Home Latest News High natural gas prices to impact Sioux Center – nwestiowa.com

High natural gas prices to impact Sioux Center – nwestiowa.com

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Updated: June 18, 2022 @ 1:53 pm

Consumers have been seeing higher energy costs at the gas pump, but other energy prices are also rising, such as natural gas, which will impact what Sioux Center residents pay.

Consumers have been seeing higher energy costs at the gas pump, but other energy prices are also rising, such as natural gas, which will impact what Sioux Center residents pay.
SIOUX CENTER—National issues with natural gas prices and electric supply will have an impact on Sioux Center.
The Sioux Center City Council spent about 40 minutes of its June 6 meeting hearing about the concern from Sioux Center Municipal Utilities manager Murray Hulstein as well as ways the city is helping buffer the impact.
Natural gas pricing
Consumers have been seeing higher energy costs at the gas pump, but other energy prices are also rising. The price of the natural gas that Sioux Center Municipal Utilities purchases for its customers has increased significantly in the past six months, Hulstein said. The increase in price of wholesale natural gas has been on the rise since last summer, reaching 210 percent in April.
“We have locked in favorable prices for a portion of the natural gas used by customers. However, SCMU can’t lock in prices in advance due to fluctuating daily use,” Hulstein said. “Customers can expect the cost of natural gas in Sioux Center to also increase and impact utility bills.”
Natural gas is sold per cubic feet, or mcf, and often sees an increase in colder months due to more furnace use. For that fluctuating price of natural gas in a residential home that uses 10 mfc per month, Hulstein said that customer paid $66.60 in January 2019, $59.50 in 2020, $64.40 in 2021 and $83.60 in 2022. The 2023 estimate is $104.20.
A residential home that uses 15 mfc per month saw $96.40 in January 2019, $85.75 in 2020, $93.10 in 2021 and $121.90 in 2021. The 2013 estimate is $152.80.
“It’s only June but soon we may be getting more nervous,” Hulstein said. “Every day we get closer to winter, that price point moves up.”
Wholesale market prices and weather are beyond the city’s control, but Sioux Center Municipal Utilities is not increasing delivery cost of bringing natural gas to homes and businesses.
“Our margins don’t change whether it’s $2 gas or $10 gas and that’s something we choose to do,” Hulstein said.
Hulstein said natural gas prices are near record highs set in 2004-09.
“So this isn’t the highest we’ve been but getting close,” he said. “And we’re not the only ones being affected. In this case, national media has been helpful in sharing that this is a problem nationwide, not just here.
“You may ask, why? I don’t have an answer to that. I see a lot of things contributing this.”
Hulstein said contributing factors include coal plants being retired, which brings up the use of natural gas. Also, pipelines aren’t getting permitted and being finished to aid the transportation of natural gas and the Biden administration said the U.S. is going to be the natural gas supplier for Ukraine, however the facilities to liquefy and transport natural gas to accommodate that are not built yet.
“There’s a ton of emotion going on,” Hulstein said. “It’s a publicly traded commodity and that emotion filters into the physical sale of natural gas. Fundamentally, the gas should be there; we should be able to serve our customers, but technical trading means some folks are making big money right now.”
SIOUX CENTER—A proposed new ordinance would allow the city of Sioux Center to oversee food trucks coming into the community.
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