HUMBOLDT — If Cole Herder had a crystal ball, then last January he would have instructed the higher-ups to purchase as much natural gas as their tanks could hold.
And that’s when prices are typically their highest.
But the Humboldt administrator is like everyone else, unaware of what the market will bear and thus extremely surprised that today’s gas rates are almost double from the first of the year, and almost three times what they were the summer of 2020.
“All I can say is that natural gas pricing will continue to increase this year, and there’s not a lot we can do about it,” he told city council members at their meeting Monday evening.
“We should have bought our reserves in January,” Herder said.
Humboldt belongs to the Kansas Municipal Gas Agency, which provides about 50 small to medium-sized towns with their natural gas.
Gas bills most recently mailed were for $9.22 per thousand cubic feet. According to national averages, a typical household uses 5,000 units per month. At Humboldt’s current rate, that equates to about $460 a month.
Herder said the increase in prices reflects only the price of gas and not any of the costs such as delivery of fuel and being a KMGA member.
The consortium is also asking its members for help in boosting its legal fund, which has been depleted by about $200,000 in attorney fees incurred from the deep freeze emergency of last February. KMGA sought legal help to eliminate any penalties for late payments. The city of Howard is also suing KMGA for the precipitous rate hike it incurred. KMGA is requiring members to contribute a total of $350,000 to its legal defense fund to attain a balance of about $600,000. Humboldt’s share is $10,619.
Herder said some of the reasons for the increase in gas prices include a hot summer.
“There were three weeks when they had to take gas out of storage because of the demand for gas-fired electric generation for cooling,” Herder said. “This is when we need to be putting gas in storage, not taking it out.”
He also noted that approximately 20% of gas production is being exported, primarily to Europe and Mexico, while U.S.-based natural gas production has remained flat over the summer and rig permits for new wells have stalled.
“It’s all very unsettling. It’s very difficult to feel like you have no control,” he said. “The only thing that is going to change this situation is for Congress to insist on price caps for what utilities can charge.”
One ray of hope is that Gov. Laura Kelly declared a state of emergency on Feb. 15, which should have triggered a moratorium on any price hikes. The next day, however, the rates skyrocketed to $622 a unit.
Herder took heart that Attorney General Derek Schmidt has said he is looking into the situation.
“Schmidt said price gouging of that nature is illegal.”
