce strain on the power grid and natural gas system will also find themselves dealing with unusually high bills after supply and demand drove prices to historic highs, Oklahoma Corporation Commission Public Information Officer Matt Skinner said.

He emphasized that regulated utilities like Oklahoma Natural Gas won’t be able to pass their increased costs on to consumers without approval from the Oklahoma Corporation Commission and none of them have requested hearings so far, even though it’s expected they will.

But people should be expecting to see higher than normal bills even before that happens, because of the bitter cold.

“It’s the same rates, the same charges but you used a lot more,” Skinner said.

If people will continue using electric power and natural gas conservatively for a few more weeks, the drop in demand will ease strain on the gas infrastructure and help bring prices down.

Skinner said the Southwest Power Pool praised consumers in Oklahoma for taking conservation seriously during the power crisis, noting that the impact was apparent and did make a difference.

If people can conserve just a little longer, it will make a dramatic difference.

“Nobody should risk their health by turning the thermostat down too low, especially if they have a health condition,” Skinner said. “But if enough of us do it, even a couple of degrees, it makes a big difference.”

If people know they’re going to have trouble paying those larger than normal utility bills, the best thing for them to do is call their utility company immediately so it can work with them, he advised.

There is some hope for utility customers.

Gov. Kevin Stitt announced last week that he had issued an emergency declaration for the entire state and asked President Joe Biden for federal disaster aid that includes individual assistance for people struggling with elevated utility bills.

On Thursday, Biden approved that request for all 77 counties in Oklahoma and included direct individual assistance up to 75%.

Twitter: @mcharlesNP

Trending Video

Recommended for you