As CPS Energy’s storm-related pricing lawsuits continue, it looks to lawmakers for protections
CPS Energy interim CEO Rudy Garza speaks as City Council decides whether to approve a rate hike in January.With CPS Energy’s lawsuits challenging hundreds of millions of dollars in charges stemming from last year’s winter storm still in court, the utility is looking to lawmakers to prevent huge price jumps in the future.
CPS has said it saw natural gas prices rise slightly to $3.25 per unit last Feb. 10 as the deadly storm took hold. But by Feb. 16, Dallas-based gas supplier Energy Transfer Partners was charging CPS $400 per unit of gas — an increase of more than 15,000 percent from what it paid at the start of the month.CPS Energy ratepayers likely to see another bill increase as utility drops lawsuits
Meanwhile, natural gas firms reported record earnings after last year’s first quarter, when the storm hit and sent prices to never-before-seen levels. Prior to the storm, the highest index price recorded for natural gas sold in Texas since 1994 was about $25 per unit at the Houston Ship Channel hub, according to CPS. That was in 2003.
But FERC doesn’t have jurisdiction over gas sales in Texas, and the state’s power grid is not subject to federal oversight. That’s why Castro charged the CFTC with regulating natural gas prices during emergencies. For its part, Energy Transfer and other natural gas firms CPS has sued have said the utility accepted the risk of buying gas on the spot market, where prices can swing up or down rapidly. They argue CPS should have locked in longer-term contracts to purchase gas at a fixed price. Before the storm, the utility bought about 70 percent of its gas supply on the spot market.
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