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D161 dodges natural gas price surge caused by cold weather, Texas export stoppage

Some school districts incurred heavy costs in purchasing natural gas in mid-February because of a cold weather surge and related factors, but Flossmoor School District 161 dodged the worst of it through strategic planning.

At a March 22 special meeting of the district’s board of education, Associate Superintendent Frances LaBella said the district’s three-pronged strategy saved the district as much as $82,005, while reports indicate some districts experienced natural gas bills so high during that stretch that they exceeded their entire year’s budget for that resource.

From Feb. 13-19, Nicor declared several “critical days” at the height of cold weather, expecting gas usage to be high with supply low. LaBella said on those days, everyone is required to purchase gas beyond their withdrawal rights at a set price from Nicor that is “generally significantly higher” than the normal contract price. In District 161’s case, the normal price is $.327 per therm, while during those critical days the set price was $5.62 per therm.

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After the critical days, Texas also stopped natural gas from leaving the state while dealing with a crisis related to a cold weather surge there. That kept gas prices at “levels not seen since February 2014,” according to LaBella.

But LaBella said District 161 purchases roughly 60% of its gas at a $.327/therm fixed rate, while the remainder comes from a combination of the spot market or storage, with the district filling up to its 71,360-therm storage capacity during the warm, summer months. The district entered the winter with 98% in storage that had been purchased at an average of $.2706/therm.

The strategy allowed the district to move around its fixed capacity to avoid purchasing gas from Nicor at higher rates during the critical days, LaBella explained. Following those days, the district avoided the higher spot rates by using what it had in storage instead.

LaBella estimated without that strategy in place, the district’s February bill could have been as high as $95,109. Instead, natural gas to cover February cost the district $13,101.

 

Money in the bank

District 161 this week received a check for $44,469.17 from Cook-Illinois, which has a transportation contract with the district.

In April 2020, the board agreed to pay Cook-Illinois 37.5% of the district’s normal rates to help the bus company keep up on bus leases and required staff. But there was a clause in that agreement that required Cook-Illinois to pay back the district if the company received COVID-19 relief funds. The repayment followed the company’s receipt of an Employee Retention Credit under the CARES Act, according to a report from LaBella.

 

Almost there

LaBella provided another construction update related to Trane resolving issues with unit ventilators installed in Flossmoor Hills and Western Avenue Schools. Her report to the board noted she is “happy to report the issues are being resolved.”

As of LaBella’s March 22 report, Trane was expected to have three more days of work to complete its work on unit ventilators. All units are fully functional at this point, and only cosmetic issues remained, LaBella said.

Henry Brothers will be completing other work over spring break that had to be put off while waiting on the univent fixes, LaBella said. That is primarily ceiling work adjacent to the univents. Wold Architects is to do a complete inspection when that work is done, she added.

 

Ready for inspection

The school board voted unanimously to approve an intergovernmental agreement with the Homewood-Flossmoor Park District to allow the district to inspect the playgrounds at all elementary schools. The inspection is to be done at no cost to the district.

The park district is to provide feedback on any items needing repair or other maintenance.

The board previously approved the inspection under the consent agenda at its March 8 meeting, but the park district reportedly asked for the board to approve a waiver of liability.

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