OKLAHOMA CITY - The state Attorney General’s Office announced Friday they would “closely monitor” natural gas supply and marketing activity that occurred during the recent winter storm “to help ensure consumers are protected from potential price manipulation or unfair practices.”
During Winter Storm Uri five years ago, natural gas prices soared from $2.54 MMBtu to a national record of $1,230.65 MMBtu at the height of what was, and continues to be, alleged market manipulation. MMBtu refers to 1 million British Thermal Units, a measurement of the heat content of natural gas.
The Oklahoma Supreme Court gave its blessing to $3.07 billion in ratepayer- backed bonds to pay off abnormal, extraordinary energy expenses four public utility companies incurred during the two-week winter storm of February 2021.
That included $725 million for Public Service Co. of Oklahoma, $95 million for Summit Utilities (formerly CenterPoint), $1.45 billion for Oklahoma Natural Gas Co., and $800 million for Oklahoma Gas & Electric Co. The eventual tally climbed to approximately $4.5 billion when carrying costs, interest, and other expenses were factored in.
Invoices for PSO’s winter storm costs totaled $693 million. Those included natural gas expenses and electricity purchases from other entities, the utility’s parent, AEP, reported in a filing with the U.S. Securities and Exchange Commission.
In comparison, PSO’s fuel bills for an entire year range from about $500 million to $600 million, a company official told Southwest Ledger; the company’s fuel expense in 2020, for example, was $520 million, he said.
To retire PSO’s securitization bonds, the typical residential customer who uses 1,100 kilowatt-hours per month will pay an estimated $4.06 a month for another 15 years, the company estimated.
PSO serves more than 580,000 customer accounts in 232 cities and towns in eastern and southwestern Oklahoma. Those include Lawton, Altus, Duncan, Chickasha, Cache, Elgin, Fletcher, Porter Hill, Sterling, Hobart, Apache, Rush Springs, Carnegie, Cement and Cyril.
The $79 million gas bill for CenterPoint/Summit during the two-week period of Feb. 7-21, 2021, “was more than three times the company’s cost of gas in all of 2020,” the Corporation Commission was told by a company executive.
The company provides natural gas to approximately 98,800 residential, commercial, and industrial customers in 91 Oklahoma cities and towns in 36 counties, records indicate.
Lawton and Duncan are the largest cities in Oklahoma served by Summit. Other communities served by the company are Elgin, Fletcher, Sterling, Cache, Geronimo, Altus, Apache, Arapaho, Blair, Burns Flat, Chickasha, Comanche, Duke, Mangum, Marlow, Martha, Olustee, and Temple.
The natural-gas bill for then-Comanche County Memorial Hospital in Lawton for the month of February 2021 was approximately $400,000, administrator Brent Smith related. In comparison, he said, the hospital’s gas bill for all of 2020 was about $210,000.
The Fort Cobb Fuel Authority absorbed $550,000 in additional natural gas purchase costs in February 2021 - particularly Valentine’s Day through Feb. 19 - when Oklahoma was nearly paralyzed by unusual weather that included snow, freezing rain, and wind.
A typical bill for FCFA gas buys in February is approximately $200,000 to $250,000, attorney Ron Comingdeer of Oklahoma City told the Ledger. The Eakly-based company took out a loan to pay that extra $550,000, he said. Customers paid off the debt via a surcharge on their bills over a period of 33 months.
A document filed with the Corporation Commission in a case from May 2024 reported FCFA has 1,031 miles of distribution lines and 3,864 customers at various locations throughout Oklahoma.
Goal of AG’s office is to prevent a repeat of’21 The A.G.’s office said they are committed to safeguarding ratepayers and preventing a repeat of the market abuses that contributed to soaring energy costs during Winter Storm Uri. “While energy markets can experience volatility during periods of severe cold, those conditions do not excuse predatory behavior or violations of contractual obligations. Ratepayers deserve fair and transparent costs that reflect legitimate market conditions.”
The A.G.’s office asked public utilities to promptly notify them if natural gas marketers fail to meet their contractual supply obligations or engage in any suspicious or potentially unlawful conduct.
The office reported it continues to pursue litigation and investigations pertaining to excessive natural gas pricing during the 2021 winter storm. They said they “remain vigilant and prepared to take appropriate action should similar conduct arise during the current winter weather event.”
Mike W. Ray is a fifth-generation, award-winning journalist who has more than 55years’ experience covering municipal, county, state and federal government in Oklahoma and Texas. He can be reached at mike.ray@swoknews. com.