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Posted on: June 6, 2022

Energy Update Shared with City Council

natural gas flame

Forward planning will help buffer Sioux Center Municipal Utilities customers as natural gas prices rise, but higher wholesale costs will still likely have a local impact, according to Utilities Manager Murray Hulstein. Hulstein shared an energy update at the June 6 City Council meeting.

Consumers have been seeing higher energy costs at the gas pump, but other energy prices are also rising. The price of the natural gas that Sioux Center Municipal Utilities purchases for its customers has increased significantly in the past six months, Hulstein said. The increase in price of wholesale natural gas is more than 200% of what it had been at for some time.

“We have locked in favorable prices for a portion of the natural gas used by customers. However, SCMU can’t lock in prices in advance due to fluctuating daily use. Customers can expect the cost of natural gas in Sioux Center to also increase and impact utility bills,” Hulstein said. 

Wholesale market prices and weather are beyond our control, but Sioux Center Municipal Utilities is not increasing delivery cost of bringing natural gas to your home and/or business. 

Hulstein also spoke about how the Sioux Center Electric Department is training in a new preparedness plan. A load shed plan would be enacted if any circumstances – like the recent winter storm Uri – threaten to overwhelm the multi-state power grid. 

“While unlikely, we want to be prepared. We want to inform people about what we’re doing to protect the grid locally and regionally,” Hulstein said.

Sioux Center Municipal Utilities are part of the Southwest Power Pool, a regional organization managing the grid and transmission for all or part of 14 states. As part of this plan, the SPP will notify utilities like Sioux Center if electrical demand could potentially exceed available power resources. 

“In the case of an energy emergency, we would first alert customers that short-term planned power outages are possible, then ask larger customers to switch to standby generation if they have it. Then, if SPP requests it, we would begin these short-term outages in different sections of town, called rolling blackouts. This helps decrease our demand on the grid,” Hulstein said. “If the regional grid goes down, it could be weeks without electricity. This plan is in place so the grid doesn’t go down.”

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