Utility consumers are still dealing with the fallout from the major winter storm that hit Oklahoma and the central United States over three years ago, and the cases against traders and natural gas companies are still mostly unresolved. The saga, which began with a record-breaking spike in natural gas prices due to a storm in February 2021, has resulted in consumers dealing with enormous bills and drawn-out court disputes over nothing.
Hopes for accountability and justice among impacted customers were sparked last summer when Oklahoma Attorney General Gentner Drummond announced preparations to investigate alleged market manipulation by natural gas dealers. In December, in an effort to find proof of misconduct, the attorney general’s office set up a tip line to collect information from those who had knowledge of the storm’s impact on the natural gas trading environment.
Natural gas prices in Oklahoma’s trading center reached record highs during the winter storm, exceeding $1,200/mcf, far higher than the normal regional costs of about $3. The biggest natural gas and electricity companies in Oklahoma are charging their customers billions of dollars in fuel expenses, on top of interest payments, which will be paid off over the next twenty years, putting a heavy financial burden on consumers.
The enormous expenses caused by the hurricane prompted Oklahoma to issue ratepayer-backed bonds in 2022 totaling around $3 billion. Instead of being used for long-term infrastructure upgrades, these bonds were mainly issued to pay the unexpected natural gas costs incurred during the storm. This is in contrast to comparable bonds issued in other states for infrastructure projects.
The contingency fee contract, with a ceiling of $50 million (not including expenses), was obtained by the Oklahoma City law firm Foshee & Yaffe, which was tasked with the investigation into market manipulation. Settlements have been reached in a few storm-related cases, such as the one between NextEra Energy Marketing LLC and Oklahoma Natural Gas, but generally speaking, the process has been lengthy and tense.
Utilities in Minnesota were unable to pay over $60 million in natural gas expenditures associated with the winter storm because regulators there were more decisive than their Oklahoma counterparts. To prevent customers from being unfairly burdened financially in times of crisis, the Minnesota Attorney General’s office highlighted the utility industry’s skewed incentives and the need for more regulatory control.
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Victims of the February 2021 winter storm who paid exorbitant prices for natural gas are still waiting for a resolution and compensation as court disputes go on in other states, including Texas and Kansas. Advocates continue to fight for customers affected by the unusual market volatility by demanding accountability and fair treatment, despite the hurdles and complexity underlying these litigation.