Halstead seeking answers, solutions to spike in gas prices

By Jared Janzen

HALSTEAD—Halstead city officials are urging residents to take action now in reducing energy usage to minimize exorbitant energy bills in the next couple months.

“It’s going to go through the roof,” City Superintendent Pat Adams warned. “People need to be conserving energy, because it’s going to hurt.”

In the past week, the city’s gas prices through the Kansas Municipal Gas Agency skyrocketed from about $4 per unit to as much as $622 per unit. City Manager Ethan Reimer called the situation unprecedented.

“It’s a huge increase, and something that doesn’t normally happen,” he said. “We have as many questions about why it rose that fast as we know our customers will.”

Adams likewise said he’d never seen gas prices as high as they were this week. He recalled one occasion 10-15 years ago when they reached $45 per unit, but prices this month far surpassed that.

Reimer said Thursday afternoon that the latest index price he had heard had fallen back to $44, and while this is still 10 times the norm, he believes prices will continue downward.

“We hope it falls back to that $3 or $4 range as quickly as it can, but we don’t control that,” he said.

The spike in prices, though, will translate to substantially higher gas bills for Halstead residents. Reimer said it was too early at this point to accurately gauge just how much higher.

“The prices are going back down, but they’re still above what would be normal for this time of year or what we’ve seen historically this time of year,” Reimer said. “Prices went 10 times to 100 times those normal costs for what was being consumed, as far as what was coming in to the city on the supply side. So there stands to be some substantial impact on a utility bill, but exactly how big that is at this point, we can’t really say with any definitive certainty.”

Since utilities are billed a month in arrears, Halstead residents won’t see the spike on their bills until April.

“That does give us time, thankfully, to drill into the financial picture and try to figure out solutions,” Reimer said.

He said the city council would be discussing this financial problem during its Monday meeting next week.

“Halstead as the distribution company for this has to pay for this gas as well, just as the city, before it gets factored into a monthly utility bill,” Reimer said.

The city could be looking at spending a pretty large percentage of what its 2021 gas budget this month as it pays KMGA upfront.

“The numbers that we’re seeing and those estimates of pricing would put a pretty big dent, if not exceed what we budget for gas in a year,” he said. “It’s not a simple problem by any stretch of the imagination.”

Another conversation that will have to take place is how exactly the spike will translate to users’ bills, and Reimer said that was a decision that wouldn’t be made overnight.

“It’s going to take a lot of thought and time, and we want our customers to know that we’re aware of the issue and yes, they most likely will see large bills, but how that translates to what needs paid and what’s going to be charged to them is still very much not decided at this point.”

Reimer said Halstead is working with KMGA, Kansas Municipal Utility and state legislators to come at the problem from as many angles as it can. It’s too early to tell what the chances are about outside relief, Reimer added.

In the meantime, with gas prices still well above normal, city officials are urging residents to continue reducing energy usage as much as possible.

“Even though prices are starting to come back down, we’re still urging people to conserve as much as possible because the lower your consumption number is, the lower the financial impact is going to be,” Reimer said.

Recommended ways of saving energy include turning your thermostat down and wearing extra clothing to keep warm, sealing leaks around doors and windows, closing curtains to help keep warm air inside, and avoiding use of dishwashers and laundry machines.

With temperatures expected to warm up in Kansas next week, Adams said that could help prices decrease.

“But it depends on what the rest of the country does,” he added. “If demand stays high in surrounding areas, they’ll pull gas in those directions.

Over the past two weeks as the region went through a sub-freezing days, Reimer said the city’s primary goal had been ensuring that gas continued to flow to users, but once it started seeing the price increases, it tried to inform residents, businesses and industries about the need to conserve.

“We got through that hurdle, and we’re looking at the financial picture now of how we minimize the pain,” Reimer said.

He added the city appreciated actions that local industries, schools and residents had taken to reduce their energy consumption in the past week.

He added that this predicament of higher gas prices will likely affect more than just people who live in cities serviced by KMGA.

“This is bigger than Halstead, bigger than Hesston, bigger than Burrton,” Reimer said. “I would expect even residents in Sedgwick and Newton that have Kansas Gas Service will see natural gas at higher rates.”