An investigation into a 'staggering' and 'unconscionable' scheme against Oklahomans
Ben Felder, Oklahoman
Wed, July 19, 2023
Attorney General Gentner Drummond speaks Tuesday during a news conference at the state Capitol in Oklahoma City.
Oklahoma Attorney General Gentner Drummond says he is prepared to file the largest lawsuit in state history to recoup billions of dollars in natural gas costs from a 2021 winter storm, which left Oklahoma ratepayers with significantly higher utility bills.
Drummond announced Tuesday he is soliciting bids for outside legal help in pursuing the case.
An initial investigation found no wrongdoing by oil and gas firms and utility companies like Oklahoma Gas and Electric Co., Drummond said.
Instead, he accused natural gas marketers of reducing supply as demand rose to combat frigid temperatures, resulting in a cost spike.
“Several companies reaped billions of dollars at the expense of Oklahoma families and businesses,” Drummond said during a news conference at the state Capitol. “The magnitude of this scheme is staggering and unconscionable. The conduct in question is well outside the parameters and boundaries of ordinary capitalism.”
Crews work Feb. 17, 2021, to clear snow from the parking lot of the The Market at Czech Hall in Oklahoma City.
Drummond would not name any potential lawsuit targets but said most are based outside the state.
Dozens of providers sold natural gas to Oklahoma utilities. Last year, the Public Utility Division of the Oklahoma Corporation Commission released the list of vendors the utilities did business with during Winter Storm Uri, which brought record-low temperatures in February 2021, resulting in more than $3 billion in higher natural gas costs.
More: Who got paid during the February 2021 storm? More than 65 Oklahoma companies split a $3 billion+ pot
To avoid customer bills increasing by hundreds if not thousands of dollars, state officials allowed utility companies to use state-backed bonds to pay off the high costs and recoup that money from customers over the next two decades.
State officials, utility companies and the Oklahoma Corporation Commission, which regulates the oil and gas industry, said using state bonds was the most logical response.
But Oklahomans still expressed frustration at higher utility bills and an energy sector that appeared to be caught flat-footed during an era of climate change-caused extreme weather.
Snow covers rooftops Feb. 17, 2021, in Oklahoma City.
“The companies who reaped billions of dollars on the backs (of) hard-working Oklahomans must be held accountable," AARP Oklahoma State Director Sean Voskuhl said Tuesday. "Oklahoma utility customers want action to be taken against the companies who bilked customers out of billions of dollars in a matter of days during Winter Storm Uri and further demand the recovered funds are returned to customers immediately.”
Corporation Commissioner Kim David, elected last year to the three-person board, praised Drummond for not holding liable oil and gas companies, which contribute millions in campaign donations to corporation commissioners.
More: Energy firms help fund candidates seeking to regulate Oklahoma's oil and gas sector
“I am thankful for confirmation that no wrong-doing was done by the Corporation Commission, Oklahoma’s regulated utilities, or the producers of oil and gas," David said in a statement.
A man walks along NW 164 as an Oklahoma City Public Works truck plowing snow approaches Feb. 17, 2021, in northwest Oklahoma City.
David also said she hoped a lawsuit would result in overpayments being "returned to Oklahoma ratepayers.”
Bob Anthony, a longtime commissioner who has been critical of the state's response to the high storm costs, said he welcomed Drummond's investigation but felt more should have been done years ago.
"Although I greatly appreciate the attorney general's willingness to investigate and perhaps even prosecute market manipulators who profited billions on the backs of Oklahoma utility customers, the A.G.'s efforts come two years late because the Oklahoma Corporation Commission refused to do its duty and protect ratepayers from fraud and market manipulation," Anthony said in a statement.
The state of Kansas filed a lawsuit earlier this year against a natural gas company it accused of manipulating the market during Winter Storm Uri.
Vehicles travel west Feb. 14, 2021, along the John Kilpatrick Turnpike during a winter storm in Oklahoma City.
Oklahoma’s attorney general office has more than 120 attorneys, including consumer protection experts. But Drummond said his office needs to contract with outside attorneys with even more expertise.
Drummond said legal fees will be “capped at a reasonable amount.”
Drummond would not speculate on a timeline or predict when a lawsuit would be filed. But he said his first six months in office should prove he acts quickly.
Drummond was elected last year after beating the Republican incumbent who Gov. Kevin Stitt had selected to fill the open seat.
A person uses a snowblower Feb. 17, 2021, to clear their driveway in Yukon.
Drummond, also a Republican, already has announced several investigations into financial mismanagement within the governor’s office and involving state schools Superintendent Ryan Walters.
This article originally appeared on Oklahoman: Oklahoma attorney general will target companies who hiked prices in winter storm
Ben Felder, Oklahoman
Wed, July 19, 2023
Attorney General Gentner Drummond speaks Tuesday during a news conference at the state Capitol in Oklahoma City.
Oklahoma Attorney General Gentner Drummond says he is prepared to file the largest lawsuit in state history to recoup billions of dollars in natural gas costs from a 2021 winter storm, which left Oklahoma ratepayers with significantly higher utility bills.
Drummond announced Tuesday he is soliciting bids for outside legal help in pursuing the case.
An initial investigation found no wrongdoing by oil and gas firms and utility companies like Oklahoma Gas and Electric Co., Drummond said.
Instead, he accused natural gas marketers of reducing supply as demand rose to combat frigid temperatures, resulting in a cost spike.
“Several companies reaped billions of dollars at the expense of Oklahoma families and businesses,” Drummond said during a news conference at the state Capitol. “The magnitude of this scheme is staggering and unconscionable. The conduct in question is well outside the parameters and boundaries of ordinary capitalism.”
Crews work Feb. 17, 2021, to clear snow from the parking lot of the The Market at Czech Hall in Oklahoma City.
Drummond would not name any potential lawsuit targets but said most are based outside the state.
Dozens of providers sold natural gas to Oklahoma utilities. Last year, the Public Utility Division of the Oklahoma Corporation Commission released the list of vendors the utilities did business with during Winter Storm Uri, which brought record-low temperatures in February 2021, resulting in more than $3 billion in higher natural gas costs.
More: Who got paid during the February 2021 storm? More than 65 Oklahoma companies split a $3 billion+ pot
To avoid customer bills increasing by hundreds if not thousands of dollars, state officials allowed utility companies to use state-backed bonds to pay off the high costs and recoup that money from customers over the next two decades.
State officials, utility companies and the Oklahoma Corporation Commission, which regulates the oil and gas industry, said using state bonds was the most logical response.
But Oklahomans still expressed frustration at higher utility bills and an energy sector that appeared to be caught flat-footed during an era of climate change-caused extreme weather.
Snow covers rooftops Feb. 17, 2021, in Oklahoma City.
“The companies who reaped billions of dollars on the backs (of) hard-working Oklahomans must be held accountable," AARP Oklahoma State Director Sean Voskuhl said Tuesday. "Oklahoma utility customers want action to be taken against the companies who bilked customers out of billions of dollars in a matter of days during Winter Storm Uri and further demand the recovered funds are returned to customers immediately.”
Corporation Commissioner Kim David, elected last year to the three-person board, praised Drummond for not holding liable oil and gas companies, which contribute millions in campaign donations to corporation commissioners.
More: Energy firms help fund candidates seeking to regulate Oklahoma's oil and gas sector
“I am thankful for confirmation that no wrong-doing was done by the Corporation Commission, Oklahoma’s regulated utilities, or the producers of oil and gas," David said in a statement.
A man walks along NW 164 as an Oklahoma City Public Works truck plowing snow approaches Feb. 17, 2021, in northwest Oklahoma City.
David also said she hoped a lawsuit would result in overpayments being "returned to Oklahoma ratepayers.”
Bob Anthony, a longtime commissioner who has been critical of the state's response to the high storm costs, said he welcomed Drummond's investigation but felt more should have been done years ago.
"Although I greatly appreciate the attorney general's willingness to investigate and perhaps even prosecute market manipulators who profited billions on the backs of Oklahoma utility customers, the A.G.'s efforts come two years late because the Oklahoma Corporation Commission refused to do its duty and protect ratepayers from fraud and market manipulation," Anthony said in a statement.
The state of Kansas filed a lawsuit earlier this year against a natural gas company it accused of manipulating the market during Winter Storm Uri.
Vehicles travel west Feb. 14, 2021, along the John Kilpatrick Turnpike during a winter storm in Oklahoma City.
Oklahoma’s attorney general office has more than 120 attorneys, including consumer protection experts. But Drummond said his office needs to contract with outside attorneys with even more expertise.
Drummond said legal fees will be “capped at a reasonable amount.”
Drummond would not speculate on a timeline or predict when a lawsuit would be filed. But he said his first six months in office should prove he acts quickly.
Drummond was elected last year after beating the Republican incumbent who Gov. Kevin Stitt had selected to fill the open seat.
A person uses a snowblower Feb. 17, 2021, to clear their driveway in Yukon.
Drummond, also a Republican, already has announced several investigations into financial mismanagement within the governor’s office and involving state schools Superintendent Ryan Walters.
This article originally appeared on Oklahoman: Oklahoma attorney general will target companies who hiked prices in winter storm
Rachel Adams-Heard
Tue, July 18, 2023
(Bloomberg) -- Oklahoma Attorney General Gentner Drummond may bring a natural gas market manipulation case related to the 2021 winter storm that drove energy prices to record highs and left millions of people in the dark.
Drummond held a news conference on Tuesday morning in Oklahoma City and said he plans to retain outside counsel to pursue a possible lawsuit. He indicated that natural gas marketers are a likely target.
“It will probably be the most significant lawsuit filed by the state of Oklahoma in its history,” Drummond said. “Broadly, there are no parameters on the scope of the investigation.”
After Kansas became the first state to file a lawsuit alleging natural gas market manipulation during Winter Storm Uri, Drummond announced in March that he was reviewing whether similar circumstances existed in Oklahoma. In the Kansas case, state Attorney General Kris Kobach’s office is accusing Macquarie Energy LLC of buying next-day gas at a key midcontinent hub at “irrational” prices during the storm — a move the suit says artificially inflated prices by “hundreds of dollars” per million British thermal units. The case was moved from a state district court to a federal court in May.
Kansas AG Says Macquarie Rigged Gas Market During 2021 Freeze
When asked whether Macquarie would be involved in the Oklahoma case, Drummond said that “generally, most of the companies that manipulated the marketing price are outside Oklahoma.”
“If you follow the data, it appears as thought there was a short squeeze,” Drummond said. “Certainly, natural gas marketers could do it again, and I will sue them.”
Macquarie has previously said it doesn’t comment on active litigation.
Drummond, a Republican who took office earlier this year, is Oklahoma’s third attorney general since Uri. Mike Hunter, who held the position during the storm, announced an investigation in the days after natural gas prices soared to all-time highs. He abruptly resigned just a few months later and was replaced by John O’Connor, who warned he would file multiple lawsuits against oil and gas companies, but later walked that back.
Following the storm, Oklahoma paved the way for utilities to issue billions in ratepayer-backed bonds in order to spread out the costs incurred due to all-time high energy prices. Drummond said Tuesday that if a lawsuit is successful he would work to make sure any recovery is seen by consumers. He also noted that the bonds include so-called claw back provisions.
Texas Attorney General Ken Paxton, who’s facing an impeachment trial, also announced an investigation into potential natural gas market manipulation following the storm, but hasn’t brought a case. On Tuesday, Drummond said he would be “happy to partner” with his counterparts in Texas and Kansas.
“I am aware of what Texas and Kansas are doing,” he said. “I think that we will do it better.”
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