Iowa Cities Affected By Soaring Natural Gas Prices In February Freeze Receive Help From State Farm Forum
The natural gas bill in Brighton, a town of about 750 people in southeast Iowa, was about $ 130,000 more than expected for the February cold snap, the utilities superintendent said Phil Krochak.
“That’s about as much as the city would pay for an entire year,” Krochak said.
Before winter, the city had already frozen prices for an amount of natural gas equal to 101% of what it used in 2020, said Mayor Melvin Rich. But he said demand exploded when temperatures fell to 20 degrees or more below zero, forcing the city to buy more natural gas “at peak prices.”
Those costs are passed on to residents, with average bills rising to $ 750 in February, from around $ 250 the month before, Krochak said. Brighton residents, who have the option to pay the additional cost over a year, reported on Facebook that some bills were over $ 1,000.
Rich said the council emailed Gov. Kim Reynolds and the state’s congressional leaders, asking if small towns like Brighton could receive help. “We have a lot of retirees living on fixed incomes” and residents struggling with unemployment, he said.
The state announced Thursday that it will offer a temporary $ 5 million loan program to help cities. He wants municipal utilities to demonstrate that the loans – 1% interest notes that have to be repaid over three years – will be used to spread costs “so residents don’t see their bills go up aggressively,” he said. said Brian Selinger. , team leader for the Iowa Economic Development Authority.
Rich didn’t expect help. The council wanted to educate state and federal officials about the plight of residents of small, rural Iowa. “There is nothing more we could have done,” said Rich. “We don’t control the weather.”
Other states affected by the freeze have also responded with assistance. Kansas, for example, quickly made $ 100 million in long-term, low-interest loans to cities, some of which were at risk of bankruptcy due to their large natural gas bills.
Reynolds is also making $ 195 million in federal aid available to Iowans who struggled to pay their rent, mortgages or utilities during the coronavirus outbreak. The state also helps poor families cover their utility bills through its Low Income Home Energy Assistance Program, often referred to as LiHeap.