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For many Fort Dodge residents, looking at their heating bills this winter was enough to make them sweat.
A resident was billed $422.45 for the month of December 2021. This same resident was billed $181.17 in December 2020.
The culprit for the sharp increase is the cost of natural gas. The demands are high globally. As a result, local residents are seeing their bank accounts shrink.
Iowa’s average residential gas bill from December 2020 to December 2021 increased 106%, according to Geoff Greenwood, media relations manager for MidAmerican Energy Co.
In December 2020, the average residential gas bill in Iowa was $56.54. In December 2021, this number increased to $116.32.
But Greenwood said the increases 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,” said Greenwood. “It came to fruition.”
MidAmerican predicted that customers would see a 50-100% increase during the winter heating season. That remains to be seen as winter continues.
“It will fluctuate from month to month,” said Greenwood. “It depends on the cost of gas (gas supply fee) and also how much you use.”
Greenwood said the price that changed on customer bills is the supply charge.
“The supply charge on the invoice is the cost of the purchased gas that we deliver to you”, said Greenwood. “It’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, a number of factors have contributed to the high cost of natural gas. However, much of it can be attributed to the COVID-19 pandemic.
“At the start of the pandemic in 2020, for example, there were factories closed or drastically reduced in their production”, said Greenwood. “Companies were closed and customers weren’t using nearly as much natural gas. Fast forward to this year, businesses are open, factories are open, and customers are using a lot more natural gas. »
In fact, natural gas prices in the United States were lower than they had been in decades in 2020.
“A little over a year ago, when demand was down, there was really a glut of natural gas supply and prices were really cheap,” said Greenwood. “The cheapest they’ve been in years.”
But that trend has been flipped on its proverbial head.
“This year, at the start of this winter heating season, prices were the highest since the 2007 heating season,” said Greenwood.
Extreme weather events like Hurricane Ida also impacted prices.
“Global demand for gas has increased and the United States is exporting more gas than it ever has,” said Greenwood. “We had a hurricane in the Gulf of Mexico, and it damaged production facilities in the gulf, which hurt production and supply at the start of this winter heating season.”
In Iowa, Greenwood said gas was still paid for when it was used in February.
“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 States,” said Greenwood. “Market prices have gone up. We’ve worked with the Iowa Utilities Board to help minimize the financial impact on customers for February 2021. This cost recovery period has been extended to over 12 months, so we’re paying for usage from February through April . This is part of the gas supply charge.
Higher heating bills, coupled with higher grocery and gas pump costs, are leaving many working-class residents financially stressed.
Inflation rose to 5.5% between December 2020 and December 2021 – the biggest annual jump since February 1991, according to published information.
The food price index rose 6.3%. The energy cost index has increased by 29.3% over the past year.
Greenwood urges any customer feeling financial pressure about their utility bill to contact MidAmerican.
“Any customer who feels financial pressure and is unsure how they will pay their electricity bill should contact us,” said Greenwood. “Please contact us if you are concerned that you may not be able to pay your electricity bill. We will make every reasonable effort to work with you to get through this heating season.”
High natural gas prices are expected to persist for some time, but prices are difficult to predict.
“It’s really hard to say because trying to predict the future is futile,” said Greenwood. “It’s 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 can change depending on an extreme weather event or if it gets much warmer in the area. If it is colder, the demand increases and the price increases. If it is warmer, the demand drops and the price drops.
Some MidAmerican recommendations for reducing energy consumption:
• Service your furnace if needed.
• Change your furnace filter.
• Set the furnace to 68 while you’re awake and set it lower when you’re sleeping or away from home.
• Seal all air leaks in windows and doors.
• Call a contractor to see if you need additional insulation.
Visit midamericanenergy.com/homecheck to access a free assessment tool. Those who complete the assessment for the first time will receive a free home kit with products to help you save energy.