TOPEKA — Amid investigations into the extraordinary increase in gas prices during the February cold snap, Kansas legislators are considering sending a message denouncing price gouging in the natural gas marketplace.
During winter storm Uri, natural gas prices rose nearly 200 times what utilities usually pay during normal winter months. Both the Kansas attorney general and the Federal Regulatory Energy Commission have launched investigations into high prices Kansans suffered during the storm.
In response, the Legislature approved the city utility low-interest loan program, allowing Kansas cities to borrow from the state to cover extraordinary natural gas and electric costs. State treasurer Lynn Rogers said without the emergency action, increased prices could have devastated communities across the state.
As of Jan. 1, a total of 54 cities and 1 municipal energy agency submitted applications and $78,409,646.79 in loans were approved and funded. Still, Rogers said, this resolution and ongoing investigations are crucial to Kansas families, businesses and municipalities.
“Kansans deserve answers as to how these price spikes happened and assurances that their interests will be protected in future events like this,” he said. “If market manipulation or price-gouging is found to have occurred, communities could direct proceeds from potential settlements or refunds toward early repayment of their loans, rather than dealing with the costs over 10 years.”
The cold snap in February from winter storm Uri left Kansas grappling with a $1 billion fallout. Estimates indicate some Kansas customers of Evergy electric company will pay $152.3 million in power costs over two years.
The resolution would also provide support from the Legislature for ongoing investigations in addition to denouncing price gouging.
David Nickel, consumer counsel for the Citizens’ Utility Ratepayer Board, which advocates for residential and small commercial ratepayers before the Kansas Corporation Commission and the Kansas legislature, said it was important to note they saw no indication that state gas producers or utility companies unlawfully profited. Rather, the board believes that price gouging, if any occurred, was at the marketing level.
“It is important to note that natural gas pricing is generally a complicated process, and it was made more complex by the supply disruptions caused by Winter Storm Uri,” Nickel said. “It is a daunting task to sort through these complexities in the investigations.”
During congressional hearings in September, Federal Energy Regulatory Commission chairman Richard Glick acknowledged gas pricing anomalies in Kansas.
The Kansas Industrial Consumers Group “agrees there was surely something amiss with natural gas prices during Uri and believes additional investigations by FERC and the Kansas Attorney General are warranted,” said Paul Snider, on behalf of KIC.
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