A herbal fuel dealer sued via the Kansas legal professional basic over gasoline gross sales all over a wintry weather hurricane in 2021 offered virtually $154 million in fuel to Oklahoma utilities all over the similar duration.
Oklahoma shoppers of the state’s greatest regulated utilities are paying again billions in herbal fuel prices for the following a number of a long time from a two-week duration all over Winter Storm Uri.
The lawsuit, filed ultimate month via Republican Kansas Attorney General Kris Kobach towards Macquarie Energy LLC, alleges the corporate manipulated herbal fuel trades at the Southern Star buying and selling hub in Kansas. The trades bid up the cost of herbal fuel to remarkable ranges and allowed the corporate to earn document earnings, the lawsuit stated.
A spokeswoman for Macquarie Energy, a subsidiary of an Australian financial institution, stated the corporate doesn’t touch upon lively litigation. Macquarie Energy is one of the 5 greatest herbal fuel investors within the U.S. marketplace.
The corporate offered $118 million in herbal fuel to Oklahoma Natural Gas all over Winter Storm Uri, in accordance to gasoline sale disclosures via the Oklahoma Corporation Commission’s public software department. Macquarie offered some other $15.2 million in herbal fuel to Oklahoma Gas & Electric Co. and $15.3 million to Public Service Co. of Oklahoma.
All advised, the ones 3 utilities spent $2 billion on herbal fuel purchases all over the wintry weather hurricane. That exceeded their herbal fuel purchases for all of the earlier 12 months.
Oklahoma Attorney General Gentner Drummond is “aware of the Kansas litigation and has been reviewing whether there were similar circumstances in Oklahoma,” stated spokesman Phil Bacharach.
OG&E stated it stored the lighting fixtures on all over the wintry weather hurricane that had remarkable and excessive climate prerequisites.
“We and our customers ultimately were at the mercy of the natural gas market, and prices during the storm reached astronomical levels,” stated Aaron Cooper, OG&E’s supervisor of company communications. “We have taken steps to offer protection to our shoppers from skyrocketing gasoline prices will have to we ever enjoy some other excessive tournament like Uri.
“Like our customers, we are concerned if market manipulation is found to have occurred during Winter Storm Uri. We certainly would support any investigation into the practices of third-party natural gas marketers on behalf of our customers.”
The Kansas lawsuit comes to herbal fuel trades at the Southern Star buying and selling hub, the place costs spiked to greater than $622 according to unit all over the hurricane. Part of that marketplace comprises Oklahoma. Extreme chilly led to remarkable call for for herbal fuel for heating and electrical era. But Kobach’s lawsuit stated the associated fee spikes didn’t make sense.
“These conditions understandably led to increased natural gas prices during this time,” the lawsuit stated. “However, the natural gas prices and benchmark prices in multiple Mid-Continent locations — and Southern Star particularly – were not readily understandable: but rather, as aptly described by the American Public Gas Association, ‘unprecedented and unthinkable.’”
Most of Oklahoma’s utilities were given their fuel from the OneOK Transmission hub, the place costs spiked to $1,250 according to unit, in accordance to the federal Energy Information Administration. Prices ahead of the hurricane had been between $2 and $3 according to unit.
Kobach’s lawsuit stated Macquarie’s marketplace measurement gave it “the ability to manipulate benchmark Southern Star Gas Daily price through manipulative trading of Southern Star physical gas.” Macquarie used to be some of the greatest providers of herbal fuel to Kansas’ primary fuel software, Kansas Gas Service, a sister corporate to Oklahoma Natural Gas.
“At Oklahoma Natural Gas, our focus continues to be delivering natural gas safely and reliably to our customers,” learn a remark emailed Thursday via ONG public family members supervisor Chad Previch. “We cannot speak about other organizations’ operations.”
The Kansas lawsuit alleges wrongdoing underneath a federal regulation, the Commodities Exchange Act. It stated Kansas shoppers paid a minimum of $50 million extra for herbal fuel on account of Macquarie’s movements. The lawsuit used to be filed in Shawnee County, Kan.
The Federal Energy Regulatory Commission is still investigating conceivable marketplace manipulation all over Winter Storm Uri.
Oklahoma Corporation Commissioner Bob Anthony, who has wondered Oklahoma utilities’ reaction to the wintry weather hurricane and their purchases of herbal fuel, stated the Kansas lawsuit presentations that state officers can act and don’t have to watch for federal investigators.
“In my opinion, to do any less than our absolute best to find the true sources of these extreme costs and examine the prudence in the context of appropriate market rates and industry best practices would be a dereliction of our duty to the ratepayers of Oklahoma,” Anthony stated in a deliberation statement filed Thursday on the Corporation Commission.
Separately, the Corporation Commission voted 2-1 previous this week to rent an impartial advisor to evaluate gasoline purchases made via OG&E, PSO and ONG in 2021. That exam wouldn’t come with maximum gasoline prices all over Winter Storm Uri. Those gasoline prices have already been deemed “prudent” within the ratepayer-backed bond instances that had been licensed in 2022.
The ratepayer-backed bond instances for software gasoline prices all over the 2021 wintry weather hurricane all come with provisions that might “claw back” cash from corporations discovered to be manipulating marketplace costs all over Winter Storm Uri.
Commission Chairman Todd Hiett stated he had complete self belief within the public software department personnel’s annual evaluate of the gasoline prices. But he stated the huge quantities – greater than $1.75 billion from the 3 utilities in 2021 – necessitated the evaluate of the gasoline bought for the remainder of 2021. The public software department and the legal professional basic’s place of business, which represents customers in software instances, would paintings in combination to make a selection a specialist.
Anthony, who previous known as for a specialist to evaluate all gasoline fees from 2021, voted towards the plan proposed via Hiett. New Commissioner Kim David, who took place of business in January, voted for the proposal.
“This is a poor approach,” Anthony stated on the Feb. 28 assembly. “It’s limited. It’s restricted, and it ties the hands of a consultant. It seems to be cosmetic more than a substantive effort to give an honest and thorough assessment.”
Paul Monies has been a reporter with Oklahoma Watch since 2017 and covers state businesses and public well being. Contact him at (571) 319-3289 or [email protected]. Follow him on Twitter @pmonies.
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