A Federal Judge in Kansas has dismissed five lawsuits that challenged hundreds of millions of dollars in excess natural gas costs stemming from the 2021 Winter Storm Uri, the same storm that resulted in billions of dollars to be footed by ratepayers in Oklahoma.
One of those named in the lawsuits was Kansas Gas Service, a subsidiary of Oklahoma-based ONEGAS Inc. Kansas Gas Service customers are paying an average of $6.54 more per month for 10 years to pay off $366 million in historic costs. Others bailed out after the judge’s decision were: Black Hills, Atmos, Midwest Energy and the Kansas Municipal Gas Agency. Their collective share of the excess cost totals about $635 million.
“This case asks the court to decide who gets to hold natural gas companies accountable for elevated prices during an extreme weather event,” wrote U.S. District Judge Daniel Crabtree in his recent order, adding, “The court rules that FERC, not plaintiffs, has exclusive jurisdiction to police these transactions.”
He went on to explain, “Plaintiffs’ claims are aimed directly at transactions occurring in the wholesale natural gas market. Congress has designated FERC as having exclusive jurisdiction over the wholesale market. And Congress has granted FERC authority to enforce policies that police rates and market manipulation in that field. Plaintiffs’ claims thus fall into a field that Congress intended FERC and FERC alone to occupy.”
The ruling ended the legal efforts of residential customers and left it in the hands of the Federal Energy Regulatory Commission. It also came after Kansas Attorney General Kris Kobach dropped his legal challenge to the high costs of natural gas during the storm. As a result of both actions, one by Kobach and the second by Judge Crabtree, ratepayers are left with $635 million in excess costs from Uri’s impact on the state.
The Kansas Corporation Commission determined, just as Oklahoma Corporation Commissioners did in handling billions of dollars in excessive costs, the costs were “prudent” as the utility companies were hit with additional costs to keep generators supplied with natural gas during the storm. The KCC ruled the utility ratepayers had to pick up the cost of the bill.
Kansas was hit with skyrocketing natural gas prices during the storm. Oklahoma’s gas prices rose to the highest ever recorded in the U.S. and soared from around $3 per MMBtu to nearly $1,200.
An appeal is possible, reported the Topeka Capital-Journal as it quoted Jim Zakoura, an attorney specializing in energy law at Foulston Siefkin who expressed disappointment over the judge’s ruling.
“The purpose of the action has always been to have redress of what we believe to be unnecessary and unlawful costs in an amount of about $650 million that Kansas retail ratepayers paid for five days of natural gas,” Zakoura said. “We will look very carefully at an appeal. It’s a serious issue for everyone in Kansas who will be paying for the next 10 years what was charged for five days of natural gas.”
Those who filed suit contended the extreme prices were in violation of the Kansas Consumer Protection Law after Gov. Laura Kelly declared a disaster emergency during the winter storm.
