City-Owned Utility Taking Steps to Mitigate Expense
Due to the extremely cold temperatures in mid-February, Las Cruces Utilities (LCU) is taking steps to insulate customers from higher natural gas bills due to the historic “arctic freeze” that affected the Southwest.
However, because of the proactive efforts of the LCU team, customers did not experience a loss of gas service during the unusually fierce cold snap.
LCU is taking steps so customers receive reasonable monthly bills by spreading the cost increase through the next 24 to 36 months instead of billing it all at once. Customers will begin seeing a modest increase on the April bill, or May bill at the latest.
“We are mindful that our customers are not expecting a jump in their bills, we’re doing everything we can to soften the financial impact to our customers,” said Jose Provencio, LCU deputy director Business Services.
LCU supplies gas to its customers as a pass-through cost without a mark-up or profit. The cold snap during Valentine’s Day weekend set off a domino effect: the extreme temperature drops in the region led to unusually strong winter demand and caused infrastructure freezing at the Permian Basin processing plants. This resulted in a sudden decrease in natural gas production, which caused extreme market price jumps that substantially increased the price not only for LCU but any entity purchasing gas.
LCU is still determining the final natural gas cost to cover the increased demand and prices. The natural gas charges on a customer’s monthly bill reflect both the cost of the fuel LCU purchases from suppliers and the amount of energy a customer uses. While the impact to customers will vary depending on their energy usage, most customers will see cost increases due to the natural gas market price spikes.
“Despite all those factors, which was a massive upheaval and hampered the delivery of gas from our suppliers, we were able to ensure that all our customers’ heating demands were met. We didn’t have any outages and that is the good news,” Provencio said.
LCU was prepared for the storm and ready to supply natural gas to customers; however, the market prices, which began Friday, February 12 and continued through the following Thursday, February 18, were unprecedented. During that period, the skyrocketing prices rolled throughout the entire Southwest stretching into the Midwest and South. “We expect gas prices to increase some during the winter, but this was a rare combination of events, causing a financial ripple effect across the region,” Provencio said.
LCU will continue to update customers regarding gas costs on their monthly bills. For information and updates, visit the LCU website or call customer service at 575/541-2111. The TTY number is 575/541-2182.