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Council hears plan to lock in gas price through New Wave Energy contract
Summary
Staff explained a proposed contract with New Wave Energy LLC would lock in gas pricing for the city to mitigate a forecasted rise in natural gas prices over the next three years; staff framed it as a hedging tool rather than a bargain price now.
City staff described a resolution authorizing a contract with New Wave Energy LLC as a way to manage the city's natural-gas purchasing risk over a multi-year period. A staff speaker said the consortium that procures gas projects price increases over the coming three years and that the proposed contract would lock in a price the consortium expects to be favorable later in the period.
“It’s really not a good price right now, but it will be a good price 3 years from now,” a staff speaker said, emphasizing the approach is designed to reduce exposure to projected market increases. The transcript does not record a final vote on the contract in the excerpt provided.
Why it matters: locking in energy prices can reduce budget uncertainty for municipal utilities and service costs, but such contracts also carry risks if market prices fall instead of rising.
