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Senator pushed probe into natural gas price gouging after storms

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Sen. Smith mentioned worth spikes might “threaten the monetary stability of some utilities” that lack enough money reserves.

WASHINGTON — A Democratic senator is looking for federal investigations into potential worth gouging of pure fuel within the Midwest and different areas following extreme winter storms that plunged Texas and different states right into a deep freeze that prompted energy outages in hundreds of thousands of houses and companies.

Minnesota Sen. Tina Smith says pure fuel spot costs spiked as excessive as 100 instances typical ranges, forcing utilities and different pure fuel customers to incur exorbitant prices, a lot of which had been handed on to prospects.

In a letter despatched Saturday to federal regulators, Smith mentioned the worth spikes is not going to simply hurt customers, however might “threaten the monetary stability of some utilities that don’t have enough money reserves to cowl their short-term prices on this extraordinary occasion.” The letter was despatched to the Vitality Division, Federal Vitality Regulatory Fee and the Commodities Futures Buying and selling Fee. A replica of the letter was obtained by The Related Press.

The acute climate spurred residents from Mississippi to Minnesota to crank up electrical heaters and pushed demand for electrical energy past the worst-case eventualities deliberate for by grid operators. On the identical time, many gas-fired energy crops in Texas and different states had been knocked offline due to icy situations, and a few crops appeared to undergo gasoline shortages as pure fuel demand spiked nationwide.

Greater than 70 deaths throughout the U.S. have been blamed on the storms.

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In Winfield, Kansas, the town supervisor reported {that a} unit of pure fuel that offered for about $three earlier this month offered for greater than $400 on Thursday. Metropolis Supervisor Taggart Wall instructed KWCH-TV in Wichita that Winfield, which budgets about $1.5 million a 12 months for pure fuel, expects to pay about $10 million for the previous week alone. Residential prospects might see payments as excessive as $2,500 this month, he mentioned.

In Morton, Illinois, officers reported that fuel usually offered for about $three per unit price practically $225 this week as demand soared due to the deep freeze.

Whereas officers don’t know all the main points of what occurred, nor exactly the way it will have an effect on utility charges, “we do know this case could possibly be a major monetary burden for utilities and their prospects,” particularly as households in Minnesota and throughout the nation battle within the coronavirus pandemic and financial downturn, Smith mentioned.

The Minnesota Public Utilities Fee has known as a particular assembly Tuesday to research what prompted the dramatic spikes in pure fuel costs in that state.

A spokeswoman for the Federal Vitality Regulatory Fee, referred to as FERC, mentioned the company will overview Smith’s letter and “reply in the end.”

A spokesman for the American Gasoline Affiliation, which represents greater than 200 native power corporations, mentioned Feb. 14 and 15 set a file for the biggest pure fuel demand in U.S. historical past over a two-day interval.

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Whereas pure fuel utilities confronted “unprecedented challenges” and “spot costs climbed in some areas on account of spikes in demand, households and companies that use pure fuel had been shielded from greater costs by the cautious planning of their utilities,” mentioned Jake Rubin, a spokesman for the fuel affiliation. Most pure fuel utilities use long-term contracts that search to ensure sufficient provide to fulfill demand and to lock-in inexpensive costs, he mentioned.

Nonetheless, exorbitant worth spikes had been recorded within the spot market. Pure fuel hit a file $600 per million British thermal items in Oklahoma, whereas Missouri Gov. Mike Parson mentioned he’s requested the state legal professional common to research complaints of worth gouging of pure fuel in that state.

Smith, in her letter to regulators, urged them to research situations within the pure fuel market during the last week, together with any worth gouging by pure fuel producers and suppliers.

“A public report ought to element what occurred, make suggestions to forestall such issues sooner or later and decide if legal guidelines have been damaged,” she mentioned. Smith additionally urged officers to invoke emergency authorities, together with below the Pure Gasoline Coverage Act and the Protection Manufacturing Act, to make sure pure fuel is offered at truthful costs throughout the present disaster.

The Biden administration and Congress ought to take into account monetary help to utilities and prospects “which may be dealing with a money crunch or charge will increase because of the spike in pure fuel costs,” Smith mentioned.

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The White Home introduced on Saturday that the president had declared a significant catastrophe in Texas, and he has requested federal companies to determine extra assets to deal with the struggling.

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