The Kansas Association of School Boards (KASB) reached a settlement with Derby schools’ natural gas provider, Symmetry, over a high winter gas bill –saving the district $96,136.19.
KASB had been negotiating on the district’s behalf to reduce an exorbitantly high gas bill accrued during the extreme cold snap that hit Derby and the surrounding area in February.
During an average winter month, the district pays about $35,000 to $50,000 for natural gas. In February, the bill was $209,595.09, or more than $17 per British Thermal Unit (MMBtu) – a standard unit of measure for natural gas. The settlement brings that down to $113,459.90.
“That is the light at the end of the tunnel for this long coalition and many times up at this podium discussing natural gas,” Finance Director John Regier said at the Derby Board of Education meeting on Sept. 13.
In May, the district contested the high gas prices by joining a natural gas coalition, which included dozens of organizations in both Kansas and Missouri. An anti-profiteering statute in Kansas essentially limits price increases during a disaster to no more than 25% of the price before the emergency. That statute was the legal basis for the coalition.
At that time, the district paid the statutory maximum of $4.57 per MMBtu. It also encumbered money into its contingency reserve, as recommended by auditors and KASB, to cover the invoice. No current-year dollars will be used to cover the difference.
The school board approved the settlement at its meeting on Sept. 13.
The school board also voted on Sept. 13 to approve a contract with a new gas provider after Symmetry, the provider that settled with Derby schools, decided to terminate its contract with Derby schools and all other districts represented by KASB as of Sept. 30.
The district is part of the KASB Energy Management Program – formerly the Kansas Joint Utilities Management Program, or KJUMP – which acts as a natural gas-purchasing cooperative for school districts in the state. The program aims to pool the natural gas needs of its 175 members to “realize savings and energy costs.”
After learning of the contract termination, KASB put together a request to find a new provider for the districts it represents, ultimately selecting WoodRiver Energy. The company was established in 2014 and serves customers in eight states and Canada.
The contract with WoodRiver locks in the natural gas price at $4.26 per MMBtu for five years. Regier said the energy company is somewhat unique in offering five-year price guarantees. Previously, the district was paying for gas based on market prices.
“I just checked the gas futures price for an MMBtu, and it is at the $5.20 mark, so we are underneath the futures price,” Regier said. “And that contract price is set up for the next five years, so no matter what the natural gas price is, we’re paying $4.26 between October 2021 and October 2026.”