Natural gas company ends supply to Colorado
DENVER (AP) Western Natural Gas’s abrupt decision to stop serving the Colorado market has its customers scrambling to find replacement supplies.
About 30 commercial customers had locked in low-price contracts with the Texas-based gas supplier, but now Western Natural Gas officials say rising natural gas costs have made it financially impossible to sell gas at prices specified in the contracts.
Some customers including the city and county of Denver, numerous school districts and Eastman Kodak Co. in Windsor have asked their lawyers to make sure Western Natural Gas makes up the difference in costs for them to get gas from other suppliers.
”One of our primary jobs is to protect the financial situation for the citizens of Denver,” said Darryl Winer, director of utilities for the city.
Dennis McLaughlin, the Colorado division manager for Western Gas, said the company had no choice when it told customers Dec. 20 that it was selling its Colorado retail gas business and terminating its Colorado fixed-price gas retail business.
”The price of natural gas has gone from about $2 (per million British thermal units) last year to about $10 currently,” McLaughlin said. ”We’re a small, private company, and the problem is that the (letters of credit) we’re required to put up to obtain the (gas) supply exceed our financial capacity.”
Many Western Natural Gas customers said they had locked in prices at under $3 per million Btu.
Customers have been given the option to switch to Xcel Energy, with Western Gas paying the difference between its prices and the $5.85 per million Btu that Xcel charges.
Xcel is seeking permission for a rate increase that would raise the price to about $8.60 per million Btu.
Rick Collier, director of facilities support for the Cherry Creek school district, said the district’s attorney is negotiating with Western Natural Gas to make sure Cherry Creek will recover all its excess costs. Cherry Creek had budgeted about $660,000 for natural gas.
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