Halstead city manager warns to expect higher gas prices this winter

By Jared Janzen

HALSTEAD—Halstead City Manager Ethan Reimer says people should be prepared for higher natural gas prices this winter than what they’ve normally seen the past few years.

“To be clear, I’m not talking about pricing approaching the levels like they did in February, but normal base prices are almost twice as high and trending higher than what we’ve seen as long as I’ve been with the city,” he said during Monday night’s city council meeting

The most recent prices he’d seen from KMGA were $3.88 per MMBtu, compared to $1.97 per MMBtu a year ago at this time. For context, when prices skyrocketed last February, they peaked at $622 per unit.

Following winter storm Uri last February and the resulting crisis in natural gas prices, Reimer said the City of Halstead has collaborated with KMGA to change its purchasing strategy. Halstead plans to purchase a majority of its winter gas usage using fixed-based pricing to avoid unexpected changes in the daily rates.

“Fixed pricing typically does always exceed daily pricing if the market is behaving normally,” he said. “So we’ll see slightly higher prices than we previously may have been able to secure under the old method of purchasing. But February did show us that the daily market is way more volatile than anyone expected it to be, and there have been no major regulations concerning how natural gas is marketed or sold at federal or state levels.”

This means the pricing crisis of February could happen again, Reimer said.

“Everyone says it shouldn’t, but there’s no guarantee,” he said.

He noted that prices could climb higher this winter, depending on factors like storage and demand.

“The increased prices are due to several factors, like the continuing concern in the industry over what did happen last February, and then reduced production recently because of hurricanes in the Gulf Region,” he said.

Reimer pointed out some good news that the state attorney general recently announced it was accepting Requests for Proposal to investigate and potentially litigate violations to the state’s anti-profiteering laws. These RFPs are due Oct. 28.

“This isn’t something we’re going to see immediate results from, but it’s at least a somewhat positive step,” he said. “It’s really just an investigation at this point. The attorney general is on the record of saying, ‘Maybe something happened,’ and so we’re getting some outside help and expertise to see if something happened.”

Reimer also reminded Halstead residents that they are not alone in the higher gas prices, as this is a problem many cities are sorting through.

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