The news reports are shocking: Homeowners in Texas opening their utility bills, to find a years’ worth of charges on one month’s bill – sometimes more. The bills are due to extreme Arctic temperatures from the Dakotas to Texas Feb. 10-17, causing exceptionally high demands on electric and natural gas supplies.
“We’ve received hundreds of questions from customers about how the energy price run-up will affect future bills,” said Patrick Parke, Midwest Energy’s CEO. “We won’t know the full impact of those price run-ups until mid-March when pipeline and energy supplier bills arrive. But whatever the amount, we will not be sending homeowners unpayable bills for thousands of dollars. If necessary, Midwest Energy will stand with our customers by booking extra costs and amortizing them over a period that could span months or years,” Parke said.
Parke added that customers will still see higher energy bills in March, primarily due to usage.
“The first 20 days in February, we sold 40% more gas by volume than we did in the same period in February 2020,” he said. “Customers with bills 30, 40 or 50 percent higher than normal should pay close attention to the usage shown on the charts on their bill to understand why the bills for February are higher.”
“Midwest Energy is in a strong financial position to weather the situation,” Parke said. He also said this is not the first time the co-op has put an energy supply expense on its books to be amortized. Parke noted that in 1998, Midwest Energy purchased a gas system that came with an obligation to purchase gas for decades at above-market prices. Midwest bought out the supply contract for $27 million, paying it off over several years to allow the co-op to purchase much cheaper gas. That charge cost residential customers $33 a year on their bills but saved much more in lower gas costs.
Lastly, Parke said that Midwest is working to understand what transpired during the energy emergency, and what the co-op can learn from it to ensure it continues to provide reliable, affordable service. “The effects from this event are being scrutinized by companies, regulators and legislators,” Parke said. “I’d never seen anything like it before, and I’m confident we will all learn from it to prevent another occurrence. We also want customers to understand the Texas electric market is largely unregulated. The reports of extremely high bills appear to stem from Texas energy suppliers who operated only in the highly volatile hourly energy market. Midwest Energy has no such retail natural gas or electric rates.”