Iowa towns hit by natural gas price surge in February freeze getting state help
The natural gas bill in Brighton, a town of about 750 people in southeast Iowa, was about $130,000 more than expected for February’s cold snap, says utility superintendent Phil Krochak.
“It’s about as much as the town would pay for an entire year,” Krochak said.
Before winter hit, the town already had locked in prices for a quantity of natural gas equal to 101% of what it used in 2020, said Mayor Melvin Rich. But he said demand soared when temperatures dropped to 20 or more degrees below zero, forcing the town to buy more natural gas “at peak prices.”
Those costs are being passed on to residents, with average bills rising to $750 in February from about $250 for the month before, Krochak said. Brighton residents, who have the option of paying the added cost over a year, reported on Facebook that some bills were over $1,000.
Rich said the council emailed Gov. Kim Reynolds and the state’s congressional leaders, asking if small towns like Brighton could receive some aid. “We have a lot of retired people who are living on fixed incomes” and residents struggling with unemployment, he said.
The state announced Thursday it will offer a temporary $5 million loan program to help towns. It wants municipally owned utilities to demonstrate that the loans — 1% interest notes that must be repaid over three years — will be used to spread out the costs out “so residents don’t see an aggressive uptick in their bills,” said Brian Selinger, an Iowa Economic Development Authority team leader.
Rich didn’t expect assistance. The council wanted to make state and federal officials aware of the plight residents in small rural Iowa towns face. “There’s nothing more we could have done,” Rich said. “We don’t control the weather.”
Other states hit by the freeze have responded with assistance as well. Kansas, for example, quickly made $100 million in low-interest, long-term loans available to towns, some of which faced filing for bankruptcy because of their large natural gas bills.
Reynolds also is making $195 million in federal aid available to Iowans who have struggled to pay their rent, mortgages or utilities during the coronavirus outbreak. The state also helps poor families cover their utility bills through its Low-Income Home Energy Assistance Program, often referred to as LiHeap.