Freshman U.S. Sen. Roger Marshall (R-Kan.) said record natural gas spikes experienced by municipalities like Winfield during February’s cold snap will weigh on his mind if legislation on the issue ever comes to the Senate floor.
Marshall, who was in Ark City on Feb. 27 for a town hall, responded Monday via email to follow-up questions from KSOK-NewsCow after his visit, when he said a Senate hearing was expected on the issue.
Last week, the City of Winfield announced it will be spreading the cost hike of natural gas during the cold snap via increased bills over six years. The City said over the course of the six-year period, the increase amounts to about $29 per month for an average user.
“I am always concerned that energy service in Kansas is reliable and affordable, but especially during emergency weather events like this,” Marshall wrote in a letter to KSOK-NewsCow. “I am keen to ensure the integrity of energy markets is never compromised.”
On March 11, the Senate Committee on Energy & Natural Resources held a hearing about the energy and financial issues that occurred during the deep freeze.
“I am here with the weight of three million Kansans who are waking up to utility bills which are just through the roof,” Marshall said during his time at the hearing. “I have the weight of a hundred different municipalities who are buying natural gas on the spot market, municipalities who in three days’ time spent more than they were planning on spending in the next five years.”
During his time of the hearing, Marshall asked Hunt Energy Network CEO Pat Wood, III, why daily index prices for natural gas returned to more typical prices of $3-5/MMBtu just a few days after highs of $400-600/MMBtu when temperatures were at their coldest.
“Sacristy pricing and market manipulation are two sides of the same coin,” Wood said. “It depends what a jury thinks about it. But when you got a scarce supply of something, you want to charge for it.
“In Texas, for example — I think probably in most of the states — our attorney general is pursuing actions now looking at gas and power trades, because it is illegal to price gouge in an emergency.”
Marshall then asked Wood who profited from the price hikes.
Wood, who was the former chairman of the Federal Energy Regulatory Commission under President George W. Bush, said several can profit in such a scenario and in general, “whoever has a precious commodity at a time it’s most precious.”
“That could be the person who has it in storage, the person who is flowing it from a well head, whoever has title to that gas at that time — it could be anybody,” Wood said. “It could be a landowner in the middle of Kansas or Oklahoma or Texas that has title or royalties to the gas.
“So, it honestly depends where you are at the moment and where the gas is, where the title to the gas is, at that moment.”
Marshall asked Wood and other witnesses at the hearing if supply/storage was of issue and none could answer the question.
On Feb. 23, Marshall and U.S. Rep. Sharice Davids of northeast Kansas, send a letter to current FERC Chairman Richard Glick. That letter can be read here.
Marshall’s full letter to KSOK-NewsCow Monday can be read below:
The full Senate hearing can be viewed here.
