Attorney: More public disclosure needed in historic natural gas price proceedings

Economic impact on Kansas from winter cold snap is near $1 billion in natural gas costs alone

By: - September 20, 2021 9:15 am

The Calista Compressor Station serves the Kansas Gas Service’s network in Kansas. The utility received approval from the Kansas Corporation Commission to recoup $366 million from customers. (Kansas Gas Service)

State regulators’ refusal to dig deeper into the causes of a historic spike in natural gas prices this winter effectively shuts down the investigation, an attorney says. 

Prices for the largest natural gas pipeline serving Kansas rose to about 200 times their normal price this winter during a severe cold snap that pushed the electrical grid to the brink. Months later, regulators are sorting out huge spikes in energy prices caused by the storm. 

The total statewide is nearly $1 billion. 

The biggest chunk comes from Kansas Gas Service, the state’s largest natural gas utility, which paid more than $390 million in extraordinary costs when gas prices rose from less than $3 to more than $620. With carrying costs, the total comes to $451 million. Instead of recouping the total all at once, KGS customers will pay off costs from the storm for up to 10 years

Black Hills Energy incurred $87.9 million total, which will cost customers an extra $12.23 per month over five years. Evergy, which also gets energy from coal and renewable resources, plans to recoup $152.3 million over two years from its Kansas customers outside the Kansas City metro. Evergy customers on the Kansas side of the Kansas City metro will see savings because the company has far more sources to generate power in the area. 

But Jim Zakoura, an attorney representing the Natural Gas Transportation Customer Coalition, unsuccessfully urged Kansas regulators to require KGS release records about its natural gas purchases, including supplier names, and subpoena a national natural gas price index to investigate market dysfunction. 

“If you’re asking the public to foot the largest rate increase in history, $451 million for seven days of gas, everything should be made available to them,” Zakoura said. “Nothing should be kept from them.” 

Regulators with the Kansas Corporation Commission acknowledged Zakoura’s perspective but deferred to federal regulators at the Federal Energy Regulatory Commission and Kansas Attorney General Derek Schmidt to investigate.

“While NGTCC may raise legitimate concerns, this Commission is simply not the forum for such an investigation,” the KCC said. “This Commission is focused on the behavior of its jurisdictional utilities and whether they acted reasonably and prudently, under the circumstances.”

KGS has also resisted such efforts, saying its trades are confidential for a reason and supporting the commission’s decision not to issue a subpoena of the price index or require KGS to turn over supplier information. In a statement, the company’s spokeswoman, Dawn Tripp, noted Zakoura doesn’t represent the state’s residential ratepayers and that documents in the case are available too intervening parties, incuding NGTCC.

“We remained committed throughout the winter storm event to maintain service to human needs customers, and we understood that our actions could affect whether customers survived the storm,” Tripp said. “Kansas Gas Service is aware of investigations into commodity pricing during the February 2021 winter storm and has cooperated. We have not lodged an independent investigation of the prices; however, we have disputed invoices of certain suppliers.”

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Allison Kite
Allison Kite

Allison Kite is a data reporter for The Missouri Independent and Kansas Reflector, with a focus on the environment and agriculture. A graduate of the University of Kansas, she’s covered state government in both Topeka and Jefferson City, and most recently was City Hall reporter for The Kansas City Star.