Arctic blast will mean higher utility bills. Big question for consumers: How high will they go?

Donnelle Eller
Des Moines Register

February’s record low temperatures have Iowans bracing for budget-busting bills.

But tallying up how much higher those bills might be will take some time, MidAmerican Energy and Alliant Energy said Friday. “It is too early to quantify how this week’s events will affect upcoming customer utility bills,” MidAmerican spokesman Geoff Greenwood said in an email Friday.

An Arctic blast across the Midwest and much of the country increased demand for power and the cost to produce it. At the same time, extreme cold in states to the south of Iowa, especially Texas, froze wells, reducing natural gas supplies and sending prices to record highs.

The Iowa Utilities Board said it’s talking with MidAmerican, Alliant and other rate-regulated gas suppliers about rising costs before the companies file requests to recover them.

“The extreme cold weather caused by the polar vortex has resulted in the demand for service and the price of natural gas and electricity to increase to unprecedented levels,” the board said, and it anticipates the utilities’ increased costs to be substantial.

“While customers will likely see an increase in their bills, we don’t yet know how much or the timing” of an increase, the Iowa Utilities Board said.

Jennifer Easler, the Iowa attorney general’s consumer advocate, said her office and the Utilities Board plan to meet with MidAmerican, Alliant and other regulated utilities March 12 “to come up with an approach that’s sensitive to the impact that customers could feel, while balancing the need for utilities to recover the costs they incurred.”

Alliant spokesman Mike Wagner said It’s unlikely that Iowa consumers will see the extreme increases reported in places such as Texas, where Newsweek reported a man saw his February bill spike to $8,000.

It’s normal for rate-regulated utilities to recover costs that might exceed their projections, Easler said. But the big spike in electricity and natural gas prices has the Utilities Board concerned that expenses are beyond “what customers can handle at one time,” she said.

The Utilities Board wants companies to consider recovering their costs over time to hold down the increase consumers would see in their monthly bills.

Municipal and rural electric cooperatives are not regulated by the Iowa Utilities Board, but Easler said those utilities also are concerned about not overburdening consumers.

Utilities may experience differing costs, she said, depending on the markets they operate in. MidAmerican said the company uses storage and supplier contracts to control natural gas costs. Both MidAmerican and Alliant said the natural gas costs they pass on to consumers contain no markup.

MidAmerican said consumers used 50% more natural gas over the past few weeks compared to the historic average over that period.

During the worst of the cold snap, Iowa utilities urged consumers to conserve energy, both to help reduce their costs and ease the demand that utilities nationwide were struggling to meet.

Southwest Power Pool, a group responsible for controlling electric transmission markets in sections of 14 states from Texas to Iowa and Minnesota, directed utilities, including Iowa member Corn Belt Power Cooperative, to institute rolling blackouts amid subzero lows, fearing it wouldn’t have sufficient supply for its users.

Corn Belt Power, a power supplier to cooperatives, businesses and a municipality in northwest and central Iowa, temporarily disrupted service for some customers Feb. 15 and 16. On Friday, Corn Belt said Southwest Power Pool no longer was experiencing an emergency as temperatures rose from their earlier extremes.

Iowa utilities urged consumers to contact their service provider if they’re experiencing challenges paying their bills. Utilities offer budget billing that levels out seasonal spikes, and there are state programs to help low-income Iowans pay their utility costs.

People brave the sub-zero temperatures on Tuesday, Feb. 9, 2021, in Des Moines, IA. The stretch of arctic cold is expected to last through the weekend according to the National Weather Service in Johnston.