HUMBOLDT — Almost three years out from the “perfect terrible storm,” Cole Herder, Humboldt administrator, says the city is on much better footing should it find itself in another prolonged deep freeze.
Beginning Feb. 9, 2021, much of the country’s middle section was held in the icy grips of a polar vortex.
To make matters worse, clouds hung low blocking the sun and the winds did not blow, forcing municipalities to forgo their reliance on wind and solar to help power utilities.
Sensing chaos, natural gas utility producers took advantage of the surge in demand. Prices surged from $3 to more than $600 per unit in a matter of days.
“This week is like hitting the jackpot with some of these incredible prices,” Roland Burns, the Texas CFO of Comstock Resources, a natural gas company, said at the time. “Frankly, we were able to sell at super premium prices.”
It wasn’t his finer moment.
From Mississippi to Montana, municipalities were slammed with unprecedented gas hikes.
“The market went crazy and some people got rich,” Herder said in his understated manner.
For Humboldt, the previous month’s average rate was $2.58 per unit. That February, the average unit rate was $117.08.
When all was said and done, Humboldt’s next monthly statement was for more than $1.6 million.
The city purchases its gas from the Kansas Municipal Gas Agency, which purchases and stores gas for about 50 small-sized cities across the state and is transferred via through the Southern Star pipeline.
Humboldt typically spends $40,000 to $80,000 a month during the winter for gas. That February, its gas bill was $1,644,415.87, more than four times what the city typically budgets for an entire year’s use of natural gas.
With KMGA expecting payment, Humboldt was in a bind.
SOMETIMES there are those who come to the rescue.
In this case, Kansas lawmakers stepped up to the plate, approving up to $100 million in loans to cities unable to make ends meet because of the spurious charges.
In one day, the Kansas Senate and House passed Senate Bill 88, which Gov. Laura Kelly promptly signed into law.
“We would have been legally bankrupt if the legislation had not passed,” Herder said Tuesday, noting that municipalities can’t borrow money from lending institutions.
