Extreme winter weather conditions have been the root of many problems this year from hazardous driving conditions to higher heating bills. The City of Perryville is dealing with yet another negative side effect of this harsh winter. Perryville City Administrator Brent Buerck reported during the Feb. 18 City Council meeting that the city had violated their natural gas usage contract for the first time ever, and would have to pay $38,000 in overage use charges.
The City receives natural gas from the Natural Gas Pipeline of America. A company called Kinder Morgan manages the NGPL. Natural gas is measured in units of dekatherms. The city has a contract with Kinder Morgan for 6, 475 dekatherms per day at a rate of $4.39 per dekatherm. That rate is locked in for up to 6,475 dekatherms. If that amount is exceeded any additional gas usage is charged at $4.65 per unit, which is .26 cents higher than the usual rate. “Even with the penalty Perryville residents are still paying less the regional rate of $4.81 per dekatherm,” Buerck said.
Perryville City Mayor Debbie Gahan questioned if the city should raise there contractual rate so another violation did not occurred in the future.
“Do we need to purchase more?” Gahan said.
Buerck said he didn’t think it would be necessary to purchase additional fuel in the future.
“I don’t believe that we need to purchase more. We are not the only city that went over the contracted amount this year. The overages occurred during a period of four days when at times temperatures were negative 10 below. There are many instances when the city does not even come close to using the allotted amount. In December of 2012 the city barely used one-third of the amount contracted,” Buerck said.
“It would cost the City more money to contract the purchase additional dekatherms at $4.39 than it would to take the occasional penalty and pay the .26 cent overage fee,” Buerck said.
The additional costs will not affect the City’s budget. “The fees are spread out among users,” said Buerck.