Where Kansas investigators stand on February cold crisis’ natural gas price spike


TOPEKA, Kan. (AP/KSNT) — A natural gas price spike hitting Kansas towns from a February 2021 cold-weather crisis may have broken a state law, according to the attorney general.

Attorney General Derek Schmidt said that state law prohibits unjustified price increases for necessary goods and services during a declared state of disaster emergency. He is now seeking outside legal help to investigate the sharp increase in natural gas prices while much of the state saw rolling blackouts from the weather’s strain on the regional power grid. Schmidt’s office said Monday it is looking to retain a law firm with expertise in the natural gas marketplace to help investigate, and the end result could be civil litigation aimed at enforcing the state’s anti-profiteering law.

Schmidt’s office joins two other known organizations investigating the gas price spike: the Natural Gas Transportation Customer Coalition, and the Federal Energy Regulatory Commission.

Beyond the rolling blackouts seen in-state, some towns have been left facing massive bills from natural gas used during the February extreme cold. In a normal year, the City of Winfield will spend $1.6 million on natural gas. During the recent arctic blast, the bill grew well over $10 million in a span of six days.

“How does a community the size of Winfield pay for that gas supply?” said Winfield City Manager Taggart Wall. “We don’t have $10 million sitting here to help with that. We’re asking our state and federal authorities to step in at this point.”

Kansas Gas Service said it saw much higher natural gas demand during the cold weather, and subsequently, significantly higher natural gas market prices on some of its supply during the stretch of cold temperatures. It has been working with the Kansas Corporation Commission to spread the high costs over a longer time span. However, commissioners said Thursday that something else could be coming, depending on the results of state and federal investigations into the February natural gas prices.

“All regulated Kansas utilities are required to work with the KCC to determine how the February gas prices will be passed on to ratepayers. While Federal and State investigations into the matter continue, the commissioners emphasized their expectation that Kansas natural gas consumers will be compensated in the future if price gouging or market manipulation is uncovered.”

Kansas Corporation Commission

The KCC made this statement after it denied a request to make public KGS supply invoices for natural gas prices, determining that doing so would violate the utility provider’s trade secrets. However, Schmidt’s office and other investigating groups already have access to their invoices and are looking at wholesale prices as part of their probe.

Back in February, the Kansas Gas Service told customers Tuesday that higher bills after the severe weather and rolling outages were possible, though it was too early to know how much higher. However, it also said it had the ability to work with its regulators like the KCC to spread the high costs out over several months. Winfield, who gets service from a municipal gas company instead, knew sooner that its residents could face bills costing as much as $3,000, according to that city’s manager.

Kansas’ U.S. Sen. Jerry Moran previously said he was exploring federal aid options for Kansans like those in Winfield possibly facing “unaffordable” bills.

Watch the KCC’s Thursday business meeting where commissioners discussed the natural gas price situation below:

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