Board members

Officers were sworn in during the January 2020 Jefferson Cocke County Utility District Board of Commissioners meeting. From left are board attorney Ben Hooper, III, and commissioners Vice President Craig Kisabeth, President Gary Hammonds, and Secretary/Treasurer Robert Overholt.

NEWPORT—Winter seems to have made itself at home in late January but so far the mild temperatures have favored natural gas users served by Jefferson Cocke County Utility District (JCCUD).

In fact, natural gas (NG) prices fell to lows in mid February not seen in years, said JCCUD General Manager Tommy Bible, who updated commissioners at recent meetings in 2020.

“I never thought in my life I would see $1.75 mcf (thousand cubic feet) gas again,” said Bible. Since then, the NG price has managed a slight bounce to the $1.80 level but quickly fell.

Strong national production and large and growing storage levels have also tightly capped NG prices aided by recent coronavirus concerns.

And when factoring in the district’s pre-pay program, prices average about $1.44 mcf at the low point. This is immediately showing up in lower customer bills, he said. “They see it right now.”

NG prices settled at $2.16 mcf on the NYMEX (New York Mercantile Exchange) market for early January. In 2019 that figure was $3.64 mcf. And in Dec. 2019 NG spiked to $4.76 mcf.

A contributing factor to near-record high storage is weather. December came in 31 percent warmer than normal. January was 41 percent above normal and the trend continued into February. Feb is expected to be 12-14 percent warmer than normal.

But late February saw a significant cooling. “We aren’t able to take gas out of storage due to the warm weather,” he said. “Usually gas utilities sell the bulk of their stored gas during the winter and start refilling in early April into the summer.”

Despite the warm trend, JCCUD will be forced to withdraw stored gas and sell it to customers this summer. “We have to have some place to move the gas we are committed to purchase.”

Bible did not go into detail on the impact that the early 2021 closing of ConAgra will have on the utility but said, “Commissioners are working on a plan to deal with the lower revenues by reducing our operation costs.”

Commissioners will watch gas storage levels this summer in light of the Newport ConAgra plant closing. “If they shut down production early, we will have to have someplace to move NG.”

Sounding a positive note, Bible said, “We will be OK. The commission has done a great job. We will cut costs rather than increase rates to customers.”

A bit of good news came when United Utilities announced to its members, including JCCUD, a refund because of an operational flow order to the tune of $52,494. JCCUD’s share will be $15,265.

Even with mild winter temperatures reducing the need for NG and propane heating, NG sales have been high. Mcf sales year to date April 2019 through Dec. 2019 reached 1,752,649 mc. Industry accounted for 61 percent usage of that total.

At the end of Dec. JCCUD served 7,976 NG customers and 5,063 propane customers.

Temperatures in most of the deep south states in February experienced normal temperatures. Forecasters predict above normal temperatures through April in East Tenn.

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