Snow falls on a school crossing sign in Kansas City on Oct. 26, 2020. Carlos Moreno
By BRIAN GRIMMETT
Kansas News Service
In a typical February, the small Wabaunsee school district just west of Topeka pays a natural gas utility bill of about $4,300. This year its bill was more than $53,000.
not because classrooms were cranking up the heat. Wabaunsee is just one
of hundreds of school districts in Kansas hit by an unprecedented spike
in wholesale natural gas prices during February’s record-setting winter
storm. Now the state is stepping in with $20 million in loans to help.
a lot of districts you’re talking about their entire annual budget for
natural gas being used really to pay for an eight-day period,” said
Austin Harris, the director of member engagement at the Kansas
Association of School Boards.
During those eight days,
temperatures across much of the state and central part of the United
States reached well below zero. Wichita, for example, set a record for
consecutive days with a high below 20 degrees.
The extreme cold
not only increased the demand for natural gas, but also broke some of
the infrastructure that transports the gas to customers. This created a
huge imbalance in the supply of natural gas and the demand.
the height of the winter storm, the wholesale natural gas price went
from about $2.50 per unit to more than $650 per unit.
“No one anywhere could have anticipated that kind of an increase,” Kansas State Treasurer Lynn Rogers said.
spike caused businesses, school districts and cities exposed to
wholesale prices to see their bills increase 10 to 15 times normal. Many
smaller cities can’t afford that.
The Legislature quickly passed a plan
making $100 million dollars available in low interest loans to the
cities impacted. They’ve issued about $80 million dollars so far.
State officials are now using the remaining $20 million of that fund to open up loans to school districts and businesses.
loans would be issued by local banks, but funded by the state. School
districts and businesses can get as much as $500,000 to be paid back
within three years.
“These loans are going to be paid back, the
state is not going to be at risk,” Rogers said. “But it is an issue that
we don’t have a lot of resources to keep doing this each and every
Even with the loan programs, the spike in natural gas
prices will have long-lasting impacts. The Wabaunsee school district
said even with spreading out the extra cost over several years, it has
to pay $1,000 more a month than usual. That’s real money for a small
district of about 450 students.
Larger school districts aren’t immune, either. The Lawrence School District
saw its bill go from $54,000 to $498,000. A district spokeswoman said
it is currently in negotiations with its supplier for price reductions.
Because there is potential for a lawsuit, she wouldn’t comment any
Harris said figuring all of this out will be a slow process for some districts and could last through the end of the year.
“Everyone is kind of scrambling to figure out how they cover the costs,” Harris said, “and what resources are available.”
Kansas attorney general has opened an investigation into whether
natural gas companies illegally price gouged during the winter storm and
took advantage of customers during a time of emergency.
really on the shoulders of the attorney general to make sure that this
doesn’t happen again,” Rogers said, “and the folks that gouged will be
paying for this or pay us back.”
Brian Grimmett reports on
the environment, energy and natural resources for KMUW in Wichita and
the Kansas News Service. You can follow him on Twitter @briangrimmett or email him at [email protected]