Central Illinois residents can expect higher natural gas bills this winter
Natural gas customers in Morton and across the Tri-County should expect significantly higher heating bills this winter.
Morton public works director Craig Loudermilk said the village’s municipal-owned gas company faces increased supply costs as the foreign market for liquefied natural gas (LNG) drives prices higher, an expense that will be reflected in residents’ utility bills.
“I would expect — and I've done a lot of calculations, obviously with a lot of assumptions in there — that you'll be (paying) 30% more is my estimate at this point than your winter 2020 bill on the natural gas portion,” said Loudermilk.
With the European and Asian LNG markets ranging between four and six times American prices, Loudermilk said pressure is on the U.S. to maximize exports and increase prices.
Loudermilk said he “100 percent” expects other natural gas providers in Illinois to pass their higher costs onto the consumers as well, noting natural gas storage levels and weather conditions also will be major factors in the prices.
He said in order for Morton to keep the higher costs at a minimum, and to guard against spikes, the village has “hedged” — or fixed its purchase price — for 60% of its estimated volume for November through March, and is looking to increase that percentage.
“We have a contract for storage in Oklahoma and I have access to that,” he said. “That will allow us another fixed of 10-15%. So right now we're headed 70-75%, and potentially looking to hedge another 10-15 to get us to 90%.”
With mild temperatures forecast for the region through the end of October, Loudermilk believes that will help the storage levels remain in their five-year average range.
Loudermilk said 2020 saw some of the lowest gas prices in more than a decade, and the rates have been fairly reasonable for about 13 years.
“On a gas commodity price, we're still $2-$3 below what we were at in that 2008-09 area,” said Loudermilk. “So we've had a heck of a run with gas prices being very low. Obviously, at some point that was going to come to an end. We hope this is not the end.”