CPS Energy Sues Natural Gas Companies Over Winter Storm Prices
CPS Energy is suing more than a dozen natural gas companies over high prices during the winter storm. It’s the second legal fight the utility is starting in hopes of reducing $1 billion in charges.
The 16 defendants in the multiple lawsuits include major companies like Chevron Natural Gas and BP Energy. CPS Energy bought more than $600 million in natural gas during the storm — which it said is exorbitant. The utility said in its filings that some utilities charged more than a 15,000% increase during the storm. CPS Energy, which uses natural gas as fuel for some of its power plants, was forced to buy more natural gas in part because it's coal plant was offline during part of the storm.
The lawsuits are asking a state court to find the excessive charges unlawful and grant a restraining order to to prevent gas suppliers from declaring a financial default against CPS Energy.
CPS Energy President and CEO Paula Gold-Williams said the utility filed suit to protect customers from excessive prices.
“Imagine going to the gasoline pump during a natural disaster and seeing the price of a gallon of gas at about $348 or about $7,000 for a full tank,” she said. “That is essentially what happened with natural gas prices during the storm. On behalf of our customers, we cannot, and we will not stand for that. What is worse, certain suppliers have already discontinued gas supply, which is a hardball tactic in the extreme.”
One suit filed says during the winter storm some gas companies increased their prices by nearly 15,000% going from about $2 per MMBtu in early February to between $300–$500 per MMBtu on Feb 16, the second full day of the energy crisis.
It’s combined lawsuit against Houston Pipeline Company and Oasis Pipeline LP, CPS Energy states the two providers are expecting a combined payment of $308 million. Oasis listed its invoice of $192 million as being due on Friday.
In the case of Chevron, CPS Energy states in its lawsuit that the provider charged an increase of more than 6,000%.
“Defendant sent CPS Energy an invoice for gas it delivered in February 2021 (the ‘Invoice’). The Invoice reflects transactions for gas delivered between February 1 and February 28 — with prices ranging from $2.35 to $150/MMBtu. That is a 6,283% swing in Defendant’s pricing in a single invoice," the lawsuit said.
The utility says it will pay what it considers lawful amounts.
Earlier this month, CPS Energy filed a similar lawsuit against the Electric Reliability Council of Texas for inflated electricity prices. The costs for buying excess electricity during the storm grew to more than $320 million for CPS Energy.
Last week, the San Antonio City Council approved allowing CPS Energy to seek loans totaling up to $500 million in order to pay the day to day costs of operations while the utility tries to drive down the cost of the winter storm.
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