Statement of Jim Zakoura, attorney and consumer advocate, Smithyman & Zakoura, Chartered, on behalf of the Natural Gas Transportation Customer Coalition (NGTCC):
In Kansas and Kansas City Metro, Evergy estimates for the coming calendar year, estimated electric generation fuel costs and purchased power costs. The estimate is “trued up” as to actual costs and volumes sold, on April 1 of each year – the “actual cost adjustment.”
The material escalation of natural gas costs over the last couple of months, will likely cause earlier estimates of electric costs, to be lower than the actual costs for 2022 – causing a material upward adjustment in electric costs on April 1, 2023 (a “catch up” of actual costs.)
Increased natural gas prices will likely drive 2 outcomes: (i) higher electric prices because of higher fuel costs of natural gas fired electric generation; and (ii) increased coal fired electric generation, to moderate / lessen the use and costs on natural gas.
Because of seasonality of wind, there is less wind energy available in the summer, as compared to the spring.
Increased natural gas costs for electric generation – NYMEX Henry Hub Futures Contract (see screen shot). End of Day – Settlement Price on NYMEX in “Blue.”
Summer prices:
May 2021 – $2.74 per MMBtu
May 2022 – $7.58 per MMBtu ($7.76 per MMBtu) ($7.82 / MMBtu)
June 2021 – $3.09 per MMBtu
June 2022 – $7.70 per MMBtu ($7.89 per MMBtu) ($7.95 / MMBtu)
July 2021 – $3.70 per MMBtu
July 2022 – $7.78 per MMBtu ($7.97 per MMBtu) ($8.04 / MMBtu)
August 2021 – $4.07 per MMBtu
August 2022 – $7.78 per MMBtu ($7.97 per MMBtu) ($8.03 / MMBtu)
Winter prices:
December 2021 – $4.50 per MMBtu
December 2022 – $8.03 per MMBtu ($8.18 per MMBtu) ($8.26 / MMBtu)
January 2022 – $4.05 per MMBtu
January 2023 – $8.13 per MMBtu ($8.30 per MMBtu) ($8.36 / MMBtu)
