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Far from Texas, a huge gas bill aroused anger after the February freeze

Anger repulsion is being built in the middle of the United States as the state intervenes to help its members pay billions of dollars With a natural gas bill Rack up during the February freeze.

While most are running away Power outage that occurred In Texas, states from Minnesota to Kansas have local utilities, businesses, and homeowners after natural gas prices soared from about $ 2 per million British thermal units to $ 1,200 in some parts of the country. We need to help people cover their February bills.

Parliamentarians and regulators in Minnesota, Oklahoma, Missouri, Arkansas, and Kansas are seeking market manipulation investigations and seeking regulatory changes. Republican and Democratic leaders in some states reconsider whether deregulated interstate gas markets since the 1980s need more federal oversight to prevent the recurrence of similar economic disasters. He said it might be time.

February storm Wellhead and pipeline frozen In Texas and other gas-producing states, supply is crimped, just as millions of customers have heated up. The impact was felt far from Lone Star, leaving many homeowners and businesses with hundreds and even thousands of times more monthly bills than usual.

The Villagio Senior Living Center in Oklahoma City received $ 44,527 in February from Constellation, a Chicago-based gas distributor. This is about 50 times the previous month.

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“It was shocking and affected the population of what we were trying to do,” said Tyler Gable, head of Blackwood, the owner of a living support facility that is challenging the bill. I did. A Constellation spokesman said he is working with Villagio and similar business customers on postpaid plans.

At the Villagio Senior Living Center in Oklahoma City, gas prices in February were about 50 times higher than in the previous month.


Photo:

The Wall Street Journal Nick Oxford

Oklahoma regulators said the week-long freeze generated as much as $ 5 billion in gas bills. As a result, some credible Republican state lawmakers have called for more regulation of natural gas producers, one of Oklahoma’s most influential industries.

“I don’t understand how I saw it go from $ 2 to $ 1,200 in a week and back to $ 2 for the rest of my life. That’s not realistic,” said the Public Utility Commission of the Oklahoma House of Representatives. Republican Garry Mize, chairman of the Republican Party, said. See Natural Gas Prices. “It’s difficult at the political level because we want to believe that the free market is always functioning.”

Mize signed the bill in April to help utilities securitize their payments and sell them as bonds, enabling them to extend their impact on their customers for more than a decade. Without this measure, payers who normally pay an average monthly bill of $ 100 estimated that their February bill would reach about $ 1,900.

He considers additional changes to prevent runaway prices, such as setting federal caps and creating market circuit breakers, similar to what the US Congress uses to stop irregular trading. He said it might be necessary.

The Federal Energy Commission, which regulates the transport and wholesale of natural gas in interstate commerce, has begun investigating potential market manipulations during the freeze. At least four state attorney generals are investigating this issue. The FERC may punish companies for rate changes that they deem unreasonable or unreasonable.

A FERC spokeswoman declined to comment.

Devin Metzinger, Roland Hobby, and Jordan Hobby of Winfield’s concrete company Daniels Ladymix, who were closed during the freeze but still received higher gas bills.


Photo:

The Wall Street Journal Nick Oxford

Winfield’s Craig Duncan says he received a much higher gas bill.


Photo:

The Wall Street Journal Nick Oxford

Without the discovery of operations, the FERC’s ability to influence prices is limited. Federal regulators have capped gas prices for decades, but Congress began deregulating the market after price controls led to supply shortages in the 1970s. By 1993, gasoline prices were almost completely deregulated and influenced by market trends.

“I think Kansas, Oklahoma, and Texas are worth knowing if there was any market manipulation,” said Senator Roger Marshall, a Republican in Kansas who urged the FERC to investigate quickly. It was. “Who made the money?”

Marshall said the economic impact of the freeze in some Kansas communities was worse than that of the pandemic. The Senate is considering new market regulations and “nothing is off the table,” he said.

Gas prices in Kansas jumped from $ 2 to over $ 600 per million British thermal units during the storm. In March, Democratic Kansas Governor Laura Kelly signed a $ 100 million low-interest loan program for local governments facing high utility bills.

The emergency loan program is the lifeline of a small community in Kansas, such as Winfield, a city with a population of approximately 12,000. According to Mayor Taggart Wall, he spent $ 8.5 million on gas during the week-long freezing period in February. That’s well over the $ 200,000 you normally spend that month.

Retail energy companies are competing with local utilities to give US consumers more choice. But in almost every state they operate, retailers charge more than regulated incumbents. In other words, you may be paying more for electricity than your neighbor. This is the reason.Photo Illustration: Jacob Reynolds

Wall said the city called on large users, including local hospitals and nursing homes, to reduce usage during storms, but had to maintain gas flow due to the extreme cold. It was.

“It’s not conscientious to see prices reach these levels,” Wall said. “People had no choice.”

Winfield is one of dozens of small Kansas towns that pool gas purchases through the non-profit Kansas Municipal Gas Agency. Overall, the agency paid about $ 45 million in gas charges in February, four times the annual budget.

Unable to raise cheap money, many towns faced bankruptcy before Kansas went through a lending program. Without federal intervention in the gas market, Mr Wall said such a surge could occur again.

“I’m not against oil and gas. We live in an oil and gas country,” he said. “But next year, we can’t stack a $ 1,500 homeowner’s bill on top of another $ 1,500 homeowner’s bill.”

Winfield, where Teresa Young works as a city official, is one of dozens of small Kansas communities pooling gas purchases.


Photo:

The Wall Street Journal Nick Oxford

Write to Christopher M. Matthews christopher.matthews@wsj.com

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Far from Texas, a huge gas bill aroused anger after the February freeze

Source link Far from Texas, a huge gas bill aroused anger after the February freeze

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