ALTAMONT, Kan. – Officials in Altamont, Kansas have been working almost non-stop, trying to keep gas flowing into the city — and avoid a crisis.
On Tuesday, the city’s natural gas supply was reduced by 26 percent.
“So to maintain our gas flow into the city, we’re actually using 25 percent of our reserves to, you know, keep that volume at 100 percent,” says Altamont Police Chief and Public Information Officer Michael Shields.
On February 15th, the city made a post on Facebook, saying that Southern Star would be “cutting our volume by 26 percent.” Meaning there would be 26 percent less natural gas coming to the city from the supplier.
But, Southern Star Central Gas Pipeline tells us that they weren’t responsible for the decrease.
“Southern Star is solely a transporter of natural gas. To clarify, our company does not sell natural gas itself. Unlike rates for natural gas supply which are set by the market, our rates for transportation and storage services are established and capped by the Federal Energy Regulatory Commission,” Southern Star tells us in a statement.
“Southern Star holds several transportation and storage contracts with companies like Kansas Municipal Gas Agency, which is the contract holder with the city of Altamont,” says Tyler McClure, Communications Specialist with Southern Star.
The city has since changed the Facebook post, removing Southern Star from the post. We asked Shields if it was in fact the Kansas Municipal Gas Agency that initiated the reduction, but he wasn’t sure. We also reached out to KMGA, but did not hear back.
The city is asking residents to reduce their natural gas usage — since their reserves can only go so far. But reduced supply isn’t the only issue.
“The gas prices over the last few days have gone up almost 200 times their normal price,” says Shields.
Shields says they’ve seen prices go from around three dollars per MMbtu unit, to more than 200 dollars per MMbtu. That means the city’s gas bill, for just one month, would be around half a million dollars — close to their budget for natural gas for an entire year.
“With any small city, it’s gonna be a financial strain on us,” says Shields. “But we will do everything, and have been doing everything we can to figure out the finances to continue to do this.”
Shields says they are currently in communication with KMGA to try and figure out a plan for the large payment — and the city is trying to avoid passing the increased cost down to residents.
Kansas State Representative Ken Collins says it’s an issue that’s not unique to Altamont.
“The wholesale price of natural gas has spiked like over a hundred times. That’s not a hundred percent, that’s a hundred times. That’s really put a big strain on some towns that have municipal natural gas. Altamont’s not in my district, but Uniontown and Mulberry both are. And that’s gonna lead to situations like what’s going on in Altamont right now where they are in jeopardy of loosing their natural gas supply,” says Collins. “The suppliers like to have their money up front, and if they don’t get it, then they aren’t gonna let the municipalities have the gas.”
On February 14th, Kansas Governor Laura Kelly signed a state of disaster emergency declaration for the state, but Collins says that has more to do with electricity — and less to do with natural gas.
“Like I said, electric’s a big problem. I’m not discounting that at all. But, the natural gas supply right now is a big factor,” says Collins. “A lot of this, I was told, is because of natural gas wells in Texas that don’t normally freeze up are frozen up. And, you know, the way that market goes who knows if the prices will come down… usually they come down slower than they went up.”
Shields says that they want residents to hope for the best, but prepare for the worst, in case their natural gas to the city is shut down — something that would be out of their control.
“We feel very good that we’re going to be able to maintain this. But, you know, it’s a day by day situation,” says Shields. “We’re gonna do everything we can to keep it going. But at this point in time, we don’t know what the price is gonna be. We won’t know until this cooperative [KMGA] corresponds with us.”
The City of Altamont held a public meeting Tuesday evening to discuss the issue, also streaming it live on Facebook. (City of Altamont Facebook, watch Video here).