Fulton facing ‘financial disaster’ as natural gas prices skyrocket because of frozen pipes
FULTON, Mo. (KMIZ)
Fulton's city council met Tuesday night to address concerns over fluctuating natural gas and wholesale electricity prices that could impact city utility users' bills.
Mayor Lowe Cannell said the city has had to pay extremely high rates for natural gas from their providers in Oklahoma and Texas because of frozen gas wells.
This created a shortage of available natural gas in the Mid-West, leading to an increase of as much as 100 times the typical purchase price. City leaders compared the number for the polar vortex in 2014. Then, the highest daily price for a decatherm was $5.63. The highly daily price this month was $224.
"It's not going to be catastrophic for the city of Fulton because we have kind of been prepared," Cannell said, saying the city had $5 million in a gas reserve fund.
After Tuesday, more than $3 million of those reserves will have been depleted because of the "off the charts" increase in gas prices.
Cannell said several other cities in Missouri are being impacted by this issue, some having to take out loans to pay for the gas.
"After this is over with, we'll sit down and come up with a schedule of what it's going to take to rebuild those reserves that we have," Cannell said. "We don't want to be caught off guard again."
Right now, there are no short-term impacts for gas customers of the city. Cannell said the best-case scenario is that there are no impacts and the city gets some federal or state relief to help offset the spike in prices.
He said it will take years to replenish that fund without assistance.
"It took us several years to get there, and it's not going to happen overnight," Cannell said, adding they may have to raise customers' prices down the road to start saving back up those funds.
The city has been contacting state and federal representatives to try to find a solution for the issue. Cannell said they hope the state and the president declare this an emergency and direct funds to the communities that are impacted.
Several of the council members also stated that had reached out to state and federal representatives to request assistance.
The city manager said to the council some in the gas industry are calling this price gauging, calling it "criminal." Cannell said Fulton is not involved in any litigation over the price right now, but it's on their radar.
"Whatever takes place we feel like we are in a situation similar to a hurricane or forest fire, it's an act of nature that the citizens weren't prepared for and we should get relief just like everyone else does," Cannell said.
This comes days after the city warned residents about gas wells that have frozen over because of low temperatures.
The city is still asking customers to conserve energy by turning down thermostats, reducing appliance use and other means.
Energy concerns as record cold hang over the middle of the U.S. have led to large blackouts in Texas and some rolling blackouts in western Missouri. Utility companies and cooperatives in Mid-Missouri are urging their users to conserve energy to help ease the strain on the power grid.
Check back for updates to this developing story and watch ABC 17 News at 9 and 10.