Kansas energy lawyer presses for inquiry of potential market manipulation in 2021 cold snap – Kansas Reflector

by | Nov 7, 2022 | Energy

TOPEKA — The Kansas Corporation Commission issued orders requiring retail residential ratepayers to bear the brunt of $622 million in extraordinary costs absorbed by public utilities to buy natural gas during a brutal cold snap in February 2021.
The three-member KCC didn’t require utility companies to eat costs associated with a winter storm given the name Uri. There was no negotiation for price breaks on behalf of residential customers, despite private commercial deals reducing by 25% or more their payments tied to the weather.
Nor did the commission launch its own investigation into the mystery of what transpired when natural gas prices surged during a crucial seven-day period.
Jim Zakoura, an energy attorney and president of Kansas Industrial Consumers Group, said he was convinced the pricing of natural gas during the Uri storm didn’t reflect free market forces of supply and demand. State or federal officials have an obligation to explain what really happened to all the retail customers bearing the burden over the next two years to 10 years of costs incurred by utility companies, he said.
“There were indications throughout this period that the pricing was not accurate. I don’t want to say it was unlawful,” Zakoura said.
His central question: How did the price index for natural gas in Kansas move from $2.54 per unit on Feb. 1, peak at $622.78 per unit on Feb. 17 and plummet to $2.46 per unit by Feb. 28?
He said during the Kansas Reflector podcast the lack of a reasonable explanation of what transpired at the wholesale and retail levels should worry consumers because nothing has been done to shield them from price shocks in future storms.

It’s extraordinary

During the 2021 storm, the KCC ordered regulated utilities to do everything possible to sustain natural gas service to customers, to defer billing for price spikes and to develop a long term plan allowing cust …

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