A Northern Natural Gas pipeline rupture on January 16 in the Willow River Area will lead to higher gas prices for Two Harbors utility customers, according to a release from the city.
As a result of the rupture and the sub-zero temperatures, Northern Natural Gas issued a Force Majeure and System Overrun Limit, impacting about 25% of the city’s previously contracted gas volume.
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The city replaced that portion with alternative sources at a slight cost increase for Monday and Tuesday, January 19 and 20. However, prices are expected to rise significantly over the weekend as below-zero temperatures are forecast to last through Monday. To manage costs, the city purchased additional gas for Thursday, January 22, through Saturday, January 31.
“Although these purchases came at a higher cost compared to previously hedged supply, they remain substantially lower than purchasing only for the weekend or relying on spot gas for the remainder of the cold spell,” explained the release from the city. “During significant cold- weather events, natural gas prices can be extremely volatile, which is why securing supply through the end of the month was the prudent choice.
These issues are affecting other natural utilities as well and not just Two Harbors, according to release. Northern Natural Gas is installing a temporary line until permanent repairs have been made.
“Unfortunately, this situation is beyond our control,” said a representative from the city. “Please be assured we are doing our best to keep our pricing as low as possible for our customers.”
More information can be found here.
