Higher natural gas prices will impact customer heating bills this winter, MidAmerican Energy says

Published: Oct. 12, 2021 at 10:58 AM CDT
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DES MOINES, Iowa (KWQC) - MidAmerican Energy on Tuesday said higher natural gas prices will impact most monthly heating bills during the upcoming winter season.

Natural gas market prices have more than doubled from this time last year, as increased global demand coupled with both limited production and inventory have heavily increased the cost for MidAmerican to purchase the natural gas it delivers to its customers, the company said in a media release.

“We’re not seeing signs of supply challenges this winter, but we do expect to see higher customer bills because of higher commodity prices,” Peggi Allenback, MidAmerican vice president of market operations and supply, said.

“We don’t mark up what we pay for natural gas, rather the cost of the commodity is a straight pass-through to customers. We purchase a portion of gas in advance at the best possible price, and in warmer months, when gas is generally cheaper, we store it for use in winter to help protect our customers financially. Despite these efforts, though, we want our customers to understand that natural gas bills will still be higher this heating season.”

The higher market prices will affect a customer’s gas supply charge, which is the cost of the natural gas the customer uses. Market price fluctuations do not affect rates, which include fixed administrative costs, as well as costs associated with maintaining infrastructure and ensuring safety, according to the release.

Actual bill impacts will vary by customer, due to usage as temperatures get colder and market prices continue to fluctuate.

The company said based on the market prices for natural gas over the last month, residential customers in MidAmerican’s service area can likely expect their total bills to increase by 46-96%. The heating season runs from November through March.

In February, a polar vortex resulted in a dramatic natural gas price spike and higher customer bills, according to the release.

MidAmerican worked with state regulators to spread out those costs over a longer period of time than normal to reduce the financial impact to gas customers. Those costs for February use will continue to be a part of customer gas supply charges for the next several months, according to the release.

In Iowa, MidAmerican is spreading the costs from the February event through April 2022. In Illinois, the payback period extends through March 2022. In South Dakota, the payback period ends in December.

Visit the company’s website to learn more about budget billing, financial assistance for customers, and energy efficiency programs and rebates.

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