For residents of Memphis and Libi County, natural gas can be hot, long and expensive winters.
Memphis, the city’s utility, warns that light, gas and water, natural gas bills will increase by 20 to 30% this summer due to a shortage of essential fuel.
The utility’s gas portfolio management supervisor, Jeff Sissom, said a particularly cold winter could force the utility to buy more natural gas than natural prices, leading to higher utility bills.
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In Europe, which relies heavily on imported natural gas, there are fears that some countries and regions will be short of natural gas to survive the winter. Countries are burning closed coal plants. Estimates for the United States, the world’s largest natural gas producer, are not so strong.
One third said there was no risk of MLGW ending.
“We have a lot of natural gas. That is our first mission, we have a lot of natural gas for years and years and years. We always do. Even if we don’t, we can get more capacity or more volume from pipelines and suppliers. ”
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High utility costs can be a problem for Memphis rate payers. At a high level of poverty, the city is struggling with high energy loads – utility bills account for an disproportionate percentage of people’s income.
If MLGW’s forecasts are high, it means that many people are relying on the prestigious aid offered by organizations such as the Memphis-Religious Association, also known as MIFA.
Mary Hamlet, vice president of MIFA Family Programs, said she was concerned about the proposed MLGW price increase. He said higher gas bills could force more families to seek help with MIFA.
“Unless we can get a lot of donations, which we, like Winter, do, we will leave some of our families without resources,” says Hamlet. They said.
How your gas bill works and why it might be expensive this summer
Residential MLGW customers will be charged at one ccf – or 100 cubic feet – of natural gas at the same time. The bills include two rates for gas – one is adjusted, the second is a purchased gas adjustment. That purchased gas adjustment could increase the gas portion of residents’ MLGW accounts next winter.
By 2021, gas purchases on MLGW accounts are steadily rising. In mid-February it was negative for gas meters, which meant that gas prices were cheap enough, and MLGW customers received nine cents in CCF credit. For the meter readings in mid-September, the most recent full month was 11 ccf per ccf. That’s a 20-cent swing in just over six months.
“It’s really a combination of two things that drive the customer’s account. The purchased gas regulator reflects the value of the molecule.
One-third said that most residents’ bills are consumed and that people sometimes overheat.
“Most of the time, people are always on the run, whether they want to or not, whether they want to or not. And then you will be surprised when you get a bill… .It is very high. Well, one of the main reasons is so high, no matter how expensive they are, they don’t work hard to control the amount of burns. ”
Most of MLGW’s natural gas has already been purchased through long-term purchase contracts, according to the utility’s financial documents.
These terms will continue in some cases until 2026 and in others in 2028. MLGW can purchase and pay for natural gas through a variety of purchase contracts at reduced market prices.
By email, MLGV said on Tuesday that about 78% of its natural gas supply was secured by long-term contracts and not 22%. That could boost 22% of customer accounts.
“Approximately 22% of MLGW customers purchase gas short-term (daily) contracts based on the average winter. Short-term (daily) purchases are highly dependent on the weather,” the utility says. The planned percentage increase is comparable to last winter and is mainly driven by the planned increase in natural gas prices.
And it’s not just residents’ gas bills that could rise this summer. MLGW Electricity customers will receive a flat rate of electricity and fuel costs per kilowatt hour by Tennessee Valley Authority. That fuel cost adjustment will help TVA cover the cost of fuel purchased for its power plants.
While TVA, like other utilities, is taking steps to eliminate some of the coal plants, the federal-owned power company is adding about a quarter of its natural gas to natural gas.
In an e-mail, TVA spokesman Scott Brooks said:
Given the forecast of homes with electric heating in Memphis, that price adjustment could also be expensive. And on MLGW accounts, such as natural gas purchases, oil prices will also rise in 2021.
At the beginning of 2021, the price of TV oil was about 1.6 cents per kilowatt hour. For the meters read in mid-September, it was 2.04 cents per kilogram, down from August.
Samuel Hardiman covers Memphis City Administration and Politics for Business Appeal. It can be reached by email at firstname.lastname@example.org or by following @samhardiman on Twitter.