Senator Tina Smith (D-MN) is calling for federal investigation into possible natural gas price gouging in areas hit by the severe winter storms that caused power outages in Texas and other large parts of the country.
Why it matters: In a letter to regulators sent Saturday, Smith said that spot prices for natural gas are more than 100 times higher than normal, increasing energy costs for people in the affected areas.
- Smith said the price increases threaten the “financial stability of some utilities that do not have sufficient cash reserves to cover their short-term costs in this extraordinary event.”
- “A public report must detail what happened, make recommendations to prevent such problems in the future, and determine whether laws have been violated,” Smith said.
Zoom in: Due to the extreme weather, the demand for electricity is unprecedented, while utilities in states like Texas have been shut down due to the snow.
- Winfield, Kansas will likely pay $ 10 million for natural gas in the past week alone, according to an interview with City Manager Taggart Wall on KWCH-TV. He added that residential customers can pay about $ 2,500 this month.
- Officials in Morton, Illinois reported gas prices of nearly $ 225 per unit this week, although they normally sell for about $ 3.
- Natural gas prices in Oklahoma hit a record high of $ 600 per million British thermal units.
The other side: American Gas Association spokesman Jake Rubin told AP utilities they use long-term contracts to ensure adequate supply at an affordable price.
- “Spot prices rose in some regions due to peaks in demand, households and businesses using natural gas were protected from higher prices by careful planning of their utilities.”
What’s new: The Texas utility regulator announced on Saturday that it has opened an investigation “into the factors that, coupled with the devastating winter weather, are disrupting power to millions of homes in Texas.”
Go deeper: Biden declares a major disaster in Texas after winter storms