Energy News Today

Energy Transfer moves to shut off gas to power company, drawing complaint at Railroad Commission

One of Texas’s largest power companies, Luminant Energy, filed a complaint with the Texas Railroad Commission Wednesday, asking they intervene to stop the Dallas-based pipeline giant Energy Transfer from shutting off its natural gas supply.

The dispute stems from the winter storm last February that left millions of Texans without power and generated huge windfalls for natural gas pipeline companies, moneys that power companies are now attempting to recoup.

Luminant, the Irving-based subsidiary of Vistra Corp., says it already paid Energy Transfer more than $600 million for gas used during the storm but is refusing to pay a $21.6 million penalty imposed by the pipeline firm for buying too much gas and over-supplying their pipelines.

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“(Energy Transfer) is threatening to discontinue service to Luminant if it does not pay the $21.6 million in illegal OFO penalties within 10 days,” the complaint reads. “Cutting service to Luminant’s power generation facilities and thereby risking a loss of power to approximately 400,000 Texas homes, hospitals, and schools in the middle of winter.”

Energy Transfer is led by founder and chairman Kelcy Warren and controls some 9,000 miles of gas pipeline and storage facilities across Texas, including two of the state’s largest gas pipelines, Houston Pipeline and Oasis Pipeline

Asked for comment, an Energy Transfer spokeswoman said, “We will continue to sell (Luminant) gas pursuant to the same process, terms and conditions that have been in place since Dec. 1, 2021.”

Luminant’s long-term contracts with Energy Transfer expired at the end of November. The pipeline company has refused to sign a new long-term deal until the $21.6 million penalty is paid, leaving the power company to buy gas on a daily basis at “elevated prices,” the complaint says. 

Were Energy Transfer to cut off gas supplies two of Luminant 14 gas-fired power plants, which rely exclusively on Energy Tranfer pipelines, would need to shut down, the company said in its complaint. Three other plants would likely need to reduce generation to make up for the loss of fuel.


Read More: Energy Transfer moves to shut off gas to power company, drawing complaint at Railroad Commission

2022-01-20 02:00:00

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