WASHINGTON, D.C. [2/20/21]—Today, U.S. Senator Tina Smith (D-Minn.) is seeking an investigation, including possible price gouging, as natural gas prices skyrocketed during the recent extreme weather situation in Texas, and many parts of the central United States. The drastic price increases, some as high as 100 times typical rates, have putting a significant strain on utilities that have to buy this power, and costs that will likely be passed along to consumers in the form of higher gas bills. Sen. Smith believes it is unacceptable for gas barons to line their own pockets while many Americans are literally out in the cold, and customers all over the country have to foot the bill.
“In recent days, extreme cold in large sections of the central United States has caused electric, water and natural gas supply disruptions for millions of families. While the worst of the crisis has been centered in Texas, the effects have rippled across the entire region, including in Minnesota. One such ripple effect has been in the natural gas markets, where natural gas spot prices have spiked, in some cases, to nearly 100 times typical levels,” wrote Sen. Smith in her letter to the heads of the U.S. Department of Energy (DOE), the Federal Energy Regulatory Commission and the Commodity Futures Trading Commission. “These drastic price increases are forcing utilities and other natural gas users to incur exorbitant costs, much of which could be passed along to consumers in the form of higher electric or natural gas bills over the next year. Further, the price spikes may threaten the financial stability of some utilities that do not have sufficient cash reserves to cover their short-term costs of this extraordinary event. While we don’t know all the details yet of what has happened, nor precisely how it will affect utility rates, we do know this situation could be a significant financial burden for utilities and their customers, especially as many Minnesota families are already struggling to get by in the current health and economic crisis.”
Sen. Smith is also calling to:
- Launch an investigation into the conditions in the natural gas market over the last week, including any price gouging by natural gas producers and suppliers, and a public report should detail what occurred, make recommendations to prevent such problems in the future, and determine if laws have been broken;
- Invoke, as appropriate, any emergency authorities available, including under the Natural Gas Policy Act, to allocate natural gas supplies at fair prices; and
- Examine options to provide financial support to the utilities and their customers that may be facing a cash crunch or rate increases as a result of the spike in natural gas prices.
You can access text of the letter below:
February 20, 2021
The Honorable David G. Huizenga
Acting Secretary
U.S. Department of Energy
1000 Independent Avenue SW
Washington, DC 20585
The Honorable Richard Glick
Chair
Federal Energy Regulatory Commission
888 1st Street NE
Washington, DC 20426
The Honorable Rostin Behnam
Acting Chair
Commodity Futures Trading Commission
Three Lafayette Centre
1155 21st Street NW
Washington, DC 20581
Dear Acting Secretary Huizenga, Chair Glick, and Acting Chair Behnam:
In recent days, extreme cold in large sections of the central United States has caused electric, water and natural gas supply disruptions for millions of families. While the worst of the crisis has been centered in Texas, the effects have rippled across the entire region, including in Minnesota. One such ripple effect has been in the natural gas markets, where natural gas spot prices have spiked, in some cases, to nearly 100 times typical levels. These drastic price increases are forcing utilities and other natural gas users to incur exorbitant costs, much of which could be passed along to consumers in the form of higher electric or natural gas bills over the next year. Further, the price spikes may threaten the financial stability of some utilities that do not have sufficient cash reserves to cover their short-term costs of this extraordinary event. While we don’t know all the details yet of what has happened, nor precisely how it will affect utility rates, we do know this situation could be a significant financial burden for utilities and their customers, especially as many Minnesota families are already struggling to get by in the current health and economic crisis.
I write to request that you take three immediate steps to address this situation. First, I urge you to launch an investigation into the conditions in the natural gas market over the last week, including any price gouging by natural gas producers and suppliers. A public report should detail what occurred, make recommendations to prevent such problems in the future, and determine if laws have been broken. Second, I urge you to immediately invoke, as appropriate, any emergency authorities you have, including under the Natural Gas Policy Act, to allocate natural gas supplies at fair prices. Finally, I urge you to examine options to provide financial support to the utilities and their customers that may be facing a cash crunch or rate increases as a result of the spike in natural gas prices.
Americans must come together to support each other during times of national crisis, and price gouging by natural gas suppliers is a violation of their moral – and potentially legal – obligations. We must come together to provide relief where needed and restore fair and equitable natural gas markets. Thank you for your attention on this urgent matter.
Sincerely,
English