Huge Winter Storm Gas Bills Push Cities to the Brink
Alex Brown, 23 March 2021
The tiny city of Denison, Kansas, came to the brink of insolvency so fast last month that its leaders hadn’t figured out how to begin the bankruptcy process.
“We don’t even know how to go under,” said Vickie Wold, the city council president. “How the city fails, what happens here—we’re just hoping and praying.”
Denison has fewer than 200 residents, and in a typical February, the city pays about $4,000 to provide them with natural gas to heat their homes. Last month, the bill came to $242,498.
“We can’t write that check,” Wold said. “There’s no way we can pay that, and we can’t pass it on to these people, some of whom are struggling to keep their utilities paid as it is.”
Many cities in the Midwest are facing a similar crisis. A variety of towns large and small operate their own municipal utilities, providing services such as gas, electricity and water to residents. Some small towns exist as political entities primarily to provide those services.
Much attention has been paid to a relatively small number of Texas customers who received massive gas bills during February’s storm. But in much of the country, municipal gas utilities and natural gas-powered electricity providers are the ones that owe huge amounts of money.
The polar vortex that hit on Presidents Day weekend limited the supply of natural gas, which drove up prices. As infrastructure failed at the same time demand for gas spiked, the cost for natural gas on some pipelines skyrocketed to hundreds of times its typical level, forcing cities and utilities to pay unheard-of prices or let their customers freeze.
