Gas Bills Set Off Fury in Oilton: The Price is Much Higher Than in Nearby Towns. Customers Want an Investigation.
By Russell Ray, Tulsa World, Okla., Tulsa World, Okla.
Dec. 22–OILTON — Patsy Wessel began heating her home with propane last week because her natural gas provider, the city of Oilton, had raised the price of gas to 128 percent higher than current market prices.
Wessel and others in this small town 50 miles west of Tulsa are demanding an investigation into the sudden surge in the cost of natural gas to $32.55 per dekatherm.
Nearby towns are charging their customers substantially less. Customers of Oklahoma Natural Gas Co., the state’s largest gas utility, are paying $11.55 per dekatherm.
“It’s terrible,” Wessel said, adding that many of Oilton’s elderly residents won’t be able to pay the higher rate. “They can barely buy their medicine and eat,” she said.
Gas trading on the New York Mercantile Exchange, the world’s largest energy exchange, closed Wednesday at a price of $14.27 per dekatherm.
Kris Greene, the owner of Oilton’s Cimarron Grill, said her December gas bill was $1,300.
“They won’t even tell us how they figure it,” she said.
The higher cost of gas has forced some Oilton residents to go without food or some other necessity, Greene said.
“The majority of this town is elderly people on Social Security,” she said. “A lot of them are either freezing because they don’t turn their gas on or they’re starving because they paid their gas bill.”
The City Council plans to address the issue at a special meeting scheduled for 7:30 p.m. Thursday at City Hall, 101 W. Main St. The city provides gas to about 600 customers.
“We want an average rate that’s competitive with the other towns,” said Jerry Green, an Oilton businessman.
Green owns a coin-operated laundry, but he had to close it temporarily because of the higher cost of gas.
The controversy erupted when the City Council announced plans last month to raise the per-unit price of gas to $32.55. Green said the council should have recognized the harm that would do to residents and businesses and found a way to limit customers’ costs.
“I feel the city officials were incompetent for sending that bill out,” he said. “Some are trying to decide: ‘Should I heat, or should I eat?’ “
But Shane Woolbright of the Oklahoma Municipal Gas Association said there was nothing crooked about the city’s billing method. However, the billing method could be better, he said.
“The timing of the delivery of their gas bills and the timing of their meter reads don’t match,” Woolbright said.
As a result, Oilton customers are paying for gas they used in previous months. As demand falls, the per-unit price will come down. That’s because the per-unit price is determined by dividing consumption by the amount on the bill the city receives each month from its supplier — The Panoak Group of Tulsa.
“We charge them a market-based price,” Panoak CEO David Harl said.
During months when consumption is low, Woolbright said, customers will pay nothing other than a $3.30 surcharge.
Oilton’s billing system “doesn’t balance out the peaks and valleys,” he said. “The townspeople are paying the actual cost of the delivered gas.
“If the system worked right, the city would have collected $20 from everybody in town last summer when they were collecting $3.”
Also, gas prices have skyrocketed to new highs in recent months, but Oilton’s billing system doesn’t account for the new era of gas pricing, Woolbright said.
Natural gas prices have more than doubled since a year ago.
“We’ve never before had gas prices do this,” Woolbright said. “Oilton has had this process for some time. But in the past, if prices jumped, it might have jumped $2 or $3.”
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