House denounces price gouging, market hijinks of 2021 natural gas price spike

TOPEKA — The Kansas House offered near-unanimous support for a resolution endorsing investigations of potential price gouging and market manipulation tied to spikes in the cost of natural gas one year ago during a stretch of historically cold weather.

The resolution approved 114-2 — it was opposed by one Democrat and one Republican — was drafted to express support for inquiries into disruption of the energy supply leading to extraordinarily high wholesale prices for natural gas. Kansas regulators have been working to complete agreements for passing utility company costs to consumers, who will end up paying extra for years.

“It hit many of our smaller communities particularly hard,” said Rep. Kenneth Collins, a Mulberry Republican. “It does appear to be price gouging.”

The House resolution encouraged Attorney General Derek Schmidt to proceed with an inquiry to determine if profiteering occurred and whether corrective action was justified in aftermath of Winter Storm Uri. In addition, the resolution urged the Federal Energy Regulatory Commission to examine market conditions from Feb. 6-18 for wrongdoing that led to a $1 billion increase in gas costs in Kansas.

The resolution was written to express support for applying to obligations of ratepayers any financial penalties or lawsuit settlements at the state level, said Rep. Avery Anderson, a Newton Republican.

“It certainly is delivering the message that we don’t stand for price gouging in the state of Kansas,” said Rep. Annie Kuether, D-Topeka.

David Nickel, consumer counsel for the Citizens’ Utility Ratepayer Board, endorsed the resolution on behalf of residential and small commercial ratepayers of Kansas. The price of natural gas surged to an all-time high during the storm, he said.

“That price is nearly 200 times the natural gas prices that utilities pay for natural gas during normal winter periods,” he said. “Immediately after Winter Storm Uri, natural gas prices plummeted to near normal prices.”

He said CURB didn’t believe Kansas gas producers nor Kansas utility companies unlawfully profited from Winter Storm Uri.

Leslie Kaufman, legal counsel for the Kansas Electric Cooperatives, said distribution cooperatives on the retail level and generation and transmission cooperatives on the wholesale level provided their members with electricity based on the cost of service. In Kansas, she said, much of the power generated to serve cooperative customers was derived from natural gas as the fuel source.

“Electric cooperatives, as natural gas purchasers or purchasers of electricity generated by natural gas, were affected by the high gas prices associated with winter storm Uri. Those cost had to be passed on to member consumers,” she said.