From staff reports OKLAHOMA CITY – Alleging that Oklahomans are paying for artificially inflated natural gas prices in the wake of Winter Storm Uri, Attorney General Gentner Drummond filed lawsuits April 10 against two intrastate pipeline companies: Enable entities and Symmetry Energy Solutions.
Symmetry Energy Solutions is based in Houston, Texas, and was formerly known as CenterPoint Energy Services. The Enable entities include ET Gathering & Processing, successor by merger to Enable Midstream Partners, Enable Oklahoma Intrastate Transmission, Enable Gas Transmission and Enable Energy Resources.
During that devastating 2021 winter storm, Enable and Symmetry marketed natural gas and operated intrastate natural gas pipelines throughout Oklahoma. Among their customers was the Grand River Dam Authority. Symmetry supplies natural gas to many of Oklahoma’s public schools, cities, counties and hospitals, Drummond said.
While the Federal Energy Regulatory Commission bars interstate pipeline operators from owning the commodity they transport and sell, there is no such prohibition on intrastate pipelines. Many states have imposed restrictions on intrastate pipeline owners to mirror the federal rules, but Oklahoma is not among them – a circumstance that, according to the lawsuit, leaves the state ripe for market manipulation and anti-competitive behavior.
The lawsuits allege that Enable and Symmetry employed “a variety of tactics to drive up the index prices, including reduction of supply and submitting trades at unconscionable price levels” to charge GRDA exorbitant fees “dictated by the artificially inflated index prices.”
Drummond said his office will pursue additional litigation against other companies that he said engaged in market manipulation.
“I believe the level of fraud perpetrated on Oklahomans during Winter Storm Uri is both staggering and unconscionable,” he said. “While many companies conducted themselves aboveboard during that trying time, our analysis indicates that some bad actors reaped billions of dollars in ill-gotten gains. It is important that we do everything in our power to hold bad actors accountable for their actions.”
Uri roared through Oklahoma in mid-February 2021. Before it eventually exited the continental United States, the punishing mix of ice, snow and record-breaking cold caused hundreds of deaths and more than $200 billion in damages throughout the southern part of the country.
It also spurred desperate need for additional natural gas.
According to the lawsuits, Enable and Symmetry had counted on higher demand with the arrival of Winter Storm Uri and schemed to artificially reduce supply.
“They knew that it would bring sustained below-freezing temperatures, and that it would increase demand for natural gas. Armed with this knowledge, defendants used that time to prepare, but not in the way that was rightfully expected from them,” the lawsuits allege.
“Instead of ensuring adequate natural gas supplies to GRDA, upon information and belief defendants spent the weeks and days before Winter Storm Uri’s arrival in Oklahoma taking deliberate steps, which continued after Winter Storm Uri’s arrival, to reduce the availability of natural gas in Oklahoma. They did so with the objective of driving natural gas prices — and their resulting profits — exponentially higher, to the detriment of GRDA and everyone else in Oklahoma.”
Enable and Symmetry “reaped billions of dollars in extra profit from their wrongful conduct and the resulting surge in prices during the storm,” according to the lawsuits filed in Osage County District Court.
The lawsuit against ET Gathering & Processing, Enable Oklahoma Intrastate Transmission and Enable Energy Resources claims violations of the Oklahoma Antitrust Reform Act, violations of the Oklahoma Common Carrier statute, breach of contract, unjust enrichment, fraud, constructive fraud, bad faith breach of contract, civil conspiracy and negligence.
The lawsuit against Symmetry claims violations of the Oklahoma Antitrust Reform Act, breach of contract, unjust enrichment, fraud, constructive fraud, bad faith breach of contract, negligence, and breach of fiduciary duty.
Shortly after joining the Oklahoma Corporation Commission, “I formally asked” the attorney general “to investigate possible wrongdoing by natural gas marketers and pipeline operators during Winter Storm Uri,” Commissioner Kim David wrote in a statement released the same day Drummond filed his lawsuits.
“After heeding my request, the Attorney General, as the state’s chief prosecutor, opened an investigation and determined that a lawsuit is necessary to protect Oklahoma ratepayers.
“While these lawsuits were filed on behalf of the Grand River Dam Authority, I am hopeful that the Attorney General will pursue additional litigation against other companies so that all determined overpayments may be returned to Oklahoma ratepayers,” David wrote.