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Utilities

Posted on: March 14, 2021

February Arctic Freeze to Affect Las Cruces Utilities Customer Bills

Gas Meter

By G. H. Scott 

Published in the Las Cruces Sun-News 3/14/21

Due to the extremely cold temperatures in mid-February, Las Cruces Utilities (LCU) is taking steps to insulate customers from significantly higher natural gas bills. Because of pro-active efforts taken by LCU’s team, utility customers did not experience any loss of heat that neighboring Texas experienced during the historic cold snap, but the financial impact is still being calculated by LCU.

Currently LCU is looking for ways to lessen the impact of the natural gas cost increase on customers. Instead of billing customers the entire cost impact of the deep freeze, which could create financial hardships, LCU is considering spreading out the cost recovery over the next 24 to 36 months. “The recovery of the arctic freeze gas commodity price hike cost will be managed for recovery over a period of time,” said Jose Provencio, LCU deputy director Business Services. “Customers will start to notice a modest increase in the upcoming April monthly bill or in May at the latest,” added Provencio.

LCU supplies natural gas to its customers as a pass-through cost without a mark-up or profit. The cold snap during Valentine’s Day weekend set off a domino effect: the extreme temperature drops in the region led to unusually strong winter demand and caused infrastructure freezing at the Permian Basin processing plants. This resulted in a sudden decrease in natural gas production, which caused extreme market price jumps that substantially increased the costs LCU paid for the commodity.

LCU is still determining the final natural gas cost to cover the increased demand and prices. The natural gas charges on a customer’s monthly bill reflect both the cost of gas LCU purchases from suppliers and the amount of energy a customer uses. While the impact to customers will vary depending on their energy usage, most customers will see cost increases due to the natural gas market price spikes.

“Despite all those factors, which was a massive upheaval and hampered the delivery of gas, we were able to ensure that all our customers’ heating demands were met. We didn’t have any outages and that is the good news,” said Provencio. 

LCU was prepared for the storm and ready to supply natural gas to customers; however, the inflated prices, which began Friday, February 12th and continued through the following Thursday, February 18th, were unexpected and unprecedented. During that period, the skyrocketing prices rolled throughout the entire Southwest region stretching into the Midwest and South. 

“Because we are a City-owned utility, our goal is to provide affordable, reliable energy to our customers. We’re doing everything we can and exploring every formula to lessen the financial burden on our customers,” said Provencio. 

LCU will continue to update customers regarding gas costs on their monthly bills. For more information call Customer Central at 541-2111.

You can reach LCU at 528-3500, 8 a.m. - 5 p.m. Monday through Friday. LCU provides GAS – WATER – WASTEWATER – SOLID WASTE services to approximately 100,000 Las Cruces residents and businesses.

CAPTION:

PHOTO 1: LCU residential gas meter, customers will see a modest increase in their Utility bill for natural gas in coming months.

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