Utility bills reflecting the impacts of the week-long extreme cold weather event in February have left some districts giving thanks and at least one preparing to sue.
The polar vortex that unleashed frigid Arctic temperatures the second week of February strained energy resources. Natural gas well heads froze, decreasing available supply at a time when demand soared. Suppliers warned of potential shutoffs of natural gas if consumers did not curb their usage. Prices rose from around $2.41 per million British thermal unit to $630 per mmBTU in the matter of a week. Gas dropped back down over the course of the following week, but even once averaging the higher costs over the whole month, the exorbitant prices left some cities and their customers reeling.
Awaiting word on federal and state investigations into price gouging, most cities with municipal-owned utilities garnered loans from the state to pay their natural gas and electricity providers, as their bills rose into the hundreds of thousands or millions of dollars. Only the city of Mulberry sought no loan, instead filing suit against BP Energy for price gouging, causing payment on the portion of the bill due from February to be postponed until there is a ruling.
Depending on their natural gas provider, like some cities, many school districts in Kansas have been shocked as their bills have arrived in recent weeks. Shawnee Mission’s natural gas bill was $1.6 million. Smaller rural districts, with much smaller budgets, are also shocked.
Altamont is a part of the Kansas Municipal Gas Association, which purchases gas for about 70 member cities that operate their own utilities. Labette County USD 506’s district office, one grade school and its high school campus consisting of multiple buildings are all Altamont natural gas customers.
USD 506 closed for one day at the city of Altamont’s request to help conserve the natural gas rate of consumption as the district is the largest consumer in the city.
“During that same time we also took a ‘snow day’ or two. We also had a couple of days in which LCHS (Labette County High School) and AGS (Altamont Grade School) had classes virtually while the rest of the district’s attendance centers met in person,” Assistant Superintendent Tony Blackwell said.
Despite students and teachers not occupying buildings in Altamont and thermostats being adjusted downward, the gas bill for February’s billing period was more than $165,000.
“A normal gas bill during the winter months runs between $18,000 and $21,000,” Blackwell said.
Mound Valley, Edna, Meadow View and Bartlett grade schools are all served by a different gas supplier than the city of Altamont, so LCHS and Altamont Grade School were the buildings most affected.
Blackwell said the district is paying the bill utilizing the district’s contingency fund and does not plan to be involved in any legal action.
The city of Altamont has said if the investigation finds there was price gouging and officials rule in favor of a partial reimbursement, customers will be reimbursed accordingly.
Some poorer district’s may not have the ability to pay the utility bills not budgeted without going into debt, and some are refusing to cough up the money without a fight.
Following the path of the city of Mulberry, the Cherryvale-Thayer USD 447 Board of Education Monday decided it would not pay the utility bill from Symmetry Energy Solutions that was five times higher than usual.
“They are going to engage with Kansas Association of School Board’s legal services and basically pay the $400 to obtain the services of a utility attorney to attempt to get that bill down further because we definitely don’t think that this bill is fair or legal based on the information we are being given,” USD 447 Superintendent Shelly Kiblinger said.
Normally, the district’s natural gas bill would be around $5,000. Instead 447’s bill was $21,269.
“Our unit price for gas, the part that went up, we normally pay $2.81 per unit, like the month prior, and this month it was $17.87 per unit,” Kiblinger said. “It is our understanding there is a maximum legal gas price in Kansas during states of emergency and that price is $4.57 per unit. There is some sort of law on the books that is designed to prevent price gouging and all of that. That is what is calling all of this into question. $4.57 is the price we are being told it should not have exceeded, and obviously it did.”
Chetopa-St. Paul USD 505 Superintendent Craig Bagshaw said the Chetopa school was impacted because of the city’s contract with Atmos and variable rate. St. Paul, under a different supplier, was barely impacted. Bagshaw said the district’s bill was three times higher than normal. The district is pulling money from the general fund to pay the bill.
Oswego USD 504, which is with Kansas Gas Service, and Parsons USD 503, which belongs to the Greenbush Energy Group, both saw minimal impacts.
“We were not hit with any outlandish utility bills for the unprecedented weather that happened in February,” Superintendent Lori Ray said. “(USD) 503 belongs to the Greenbush Energy Group and has contractual agreements in place that helped to minimize the economic impact and helped to provide the necessary protection from the dramatic increase in natural gas prices. We had slight increases due to usage but did not see the dramatic increases in our utilities that others have reported.”
Oswego USD 504 Superintendent Douglas Beisel said his district is doing fine.
“We were a little bit worried about our Service Valley facility up north, but we didn’t get any additional major hits from that. We got really lucky. Some schools got really hammered. We’re not one of those, thank goodness,” Beisel said. “We did have a little bit higher water bill because we kept water and stuff running, but we didn’t get hammered like out neighbors to the west. My goodness. We dodged one of a thousand bullets.”