Lapel residents feeling the heat after utility company hikes prices

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LAPEL, Ind. — A small town in Madison County is facing a big hike in their utility bill.

Lapel Indiana is one of 32 small gas utilities in the state. On February 13, the town was contacted by their supplier telling them to inform residents to conserve gas by reducing temperatures in homes and businesses.

The temperatures at the time were dipping down to single digits, even at times going below zero. From the time the town received the notice until the end of the month, the average high was 35°F while the average low was 21° F.

The gas supplier informed the town that the request was due to increased demand due to the polar vortex that devastated Texas and caused shutdowns to oil refineries and natural gas wells across the state.

On Thursday, Chad Blake, the town council president in Lapel announced that the town received a bill for nearly $500,000. This is nearly $200,000 more than the town projected for the entire year.

Part of the bill comes from a spike in the market rate for natural gas. Blake explained that many gas utilities, including Lapel, work with suppliers to buy gas in advance at discounted rates. Once this is used, they make incremental purchases at the current market rate.

During the polar vortex, Blake explains that prices spiked as high as $1,100 per unit compared to the average $2-$3 unit rate that Lapel usually has. Blake said this is the first time in history that an event caused a spike like this in Lapel.

Blake said the gouging took place the week of the 14th, costing the town $424,000. They did not learn about the cost until the 24th.

This is something that is being examined on the national level. Senator Tina Smith (D-Minn.) on February 20 called for a federal investigation into possible price gouging in the Midwest and other regions.

In Winfield, Kansas, the AP says the city manager reported that a unit of natural gas that sold for about $3 earlier this month sold for more than $400 on Thursday. In Morton, Illinois, officials reported that gas normally sold for about $3 per unit cost nearly $225 as demand soared because of the deep freeze.

A spokesman for the American Gas Association, which represents more than 200 local energy companies, said Feb. 14 and 15 set a record for the largest natural gas demand in U.S. history over a two-day period.

Indiana Attorney General Todd Rokita said they are aware of the situation in Lapel and the Consumer Protection Division reached out with information about how to file a complaint.

“Unfortunately, as many of you have already noticed, when you see your bill you will see some very uncomfortable numbers on your gas bill,” Blake said. “We understand fully that many of our residents and businesses will not have the means necessary to pay this bill on the due date.”

The town is working with several agencies to try to get funding to cover these unexpected expenses and is allowing residents and businesses up to nine months to arrange a payment plan for the gas bill.

“Ultimately, our goal is the state and federal agencies, along with our legal team, will be successful and a settlement will be reached with the gas supplier that allows us to issue refunds to all of our customers,” Blake said. “While this is our goal, unfortunately, there is no guarantee that this will happen.”

Blake said the town is involved in a lawsuit with several other towns against the Panhandle Eastern Pipeline (PEPL), the company that transports the gas the town uses. Blake claims in March 2020, PEPL instituted an increase in transport fee that targeted the smallest users on their pipeline.

The towns that are involved in the lawsuit include:

  • Auburn, IL
  • Bainbridge, IN
  • Divernon, IL
  • Herman, MO
  • Lapel, IN
  • Macon, MO
  • Montgomery City, MO
  • Morton, IL
  • Pawnee, IL
  • Pittsboro, IN
  • Roachdale, IN
  • White Hall, IL
  • Winchester, IL

Blake said the rate has returned to normal, so future bills should be in the expected range. Going forward, they will review with the gas management company how they purchase gas.

Customers can go to the town hall, call or email them to arrange a payment plan. If people do not, they will expect the balance due on the due date. To learn how to get in touch, visit the town’s website.

The Indiana Attorney General’s office encourages residents to file a complaint with their office as well.

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