Senator Tina Smith (D-MN) is calling for federal investigations into possible natural gas price junk in areas affected by severe winter storms that have caused power outages in Texas and other large areas of the country.
Why it’s important: In a letter to regulators sent on Saturday, Smith said spot prices for natural gas rose more than 100 times typical levels, raising utility costs for people in affected areas.
- Smith said the price hikes threaten the “financial stability of some utilities that do not have enough cash reserves to cover their short-term costs at this extraordinary event.”
- “A public report should detail what happened, make recommendations to prevent these problems in the future, and determine whether the laws have been broken,” Smith said.
Zoom in: Extreme weather has boosted electricity demand unprecedentedly, while utilities in states like Texas were shut down due to snow.
- Winfield (Kansas) will likely pay $ 10 million for natural gas last week alone, according to an interview with Taggart Wall, the city’s manager, on KWCH-TV. He added that residential customers could expect to pay about $ 2,500 this month.
- Officials in Morton, Illinois, reported that gas prices were near $ 225 per unit this week, although they typically sell for about $ 3.
- Natural gas prices in Oklahoma hit a record high of $ 600 per million British thermal units.
The other side: American Gas Association spokesman Jake Rubin told utility companies to use long-term contracts to ensure sufficient supply at an affordable price.
- “Spot prices rose in some regions due to rising demand, households and businesses using natural gas were protected from higher prices through careful planning of their utilities.”
What’s new: The Texas utility regulator announced Saturday that it has opened an investigation “into the factors that combined with the devastating winter weather to disrupt the flow of energy to millions of Texas homes.”
In depth: Biden declares major disaster in Texas after winter storms