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Posted on: March 12, 2021

Natural Gas Pricing Spike Press Release

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News Article 3-12-21
Kris Manderfeld, Utilities Director
Natural Gas Pricing Spike

Natural gas is an integral part of our daily life.  It is used to fuel our furnaces, cook our food, and heat our water for bathing and cleaning, as well as support our district energy (steam heating) system.   We don’t really think about the necessity of having it; we just rely on it.  Recently, during the polar vortex that the Midwest experienced, the need for reliable natural gas came to the forefront.  With extreme cold temperatures in the South, the availability of natural gas across the Midwest was threatened.  Gas wells, power plants and wind turbines experienced freeze outs.   With the constraint in supply and the increase in demand, the price for natural gas skyrocketed.  New Ulm Public Utilities (NUPU) saw the price increase from $2.60/mcf at the beginning of February to over $188.00/mcf by mid-month.   This price increase was not unique to New Ulm but was felt across the greater Midwest. This put a financial burden on our utility and ultimately on our customers.  Fortunately, a portion of the natural gas needed was hedged, meaning it was bought in the past for the future at a fixed price.  This helped absorb some of the impact of the high price.

The cost of natural gas purchased to supply our customers’ needs is a direct pass-through from our supplier to our customers through the purchased gas adjustment.  There is no markup on the cost of natural gas.  At a special New Ulm Public Utilities Commission meeting on Friday, March 5, the Commission authorized the use of $2.6 million of reserves to buy down the rate to be passed on to our customers.  The Commission recognized the hardship this price spike would have on our customers and felt the use of reserves was appropriate to soften the impact.  

Even with the buydown, there will be an impact to customers’ bills.  To help mitigate this impact, the Commission authorized to provide customers the opportunity to set up a contract to spread the payment of the March gas/steam bill over the next five months.  The monthly amount owed under the contract will be the natural gas or steam portion of the bill divided by five months.  To set up a contract, customers should call the Billing office at 507-359-8259 or send an email to  This contract is available to all customers and requires no qualification.

We are asking customers who have their utility bill automatically paid each month via their bank account (ACH payment) and those customers who are under the Budget Billing program to pay special attention to their utility bill they will receive in March (for February usage).  Under the ACH policy, the entire amount of the bill will be withdrawn from the bank account on the due date.  If customers would like to take part in the five-month repayment contract, they will need to contact the Billing office prior to the due date to have the ACH amount changed.   Budget Billing customers will pay their normal budget billing amount due but should monitor their budget excess or shortfall before paying their March bill.  Budget Billing customers also have the option of the five-month contract or to make an extra payment toward their budget balance.

Our customers are important to us.  We hope that the $2.6 million buydown and the contract option will help absorb some of the impact the natural gas crisis has on our customers. We are here for you, our community, to provide reliable, safe and competitive utilities today and tomorrow.

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