City Public Service of San Antonio is suing two Energy Transfer LP natural gas pipelines and several gas marketers for charging "unlawful, excessive, and exorbitant prices" during Texas' February winter storm.
The San Antonio-owned utility, also known as CPS Energy, filed lawsuits in Bexar County District Court alleging that Houston Pipe Line Co. LP and Oasis Pipeline LP as well as top-ranked marketers such as BP Energy Co., Macquarie Energy LLC and Tenaska Marketing Ventures Inc. illegally billed CPS Energy millions of dollars as an arctic blast sent gas prices soaring.
"The lawsuits are designed to ensure that San Antonio residents get fair treatment instead of price gouging and gross overcharging by natural gas suppliers during last month's weather emergency," San Antonio Mayor Ron Nirenberg said in a March 23 statement. "We will not tolerate suppliers hitting the jackpot by exploiting average customers."
Paula Gold-Williams, president and CEO of CPS Energy, added that "certain suppliers have already discontinued gas supply, which is a hardball tactic in the extreme."
In a March 19 petition to the court, CPS Energy said Oasis Pipeline's February invoice for gas deliveries totaled about $192 million. The utility expects Houston Pipe Line's February invoice to be $116.8 million. Those bills reflect "a price for natural gas that was more than 15,000% higher than pre-event prices," according to the filing.
The utility also alleged that the Energy Transfer subsidiaries attempted to "circumvent the dispute resolution mechanism in the relevant contracts and create a pretext for declaring a default," and CPS Energy is asking the Bexar County court to issue a temporary injunction preventing the subsidiaries from doing so during the suit.
CPS Energy also filed separate suits against 14 gas marketing companies. BP Energy, Macquarie and Tenaska — three of the top four North American gas suppliers during the fourth quarter of 2020, according to S&P Global Platts — charged the utility $7.1 million, $1.2 million and $6.6 million, respectively, during a two-week period in February, according to the filings.
CPS Energy said it paid "the full invoice price" prior to petitioning the court and in all three filings "seeks relief ... in the event that [the] defendant elects to pursue an unlawful windfall over and above what it already has been paid."
Following the storm, the utility reported $1 billion in obligations, including $800 million for natural gas supply and $200 million for electricity from the Electric Reliability Council Of Texas Inc. The CPS board allowed up to $500 million in short-term financing, subject to the approval of the San Antonio City Council, but CPS Energy is also suing the grid for "excessive" prices.
The lawsuits come amid an ongoing debate regarding the repricing of these transactions and controversy surrounding the Public Utility Commission of Texas and ERCOT's actions during the extreme weather event. In a letter to Lt. Gov. Dan Patrick, Texas Attorney General Ken Paxton concluded that under existing state law, the PUC may direct ERCOT to reprice $16 billion worth of transactions that had been priced at the $9,000/MWh legal cap during the winter storm.
S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc.
