Sen. Tina Smith calls for probe into natural gas price hikes during winter storms
Sen. Tina Smith (D-MN) is calling for federal investigations into possible price gouging of natural gas in areas afflicted by the severe winter storms that have caused power outages in Texas and other large swaths of the country.
Why it matters: In a letter to regulators sent Saturday, Smith said spot prices for natural gas increased by over 100 times their typical levels, raising utility costs for people in the affected areas.
- Smith said the price hikes 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 should detail what occurred, make recommendations to prevent such problems in the future and determine if laws have been broken,″ Smith said.
Zoom in: The extreme weather has raised demand for electricity an unprecedented amount while utilities in states like Texas were shut off because of the snow.
- Winfield, Kansas will likely pay $10 million for natural gas for the past week alone, according to an interview with City Manager Taggart Wall on KWCH-TV. He added that residential customers could expect to pay around $2,500 this month.
- Officials in Morton, Illinois reported gas prices at nearly $225 dollars per unit this week, although they normally sell for about $3.
- Natural gas prices in Oklahoma reached a record high at $600 per million British thermal units.
The other side: American Gas Association spokesperson Jake Rubin told AP utilities use long-term contracts to guarantee enough supply at an affordable rate.
- “Spot prices climbed in some regions due to spikes in demand, families and businesses that use natural gas were protected from higher prices by the careful planning of their utilities.″
What's new: Texas' utility regulator announced Saturday that it has opened an investigation "into the factors that combined with the devastating winter weather to disrupt the flow of power to millions of Texas homes."