Fulton's utility board is urging the City Council to begin rebuilding reserves in the city's natural gas fund after a recent price spike depleted it by about two-thirds.
During Monday's meeting, utility board members present unanimously approved a motion proposed by member Whit McCoskrie. (All members were present aside from Charles Williams.) The motion encouraged the City Council to be prepared to rebuild financial reserves in preparation for a similar event within the next three years.
McCoskrie noted that current climate science predicts more extremes in weather in the future: Summers will get hotter and winters, colder, with wild weather events year-round.
"This is something we could expect to occur more frequently," McCoskrie said.
Even if the weather cooperates, Fulton Director of Administration Bill Johnson said other unexpected events could deplete the reserves — for example, a break along the pipeline that brings Fulton's natural gas into town.
On Feb. 13, frozen infrastructure in states such as Texas and Oklahoma, coupled with increased demand, led to the price of natural gas spiking up to $224.56 per unit. Fulton was locked in at that price for four days, paying around an extra $680,000 per day. Since then, prices have dropped to levels approaching the pre-crisis amounts: From $129.39 on Feb. 17 to $23.39 on Feb. 18, down to $6.27 on Friday and $4.10 over the weekend.
But that brief, sky-high spike was enough to deplete Fulton's natural gas fund reserves from $5 million down to between $1.5 and $1.8 million — the total cost is still being calculated.
Electricity prices also went up, Utilities Superintendent Darrell Dunlap said, though not by nearly as much. Between Feb. 12 and Monday, the city paid an additional $169,000 for electricity.
"It's not horrible; it's livable," he said.
As Johnson explained, Fulton having that reserve fund is what allowed the town to avoid passing those prices directly on to customers. Not every town in the region was as well-prepared, he said.
"I have no intention to ask the city council to push all that off on customers," he added.
Utility board members agreed it was important to rebuild the reserve to some extent so Fulton's prepared to face its next challenge.
"The gas fund hasn't been building a lot in the last several years," Johnson said. "The city has been avoiding passing some costs on to customers. How we get there would involve a rate increase."
No goal reserve amount has yet been established, nor has an exact rate hike been proposed. Johnson estimated that raising consumer prices by 10 cents per 100 cubic feet of natural gas — and putting that extra money directly into reserves — would raise about $2.1 million across three years.
"The average natural gas bill would go up by $26 a month," he said. "All that makes the assumption that natural gas goes back to its normal $2.50, $3 per unit. There's so many unknowns we're discussing here.
Discussion on the matter will continue during tonight's Fulton City Council meeting. The meeting begins at 6:30 p.m. at Fulton City Hall (18 E. 4th St.). Meetings are open to the public, but seating is limited due to social distancing requirements. Meetings are also live streamed at fultonmo.org and the city's YouTube channel.