Joe Green

By: Joe Green, Director, Customer Service, Generation & Substations

In the March newsletter I talked about natural gas rates rising and utility bills increasing from 25%-40% over last year. Unfortunately, unprecedented natural gas prices and colder temperatures continued and are impacting gas rates and utility bills more than expected.

OPU has a hedging program in place to buy some of our natural gas at lower costs into the future and maintain reliability for our customers but additional natural gas must still be purchased daily to meet demand. Throughout February and the first week in March, the natural gas market experienced unprecedented spikes in daily prices(see “Daily Natural Gas Price” chart below). The total cost to purchase natural gas more than doubled what it was in 2013 at this time. It is likely that higher rates could remain for several months as we recover these costs.

Daily Natural Gas Prices

(1): Natural gas prices are based on the Ventura Price index

As a utility, the actual cost of the natural gas purchased is recovered using an adjustment called the Purchase Gas Adjustment (PGA). This adjustment “trues-up” what was purchased from our supplier in previous months against our forecast and adds either a charge or a credit to customer bills. If you look on your utility bill you will see a separate PGA line item that changes monthly. For almost a year the PGA has been a credit on your bill.

The April PGA will mark the largest increase and highest price for natural gas that OPU has experienced.

Although customer’s gas consumption will begin to drop off as the weather warms up and heating requirements decline, we expect utility bills will more than double due to increased natural gas prices. We understand this will be difficult for everyone and we encourage customers to continue to practice conservation to keep utility bills lower.  Visit our Conservation Tips page for more energy saving tips.

We do recognize many customers may need help and we encourage customers not on a budget plan to contact OPU customer service and get more information.  If customers need further assistance, we offer payment plans to split up larger bills and we can also help direct those that need 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