Oklahoma Watch --- Customers Paid Billions for Natural Gas In Last Winter’s Storm. Here’s Who Cashed In:
A year after an extreme winter storm gripped Oklahoma and the central United States, utility customers are finally getting a look at which companies sold natural gas during a record price spike.
NextEra Energy Marketing LLC, a subsidiary of Florida-based utility and energy giant NextEra Energy Inc., led the pack with almost $430 million in natural gas sales to Oklahoma utilities during the winter storm. Most of it was bought by Oklahoma Natural Gas.
Other large sellers included Southwest Energy LP, Tenaska Marketing Ventures, Koch Energy Services LLC and Macquarie Energy LLC.
More than 50 natural gas producers and traders sold billions of dollars in natural gas to regulated utilities in Oklahoma in February 2021. Customers will be paying back those record fuel costs over decades after the Oklahoma Corporation Commission approved financing orders in recent weeks. That will take the fuel costs off the utility’s books and let the state sell bonds secured by monthly customer payments.
Demand for natural gas surged during the winter storm as residential customers used more gas heating and electric utilities needed more of the commodity to keep their gas generating plants running. But extreme cold temperatures crimped supply as equipment in the field froze and many gas producers couldn’t fulfill their contracts. Utilities went to the pricey spot markets to buy gas, which traded as high as $1,200 a unit at the height of the storm. That was about 600 times the normal price.
Source: Oklahoma Corporation Commission Public Utility Division
The sales data came after the Oklahoma Corporation Commission’s public utility division, responding to consumer and media inquiries, asked the utilities last month to disclose their natural gas sellers. In normal circumstances, those natural gas sales aren’t public information but are disclosed to fuel auditors at the regulatory agency.
NextEra Energy Marketing was the only company to raise objections to the information request. It called the data “highly competitive confidential and proprietary information.”
“Public disclosure of the (NextEra Energy Marketing) information would provide competitors of NEM access to information valuable to them in making their own competitive decisions, without the competitors expending the time and money necessary to gather and develop the information, which, in turn, will directly harm NEM’s competitive interests,” the company said in regulatory filings.
But Brandy Wreath, director of the public utility division, said the winter storm and price spikes were so unusual that the normal confidentiality provisions on gas sales shouldn’t apply. In a 2-0 vote on Thursday, the commission agreed with Wreath and denied NextEra Energy Marketing’s motion to keep its sales secret. Commissioner Bob Anthony, who has opposed the utility securitization plans, did not vote on the matter.
The data shows how much each utility paid for natural gas, storage, transportation and purchased power during the storm from Feb. 7, 2021, to Feb. 21, 2021. The largest expense for purchased power came from Public Service Co. of Oklahoma, the electric utility that serves Tulsa and parts of eastern and southwestern Oklahoma. PSO spent $417 million in the Southwest Power Pool, which operates a wholesale electricity market in Oklahoma and 13 other states.
While the data shows the total sales during the two-week period, it doesn’t detail the volume of natural gas bought by the utilities.
Shortly after the storm, then-Attorney General Mike Hunter said his office had opened an investigation into possible price gouging by natural gas sellers. Few details of the investigation were shared by his successor, John O’Connor, who was appointed by Gov. Kevin Stitt after Hunter resigned.
Last week, O’Connor reversed course on plans to hold energy companies accountable for the price spikes. He said it’s unclear from state law if natural gas is a “petroleum product” that would exempt it from the price-gouging statute.
Separately, the Corporation Commission on Thursday approved two additional fuel cost securitization cases. Commissioners Dana Murphy and Todd Hiett voted for a $675 million fuel cost plan for PSO, with Anthony voting no. It spreads the costs over 20 years, with the typical residential customer paying an extra $4 per month.
Most residential customers of CenterPoint Energy, which is now Summit Utilities Oklahoma, will pay an extra $4.36 a month for 15 years. CenterPoint, which has about 100,000 natural gas customers in southwestern Oklahoma, spent more than $76 million on natural gas during the 2021 winter storm. Murphy and Hiett voted for the plan. Anthony did not vote on that plan.
Oklahoma Watch, at oklahomawatch.org, is a nonprofit, nonpartisan news organization that covers public-policy issues facing the state.