The City of Waterloo on Friday announced its plan to tackle an exorbitant natural gas rate charged to the city as a result of a mid-February deep freeze that wreaked havoc in parts of the Midwest.
Beginning on or about Feb. 11, Winter Storm Uri deeply impacted the energy industry throughout the Midwest and Texas, freezing natural gas wellheads and wind turbines and creating a major disruption of energy supply throughout the region. As the storm grew in intensity, the energy situation went from bad to desperate.
Waterloo city officials said that the city received a notice from its natural gas supplier, Symmetry Energy Solutions, the evening of Feb. 12, that the city needed to prepare for possible disruption of gas service.
“It was a disastrous five days,” the City of Waterloo stated in a news release. “As we scrambled to get gas for the city, the temperatures in Waterloo continued to drop and got as cold as -4 degrees. You may remember that Mayor Tom Smith requested that everyone lower their thermostats to 68 degrees to reduce gas consumption.”
Fortunately, the flow of natural gas was not disrupted in Waterloo and city gas customers were able to get all of the natural gas they needed to keep warm.
For those five days, however, the price of natural gas was about 20 times higher than normal. The city’s natural gas bill for the month came in at $1,190,000 when the normal bill would have been around $214,000. This is due to both an extremely high cost of gas as well as penalties imposed by Enable MRT, the interstate pipeline system that delivers gas to Waterloo.
“The city was stunned to receive such an unprecedented bill,” the City of Waterloo news release states. “Our consumption of gas was much higher than normal as a result of the extreme temperatures and the prices were the highest in memory.”
City officials scheduled a committee meeting on the issue, during which it was decided to dispute the February gas bill charges pending further information from the gas supplier and an evaluation of potential legal action.
“As a result, the City of Waterloo is paying our gas supplier only the undisputed portion of the utility bill that is due on March 29 at this time,” the city press release states. “The utility bills that our gas customers received for February, though higher than usual, are significantly lower than they would have been with the full amount paid. We choose to bill our residents at what would have been a somewhat normal rate while we continue to protest the bill from Symmetry and the penalties imposed by Enable MRT.”
The gas committee decided to seek legal advice from a natural gas specialist to review the city’s contracts with its suppliers and develop a plan of action which will include involving the Federal Energy Regulatory Commission and potentially litigation in state court.
“However at this point, we still have a potential liability of almost $1 million in contested fees or approximately $250 per gas customer (4,000 residential gas users),” the City of Waterloo said.
“There is no guarantee that we will succeed in our protests, but we want everyone to know that we are doing everything in our power to protect our residents from these excessive charges. This protest will possibly last a few months and there is no promise that we will be able to reduce our liability. More than likely, we will all see additional fees added to our gas bills in future months. Hopefully, we will be able to get these charges lessened. We will do our best to keep the public informed as we progress through this protest.”
A Symmetry spokesperson offered this comment on the matter.
“The price of natural gas is set by the market, not Symmetry. Symmetry does not produce natural gas. As a retail natural gas marketer, Symmetry incurs supply costs largely at the time of purchase and appropriately passes these costs along to customers per contracts and rate agreements. Symmetry has been, and is, in regular communication with customers regarding natural gas pricing as a result of the severe weather and will continue to work with the industry and with our customers. Importantly, the considerable increase in demand, coupled with a severe reduction in supply, was a market-wide event and virtually all industry participants were impacted – not just Symmetry.”
Symmetry also directed customers to a website on Winter Storm Uri and its impact, which can be accessed by clicking here.