Kansas Attorney General Kris Kobach just sent a shockwave through those hoping to recover millions, or in the case of Oklahoma Attorney General Drew Gentner’s promise of ‘billions’ of dollars, from natural gas overcharges in the 2021 winter storm Uri.
Kobach announced this week he had dismissed the lawsuit against Macquarie Energy, the firm hit with a lawsuit accusing it of “market manipulation” during the storm that gripped the Midwest four years ago this month. He also said he did so with prejudice, meaning the lawsuit cannot be refiled against the energy company.
The Topeka Capital Journal reported Kobach and the outside law firm he had hired to file the suit, signed a joint stipulation of dismissal in Topeka Federal Court. The Attorney General later issued a press release announcing “attorney general completes investigation into Winter Storm Uri.”
The release further explained, “Following discovery, the Office of the Attorney General has agreed to dismiss the litigation with prejudice” and that “Macquarie has agreed to make a donation of $400,000 to the Salvation Army, which provides a broad range of support to needy Kansans.”
Kobach’s lawsuit originally claimed the action by Macquarie during the 2021 winter storm had resulted in more than $50 million in overcharges to consumers in the state.
“We will do everything we can to recover what was taken from those Kansas,” said Kobach when he refiled the lawsuit in 2023.
The lawsuit originally claimed the market size for Macquarie allowed “the ability to manipulate benchmark Southern Star Gas Daily price through manipulative trading of Southern Star physical gas.”
Macquarie made no comment following Kobach’s announced decision, but previously maintained it did nothing wrong in what it charged consumers in Kansas during the storm. In court, it also denied wrongdoing and stated Kobach lacked “a scintilla of evidence” of any market manipulation.
OK Energy Today sought reaction from Oklahoma Attorney General Gentner Drummond because his lawsuit was filed against several firms following the lawsuit filed by Kobach. In announcing his office’s investigation of the price-gouging he said took place during the storm, Drummond stated, “After careful and diligent review of the conduct during Winter Storm Uri, It’s clear to me that several companies reaped billions of dollars at the expense of Oklahoma families and businesses. The magnitude of this scheme is staggering and unconscionable. The conduct in question is well outside the parameters and boundaries of ordinary capitalism.”
Drummond’s Communications Director Phil Bacharach indicated the Attorney General was not notified of Kobach’s decision but had been aware it might occur.
But Kobach’s action raises some questions. Did he consult or offer notification to Drummond prior to the announced dropping of the case? If not, what is Drummond’s reaction?
Drummond did not file suit against Macquarie but did against several other suppliers.
Further, what impact could the Kansas Attorney General’s decision have on the case by Oklahoma Attorney General Drummond? Just as in Kansas, Macquarie has maintained it did nothing wrong in providing natural gas to Oklahoma utilities during the storm.
Macquarie Energy is considered one of the five largest natural gas traders in the country and according to the Oklahoma Corporation Commission, sold $154 million in natural gas to electric and natural gas utilities in the state during the storm.
Most of Oklahoma’s utilities got their gas from the OneOK Transmission hub, where prices spiked to $1,250 per unit, according to the federal Energy Information Administration. Prices had been in the $2 to $3 range prior to the storm.
Kobach’s lawsuit said Macquarie’s market size gave it “the ability to manipulate benchmark Southern Star Gas Daily price through manipulative trading of Southern Star physical gas.” Among the utilities that received natural gas through Macquarie was Kansas Gas Service, which is a sister company to Oklahoma Natural Gas and a subsidiary of ONEGAS headquartered in Tulsa.
During the storm, Macquarie was not the biggest supplier of natural gas to Oklahoma utilities. NextEra sold more than any other supplier and had $430 million in sales. At least 95% of its natural gas sales were to ONG.