ALTAMONT — Altamont city officials were between pessimistic and guardedly optimistic Monday night about the potential for natural gas supplies to be cut off to Altamont residents in the next few days.
Because of extreme cold weather, gas producers have been faced with several problems, including well head freeze-offs in combination with a large increase in demand from customers, creating an unprecedented situation, Altamont Mayor Richard Hayward said during a special meeting of the city council Monday night.
“Based on those issues, the suppliers raised gas prices. For the city of Altamont, gas prices increased 100 times,” Hayward said, referencing the increase from Kansas Municipal Gas Association for Altamont of $3 per million British thermal units to $400 per mmBTU to handle its supplier cost increases.
City of Altamont public information officer/Chief of Police Michael Shields said the cost increases are not related to contract overages.
“Please note this is a supply issue and not a contract issue,” Shields said.
KMGA does not specify who its suppliers are, only that it works with nine “reputable” suppliers.
“The weekend natural gas purchase made on Friday mornings before 7 a.m. is typically for three days, however due to the federal holiday, Friday’s purchase had to span four days. This purchase coincided with the extreme weather and natural gas prices that were hyperinflating through the day,” KMGA stated in a release Tuesday. “KMGA is pursuing all possible avenues to address with this extreme event including action at the Federal Energy Regulatory Commission as well engagement with Governor Kelly and her administration including the Kansas Corporation Commission, Division of Emergency Management and other federal entities.”
Municipalities are left to deal with the impacts of suppliers’ hyperinflated costs. Some are attributing the increase in costs to Southern Star, the transporter of natural gas to the Midwest through its pipeline. Southern Star explained Tuesday it is solely a transporter of natural gas and does not sell natural gas, denying responsibility for the inflated costs.
“Unlike rates for natural gas supply, which are set by the market, our rates for transportation and storage services are established and capped by the Federal Energy Regulatory Commission,” Southern Star communications specialist Tyler McClure said. “In oversimplified terms, this is a supply and demand issue within the natural gas supply market. The supply market is not only having unprecedented demand given the sustained cold weather, but also is suffering from freeze-offs at the production well heads, all of which exacerbates the supply/demand imbalance, causing price spikes from sellers of natural gas.”
While it may not be able to increase its costs, Southern Star took action Tuesday morning to decrease the volume of natural gas it was providing based on the increased demands on its 5,800 miles of pipeline.
“Southern Star cut our gas supply by 26% starting at 7 a.m. this morning,” the city of Altamont said in an early morning release. “The city is pulling from our gas reserves to help offset this. We do not have information as to how we will be affected tomorrow.”
In addition, residents were informed rolling blackouts would begin again at 9 a.m. and could last for up to two hours at a time.
“Please conserve as much energy as possible. We are using our reserves. Our reserves are limited and will not last forever. Continue to prepare for gas supply loss,” the release said.
City Administrator Audree Aguilera said city officials are not sure how much advanced notice they will receive to notify the public if natural gas is cut off due to high demand.
Shields said the city has no backup natural gas provider.
On Monday evening, Hayward said it is the city’s understanding as long as there are no pipeline issues, there is a reduced chance of actual stoppage through Southern Star.
“With that being said, it does not mean it’s not going to happen. It does not mean we do not need to prepare for that stoppage,” Hayward said, adding he has been working on a contingency plan with Labette County Emergency Management Director Charlie Morse in the event there is a stoppage of supply.
“I talked to and received commitments from some of the area communities on shelter, in case we need to have shelters. I did contact Jim Zaleski (economic development director) in Parsons, which he let me know Mr. Morse had already contacted him and they were working on it through most of the day — looking for buildings in Parsons to use as a shelter if necessary. I’m hoping we won’t need them, but we need to be prepared for the worst case scenario,” Hayward said. “I know it is extremely cold weather and it is not a good time to deal with lowering your thermostats, but if we can lower our usage and decrease the strain on the pipeline usage, hopefully we can get though this as quickly as possible and get back to some type of normalcy.”
Shelter plans being developed include contingencies for people diagnosed with COVID-19, or who are in quarantine.
Concerns were raised for the elderly and those on oxygen. The community is asked to help get word out that those who can stay with family are encouraged to do so for a short time in the event of a stoppage.
“That would be the best scenario in a bad situation,” Hayward said.
Those who have no way to remove themselves from their residences can let the city know. The city will make arrangements for getting people to the shelters. They should send a message to email@example.com for shelter reservation and to notify of residences with oxygen.
Campsites at Idle Hour Lake will be free through Friday for all city residents with recreational vehicles in the event of a gas stoppage.
City officials are striving to mitigate the financial impacts on Altamont and the residents.
Some municipalities participating in the KMGA cooperative have been informed the gas portion of utility bills could increase 10 to 20 times the regular rate. This will depend upon how long it takes for the market to correct to normal prices.
Many residents could not afford such a hike to their utility bills, and the city is highly conscious of that.
Hayward, Aguilera and Stephen Jones, the city’s attorney, said state and federal agencies and officials have been contacted and are seeking ways to mitigate the financial damages that have and will occur for communities and their residents. The Federal Emergency Management Agency has been engaged, and emergency declarations made at the state, county and local level.
“At this time there is no answer to that question, but it is being discussed and is in a lot higher attention than I would have thought the city of Altamont would ever gain,” Hayward said. “Everybody is aware of it, and things are being looked at, but at this time there is no report and no answers to that.”
Labette County issued an emergency declaration for 14 days. The city of Altamont Monday issued a declaration for seven days. Morse said the county will stand behind Altamont and support it anyway possible. The declarations could assist in funding being made available to help communities affected by the exorbitant cost increase. Aguilera said they are hoping for a federal declaration of emergency as well.
“If they do that, it would open up FEMA funding to cities that are in this boat,” Aguilara said.
The Federal Energy Regulatory Commission has also stepped in to investigate how prices jumped to record-breaking extremes in a matter of days.
Asked why the situation was allowed to get to this point, without notice given to cities to prepare even given the weather predictions, Jones said that is a question every mayor is asking the Kansas Municipal Gas Association.
“It is a big question. It is just not the most important question,” Jones said. “The major concern that everyone has … is just to make sure there is still gas. We’re going to ask a lot of questions, and there are going to be a lot of questions and investigation, but that’s certainly not going to happen right now. The major thing that we’re worrying about right now is to make sure nobody freezes to death. Our main goal is to make sure we don’t have to implement the shelters. We don’t want to do that. We don’t want to have to worry about whose got oxygen, does anyone have oxygen, whose got COVID. We don’t want to use these other cities as a shelter. We’d prefer that the gas just stay on and the electric just stay on and can we keep gas on after Tuesday. We’re hoping that we can.”
Everyone is asked to continue to conserve natural gas and electric usage as much as possible. Recommendations for conservation are available on the city’s Facebook page. The Altamont city offices, library, businesses and the school district are all working with the city on usage, actually closing temporarily or decreasing usage wherever possible through Friday. Residents are asked to do their part by dropping thermostats to below 67 degrees, layering up on clothing, blocking off drafts in homes and covering windows.
The city will still hold Zoom and Facebook Live meetings at 6:30 p.m. every day this week to keep the public informed as the situation unfolds.
To read more about KMGA’s explanations detailed in a release Tuesday, visit