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Kansas regulators opt against subpoena in investigation of natural gas price spikes

By: - September 9, 2021 10:40 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)

Kansas energy regulators will not issue a subpoena in what attorneys representing large-scale natural gas customers hoped would be an investigation into potential price-gouging during a devastating February storm.

The Kansas Corporation Commission decided unanimously on Thursday not to subpoena S&P Global Platts Gas Daily, denying a motion from industrial groups alleging “overwhelming circumstantial evidence of a dysfunctional market.”

The effort to subpoena S&P, an index that influences what utilities pay for their natural gas, comes as the KCC reviews plans for the state’s largest natural gas utility, Kansas Gas Service, to recover from customers $451 million in extraordinary gas prices and carrying costs incurred during a cold snap in February that forced electrical outages and caused natural gas prices to rise to 200 times their normal price.

Statewide, the excess energy cost of the winter storm is near $1 billion. Jim Zakoura, an attorney representing the Natural Gas Transportation Customer Coalition, has been pushing for further investigation and more public disclosure around which suppliers charged such high prices to gas utilities, which are, in turn, passing those costs onto customers.

“This docket is not a docket that is solely focused on the issue of ‘the length of time’ that Kansas ratepayers will have in order to pay KGS $451 million,” Zakoura said in his filing. “It is equally, if not more focused, on whether KGS ratepayers should pay KGS $451 million, and whether Kansas residents, businesses, and governments should pay $1 billion for seven days’ supply of natural gas.”

KCC staff opposed the motion in a filing late last month, saying the Federal Energy Regulatory Commission, not the KCC, had jurisdiction to investigate S&P.

KCC chairman Andrew French said fears of price gouging, however, are “very legitimate” concerns. 

The commission also denied a motion from NGTCC to unseal documents supplied by KGS disclosing which suppliers charged it such high prices for gas. Parties to the regulatory proceeding, including NGTCC, have access to the confidential documents, but they have not been made public.

KGS has proposed recovering the $451 million over five, seven or 10 years, increasing customers’ bills by anywhere from about $4 to $11 per month.

In a statement following the KCC vote, Zakoura said the KCC decision was a “very big setback for our efforts to fight price gouging of Kansans.”

“No cost recovery by Kansas Gas Service of $451 million from Kansas ratepayers should happen without a full investigation,” Zakoura said. “These enormous natural gas overcharges — and today’s apparent approval of the KCC to charge them to Kansas consumers — are unprecedented for our state. Kansas consumers deserve better.”

KGS spokeswoman Dawn Tripp said in statement that the company supported KCC’s decision to keep the information confidential.

“We purchase natural gas for our sales customers through a confidential, sealed competitive bid process,” Tripp said. “Our customers benefit by having Kansas Gas Service be as competitive as possible in the gas supply purchasing market.”

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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.