Grumet: Others are fighting massive fuel charges from 2021 freeze. Why not people here?

Back when so many of us were without power during the 2021 winter freeze, an executive with one natural gas producer likened that week’s astronomical energy prices to “hitting the jackpot” — a rare acknowledgment of the corporate greed that kept flowing even as the electricity went out, killing hundreds of Texans and leaving millions shivering in the dark.

Fuel suppliers reaped billions of dollars in profits in that weeklong emergency.

Now that the bill is coming due for Texans, though, you won’t hear any jackpot talk. Indeed, the charges to pay off about $3.5 billion in freeze-related fuel costs will start appearing this month on the bills of various natural gas utilities with scant fanfare.

For customers of Texas Gas Service, which serves the bulk of the Austin area, the added cost from that winter storm will be folded into the “Cost Of Gas” line item that’s always been on your bill. Except that charge will now be a few dollars more per month, adding up to an additional $38 per year for the typical Austin household.

Multiply that across the expected 16 years to repay the freeze-related debt, and that’s $608 per household.

I should emphasize: This is not a windfall for Texas Gas Service. The utility did not profit off the 2021 freeze. As natural gas spot prices soared during that disaster — from an average of about $2.80 per million British thermal units at the main West Texas trading hub to a high of $206.19 — Texas Gas Service had to buy natural gas at exorbitant prices to keep service going for customers.

I was grateful for that service, considering my gas fireplace provided the only flicker of heat in my home during two days of subfreezing temperatures.

Still, that left Texas Gas Service and other utilities with massive fuel bills to pay to the natural gas providers who did, in fact, reap an enormous windfall. The path of least resistance is to pass the cost on to customers in small monthly installments, hoping no one feels too much of a sting.

But the pipeline operators who charged those outrageous prices are keeping their “jackpot.”

Other states, utilities fight back

Local utility watchdog Paul Robbins notes that people elsewhere are fighting the massive charges from the 2021 winter freeze. Why not people here?

In Kansas, Attorney General Kris Kobach sued a Houston-based firm this year, alleging that it gouged Kansas customers by $50 million during the February 2021 freeze by manipulating market prices.

In Oklahoma, Attorney General Gentner Drummond recently hired a private law firm to file what he expects will be the largest lawsuit in that state's history, seeking to recoup billions of dollars in natural gas costs from the 2021 freeze.

He pointed to troubling indicators that natural gas providers reduced the supply heading into that freeze, which sent prices soaring throughout the Midwest. (In other court filings, natural gas providers insist they did nothing wrong.)

“The magnitude of this scheme is staggering and unconscionable,” Drummond told reporters in July. “The conduct in question is well outside the parameters and boundaries of ordinary capitalism.”

Even some utilities are taking action. CPS Energy, the city-owned utility in San Antonio, sued 16 natural gas companies over the massive fuel bills it incurred during the freeze. The San Antonio Express-News has reported that CPS Energy reached settlements that saved millions of dollars, though the details remain confidential.

Meanwhile, CirclesX, a Houston-based pipeline data firm, filed a lawsuit in February accusing 92 pipeline companies and energy traders of “intentional and manipulative withholding of supply” during the 2021 freeze, sending prices soaring. That suit seeks to recover costs for millions of Texans.

But there’s no indication that Texas Attorney General Ken Paxton is pursuing any such action (his office did not respond to my inquiries).

True, the AG’s office in 2021 sued Griddy Energy, the now-defunct utility that tried to hit thousands of customers with enormous energy bills from the freeze. With oil and gas magnates among his largest campaign donors, however, Paxton has shown little interest in going after the bigger fish, the fuel suppliers who charged the massive “jackpot” prices that buried Griddy and many other utilities in debt.

Surrender on the high seas

Robbins, the utility watchdog, says the lawsuits elsewhere show there is a path to challenge these exorbitant charges. He’s frustrated that Texas Gas Service didn’t even try, opting instead to pass the cost on to customers.

“If a lawsuit was filed, who knows if they would win?” Robbins acknowledged. “The fact is they didn't try, while other people are trying — hard.”

Safeena Walji, a spokesperson for Texas Gas Service, said the utility “successfully reduced our customers’ costs” after reviewing its fuel bills after the 2021 freeze. But she declined to elaborate on how that was accomplished, or how large the savings were, or why the utility did not take any legal action to further reduce the burden on customers.

Instead, Texas Gas Service and Atmos Energy, whose customers in Williamson County and elsewhere will see increases in the “Gas Cost Recovery” part of their bills, both pointed me to resources for customers who might have a hard time paying up.

As if the question is whether Texas residents can afford to pay, as opposed to whether they should be the ones covering these charges at all.

Walji also said Texas Gas Service has provided information about its expenses from the 2021 freeze “to the Railroad Commission of Texas to determine if the costs were prudent.” The Railroad Commission nominally regulates the gas and oil industry, even as its elected members rely on that industry’s campaign cash.

In the wake of the 2021 freeze, however, Railroad Commission members said they didn’t have any power over pricing or contracts. Texans getting saddled with billions of dollars in excess natural gas costs just wasn’t their problem.

Robbins’ communications on this issue are peppered with images of the Jolly Roger, the skull-and-crossbones pirate flag that once evoked theft on the high seas. Now he uses it as a symbol of the plundering of Texas consumers who will spend years paying off the profits that natural gas providers and pipeline operators made in just a few frigid February days.

But the problem also sits with the utilities, regulators and attorney general who, instead of defending Texans from these massive bills, hoisted the white flag.

Grumet is the Statesman’s Metro columnist. Her column, ATX in Context, contains her opinions. Share yours via email at bgrumet@statesman.com or via Twitter at @bgrumet. Find her previous work at statesman.com/news/columns.

This article originally appeared on Austin American-Statesman: Others are fighting fuel costs from 2021 winter freeze. Why not here?