Senator Tina Smith (D-MN) is calling for federal investigations into possible fraud in natural gas prices in areas hit by severe winter storms that have caused power cuts in Texas and other major areas of the country.
Why it matters: In a letter sent to regulators on Saturday, Smith said that spot prices for natural gas have increased by more than 100 times their normal levels, increasing utility costs for people in the affected areas.
- Smith said that price increases threaten “the financial stability of some utilities that do not have sufficient cash reserves to cover their short-term costs in this extraordinary event.”
- “A public report should detail what happened, make recommendations to prevent such problems in the future and determine whether the laws have been violated,” said Smith.
Zoom In: The extreme weather increased the demand for electricity by an unprecedented amount, while utilities in states like Texas were closed because of snow.
- Winfield, Kansas, is likely to pay $ 10 million for natural gas just last week, according to an interview with city manager Taggart Wall on KWCH-TV. He added that residential customers can expect to pay around $ 2,500 this month.
- Officials in Morton, Illinois, reported gas prices at nearly $ 225 per unit this week, although they typically sell for around $ 3.
- Oklahoma’s natural gas prices have reached a record $ 600 per million British thermal units.
The other side: American Gas Association spokesman Jake Rubin said AP utilities use long-term contracts to ensure sufficient supply at an affordable price.
- “Spot prices have risen in some regions due to spikes in demand, families and companies using natural gas have been protected from higher prices by careful planning by their dealerships. ″
What’s new: The Texas utility regulator announced on Saturday that it had opened an investigation “into the factors that have combined with the devastating winter weather to disrupt the flow of energy to millions of homes in Texas.”
Go deeper: Biden declares major disaster in Texas after winter storms