By: Joe Green, Director, Customer Service, Generation & Substations.
Is an end to winter in sight? Freezing water pipes and frost will be with us for a while yet. The frost is pushing down almost 6 ft. in some areas now and we’re advising customers concerned about their water pipes freezing to get a thermometer and put it under running tap water to monitor the temperature. If it’s below 40 degrees, we advise to run the water continuously with a stream the size of a pencil through late March. Water from the tap is typically about 45 degrees but if it gets to 40 degrees, it may be on a downward spiral to freezing. It’s still cheaper to pay a $1 to $3 a day more for your water than repairing broken pipes or digging up your yard to repair a water service. Please contact us with further questions.
While the frozen water services are an immediate concern, some higher gas bills are coming soon…unfortunately. The cold winter of 2012-2013 held on well into spring and went out with a blizzard in early May. All of us were hoping for a milder winter and so far it’s been lots of snow, wind and bitter cold temperatures. In fact, this winter has been 21% colder than normal and total gas usage in Owatonna was up 11% in January. February is up over 20% from last year. Not only has OPU been setting records, the interstate pipeline company, Northern Natural Gas Company, is setting all-time records for delivering natural gas supplies to the Midwest market areas including Owatonna.
The weather has been keeping everyone busy and we have worked diligently to meet the high natural gas demand for all of our customers. For several years we have implemented strategies to keep customer prices down and minimize the impact from price spikes. One of these strategies is a natural gas hedging program to purchase futures contracts at fixed prices out 36-48 months. By purchasing natural gas in the future we have been able to build a portfolio of lower fixed prices to off-set potential price volatility in the market. Our goal has been to hedge 40%-50% of our monthly requirements in the winter and less in the summer using these fixed prices. The remaining purchases each month involve purchasing monthly index and daily price natural gas to meet the utility’s requirements.
A year ago natural gas prices were trading in the $3.50 range on the New York Mercantile Exchange (NYMEX). For February, prices rose to $5.74 and marked the highest price for natural gas since late 2009. We have also watched daily market prices for natural gas in the Midwest reach an unprecedented all-time high of $53.31 this past January 28th. Due to higher consumption and recent price spikes, customers will see gas rates increase and utility bills jump 25%-40% from last year for the next several months.
We encourage customers to practice energy conservation by turning down thermostats whenever possible or purchase a programmable thermostat. If possible avoid using higher cost electric heat to keep your overall utility bill lower. For more energy savings tips click here.
We also recognize that some customers need help so we encourage customers not on a budget plan to contact OPU customer service and get more information on switching over to a budget plan. If customers need further assistance, we offer payment plans to split up larger bills and we can also help direct those that need even further assistance to several local charitable organizations including:
SEMCAC (507) 864-7741
Salvation Army (507) 455-2023
Steele County Social Services (507) 444-7500
Local church organizations
