During their Nov. 7 meeting, City Commissioners will consider extending their natural gas supply contract with Energy West for a year.

In November 2017, the city retained Jim Morin as its energy consultant. He evaluated the city’s current natural gas supply contract and recommended extending its current contract, according to city staff.

The city entered into the contract on Nov. 1, 2017, which expired Oct. 31, 2022.

Morin evaluated the city’s natural gas supply options in 2022.

City approves new energy contract as costs rise

Due to limited supply options in the natural gas supply market, the volatility of the gas pricing since the beginning of 2021, and the city’s volume needs, the city didn’t have the option didn’t have to the option of a fixed price option, according to the city staff report.

There were also limited term options.

Energy West forwarded a price offer to the city for a one or two year term option on the industry index plus $0.65/Mmbtu.

City to consider natural gas contract extension [2017]

After reviewing the city’s options, Morin recommended that the city extend their Energy West contract for a year with the option to extend for a second year upon 60-day notification.

In October 2022, commissioners approved the one year extension through Oct. 31, 2023.

To secure the same contract terms for another year, City Manager Greg Doyon signed the contract on Oct. 31, 2023 and is requesting commissioners to ratify the action.

The contract is effective Nov. 1, 2023 through Oct. 31, 2024.

Extending the contract allows the city to negotiate future natural gas supply contracts.

If the city doesn’t enter into the contract, it will default to NorthWestern Energy and lose the ability to negotiate future natural gas supply contracts, according to the staff report.

The city estimates that negotiating a natural gas contract has saved it as much as $55,000 a year.