On Feb. 23, four days after the end of February’s winter storm, Dallas-based pipeline giant Energy Transfer sent an email to CPS Energy seeking payment for natural gas deliveries during the storm.
Energy Transfer wanted $317.5 million. The company told CPS that “due to the unprecedented weather event over the past 10 days, the price of natural gas rose dramatically,” adding that its “credit exposure to CPS Energy has risen accordingly.”
But according to CPS Energy, Energy Transfer was charging natural gas prices 15,000% higher than Texas utilities were paying before the storm hit. The utility included the email in a lawsuit filed Friday in a San Antonio court that accused Energy Transfer of “opportunistic price gouging” during the storm.
“During the disaster, CPS Energy had no bargaining power to speak of – it had to pay defendants’ outrageous prices in order to keep the light and heat on in homes in its service area and elsewhere, and to continue delivering natural gas to its customers,” CPS Energy’s petition states.
The lawsuit was part of a legal blitz CPS Energy lawyers launched over the past several days, filing at least 15 lawsuits against natural gas companies in multiple state district courts in Bexar County. Natural gas charges make up the bulk of the more than $1 billion in winter storm costs CPS Energy President and CEO Paula Gold-Williams has called a “financial tsunami.”
In its suit against Energy Transfer, CPS Energy described the companies as “profiteers” who were “eager to collect their ill-gotten paper gains.” The price of nautral gas skyrocketed from $2.60 per 1 million Btu (MMBtu) in early February to $500 per MMBtu, the price Energy Transfer subsidiaries Houston Pipe Line Co. and Oasis Pipeline charged on Feb. 17 as the whole state struggled in sub-freezing temperatures.
An Energy Transfer spokeswoman said the company does not comment on pending litigation.
CPS Energy has been struggling to cope with the financial aftermath of the winter storm crisis that left nearly 400,000 households without power, many for multiple days. Utility leaders originally thought CPS Energy could owe as much as $840 million for natural gas, Gold-Williams said in a March 18 City Council meeting. Negotiations have since brought that estimate down to $670 million.
“A good portion of that is because they did not deliver all of the gas that we’d asked for,” Gold-Williams told council members.
Here’s a full list of the other 14 companies sued, with links to each petition:
Last week, City Council approved the utility taking on up to $500 million in new debt to maintain financial health without spiking its customers’ bills. CPS Energy has left its pre-storm billing structures in place, avoiding passing on high fuel and power costs to customers for now.
The utility also sued the Texas electric grid operator earlier this month in an attempt to reduce its bills for wholesale electricity, which could top $300 million.
CPS Energy is a financial supporter of the San Antonio Report. For a full list of business members, click here.
Read More: CPS Energy sues 15 natural gas companies over pricing during winter storm