Allegations of market manipulation in Winter Storm Uri stir support for deep-dive inquiry


Sen. Rob Olson, an Olathe Republican, is convinced market manipulators were behind staggering price shocks in February 2021 amid a lethal cold-weather storm that left consumers with bills requiring years to pay off. He supports a House-passed resolution encouraging investigations. (Sherman Smith/Kansas Reflector)

TOPEKA — Kansas Electric Cooperatives representative Leslie Kaufman is likely to view any weather anomaly tagged with the name Uri as a pseudonym for financial menace.


Kaufman joined a chorus of energy and political interests Tuesday by endorsing a Kansas House resolution urging full investigation of the winter ice storm Uri in February 2021 that resulted in blackouts for 10 million people in the United States and Mexico and placement of 170 million Americans under weather alerts by the National Weather Service. The cold wave resulted in an electric power crisis in Texas that spread its tentacles into Kansas, where consumers face rising utility bills tied to unprecedented energy cost surges.


House Concurrent Resolution 5023, previously adopted by the Kansas House, expressed support for the Federal Energy Regulatory Commission’s investigation into potential market manipulation and pointed to necessity of a parallel inquiry by the office of Attorney General Derek Schmidt.


“Electric cooperatives, as natural gas purchasers or purchasers of electricity generated by natural gas, were affected by the high gas prices associated with winter storm Uri,” Kaufman said. “Those costs had to be passed on to member consumers. Cooperatives have worked with consumers and developed workable payment options and ways to spread payment over time. Still, it was a significant cost event.”


The Senate Utilities Committee’s chairman was prepared to vote on the resolution, but Sen. Marci Francisco, D-Lawrence, asked for a delay to determine whether the attorney general was eager for the committee to advance the call for an investigation of the storm.


“I would want to have the agreement of the attorney general’s office that this is indeed the action that they’re taking,” Francisco said.


Sen. Mike Thompson, a Republican from Shawnee and chairman of the utilities committee, said it was his understanding the attorney general was “considering a number of different cases,” but he wasn’t certain of the status. He said he would contact the attorney general’s office and reschedule a committee vote on the resolution.


Sen. Rob Olson, R-Olathe, said relatives who reside in San Antonio know what it felt like to be caught in the middle of last year’s deadly cold snap.


“I really still believe the investigation on the people who made this money is on Wall Street. The trading patterns that we have going on today is where largely the investigation needs to be pursued,” Olson said.


David Nickel, consumer counsel for the Citizens’ Utility Ratepayer Board, said the price of natural gas surged nearly 200 times above the typical winter cost during Uri. After the storm subsided, he said, natural gas prices plummeted to near normal levels.


“CURB does not believe that any Kansas gas producers unlawfully profited from Winter Storm Uri for gas that they produced in Kansas. Nor does it appear that any of our utilities engaged in any unlawful activity concerning natural gas prices. Rather, CURB believes that any price gouging that may have occurred was at the marketing level,” Nickel said.


State Treasurer Lynn Rogers, a Democrat, said the Utility Loan Program created by the Kansas Legislature in March 2021 provided low-interest loans to Kansas cities that needed to borrow to cover extraordinary natural gas and electric costs resulting from the winter storm.


As of Jan. 1, he said, 54 cities and one municipal energy agency submitted applications leading to approval of $78.4 million in loans. So far, four cities have repaid their loans in full.


Here are examples of the borrowing: Garden City, $10 million; Winfield, $8.5 million; Garnett, $2.9 million; Pratt, $2.7 million; Louisburg, $2.6 million; Moundridge, $1.7 million; Osage City, $1.6 million; Cheney, $1.4 million; and Eskridge, $1.1 million.


“Still, Kansans deserve answers as to how these price spikes happened and assurances that their interests will be protected in future events like this. If market manipulation or price gouging is found to have occurred, communities could direct proceeds from potential settlements or refunds toward early repayment of their loans, rather than dealing with the costs over 10 years,” Rogers said.


The Kansas Corporation Commission is working with utility companies to complete work on a customer payment schedule tied to the storm.


This article was used by permission from the Kansas Reflector. The Kansas Reflector is a non-profit online news organization serving Kansas. For more information on the organization, go to its website at www.kansasreflector.com.

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