For many Fort Dodge residents, looking at their heating bills this winter has been enough to break a sweat.
A resident was billed $422.45 for the month of December 2021. That same resident was billed $181.17 in December 2020.
The culprit for the big increase is the cost of natural gas. Demands are high on a global scale. As a result, local residents see their bank accounts shrink.
Iowa’s average residential gas bill from December 2020 to December 2021 increased 106 percent, according to Geoff Greenwood, media relations manager for MidAmerican Energy Co.
In December 2020, the average Iowa residential gas bill was $56.54. In December 2021, that number increased to $116.32.
But Greenwood said the raises were anticipated.
“We issued a notice to our customers in October because we could see that we were likely to face very high gas bills this winter heating season.” Greenwood said. “That has come.”
MidAmerican predicted that customers would see a 50 to 100 percent increase over the course of the winter heating season. It remains to be seen as winter continues.
It will fluctuate month to month Greenwood said. “It depends on the cost of gas (charge for gas supply) and also how much you use.”
Greenwood said the price that has changed on customer bills is the supply charge.
“The supply charge on the bill is the cost of the purchased gas that we deliver to you,” Greenwood said. “That’s dollar for dollar what we pay for it. We don’t mark it.
Our rate has not changed. What has changed is the cost of natural gas.”
According to Greenwood, several factors have contributed to the high cost of natural gas. However, much of it can be attributed to the COVID-19 pandemic.
“The beginning of the pandemic in 2020, for example, there were plants closed or drastically cut their production”, Greenwood said. “Businesses were closed and customers weren’t using natural gas as much. Fast forward to this year, businesses are open, plants are open, and customers are using a lot more natural gas.”
In fact, US natural gas prices were the lowest they had been in decades in 2020.
“A little over a year ago, when demand was low, there was really an oversupply of natural gas and prices were really cheap,” Greenwood said. “The cheapest they’ve been in years.”
But that trend has proverbially reversed.
“This year, at the start of this winter heating season, prices were the highest since the 2007 heating season.” Greenwood said.
Extreme weather events like Hurricane Ida have also affected prices.
“Global demand for gas has increased and the US is exporting more gas than ever,” Greenwood said. “We had a hurricane in the Gulf of Mexico and that damaged production facilities in the Gulf, which affected production and supply at the beginning of this winter heating season.”
In Iowa, Greenwood said gas used in February is still being paid for.
“We had a winter storm last February that froze production in Texas and the Gulf states and it was very cold up north and in the plains.” Greenwood said. “Market prices skyrocketed. We are working with the Iowa Board of Public Utilities to help minimize the financial impact on customers by February 2021. That cost recovery period has been extended to more than 12 months, so we are paying for February usage through April. That is part of the gas supply charge.”
Higher heating bills coupled with higher costs at the grocery store and at the gas pump are leaving many working-class residents financially stressed.
Inflation rose to 5.5 percent between December 2020 and December 2021, the biggest annual jump since February 1991, according to published news reports.
The food price index rose 6.3 percent. The energy cost index rose 29.3 percent over the past year.
Greenwood encourages any customer feeling financial pressure from their utility bill to contact MidAmerican.
“Any customer feeling financial pressure and not sure how they will pay their utility bill should contact us.” Greenwood said. “Please contact us if you are concerned about being able to pay your utility bill. We will make every reasonable effort to work with you to get through this heating season.”
The high price of natural gas is likely to remain for a while, but prices are difficult to predict.
“It’s really hard to say because trying to predict the future is useless.” Greenwood said. “It is safe to say that we will see higher natural gas prices for the remainder of the winter heating season. But it is a volatile market and it can change based on an extreme weather event or if it gets much hotter regionally. If it gets colder, the demand goes up and the price goes up. If it’s hotter, demand goes down and the price goes down.”
Some recommendations from MidAmerican to reduce energy use:
• Service your oven if you need it.
• Change your furnace filter.
• Set the heater to 68 when you’re awake and lower it when you’re asleep or away from home.
• Seal any air leaks in windows and doors.
• Call a contractor to see if you need additional insulation.
Go to midamericanenergy.com/homecheck to access a free assessment tool. First-timers who complete the assessment will get a free home kit with products to help you save energy.