Kansas groups sue natural gas producers, suppliers over charges from February 2021 winter storm

The lawsuit claims natural gas providers violated the Kansas Consumer Protection Act by charging customers exorbitant prices during a disaster declaration.
Published: Sep. 15, 2023 at 8:50 PM CDT
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WICHITA, Kan. (KWCH) - A group of Kansans is taking natural gas producers and suppliers to court as part of new class action lawsuits filed this week.

More than two years after historic cold temperatures caused a sharp increase in price and demand for natural gas, Kansas Gas Service customers were tasked with paying an extra $5.64 per month as the utility recovers the costs it paid suppliers for natural gas in February 2021.

The charge will last for 10 years. But the new lawsuits hope to help Kansans recover those costs.

“No action has been brought to get reimbursement for those excessive charges and we thought it was time to do so,” said Jay Fowler, an attorney for the plaintiffs.

Fowler is representing two groups of Kansans who are part of class action claims against natural gas suppliers and wholesalers. The companies provide natural gas to utilities like Kansas Gas Service.

Natural gas prices at the beginning of February started out at about $2.50 per unit. Near the middle of the month, historic cold weather hit much of the central U.S. Low temperatures in Kansas dipped below freezing for several days with high temperatures in the single-digits and teens for nearly two weeks.

It created a drastic increase in demand for natural gas. At the same time, production stalled out mainly in Texas as wellheads froze and electricity was lost.

Prices for natural gas soared reaching more than $600 per unit by the middle of the month, according to the lawsuit - a 2,400-percent increase.

“In our view, the suppliers weren’t paying those higher prices because they already had the gas in inventory or in process and actually paid much lower prices than what was charged,” said Fowler.

He said what suppliers charged customers violated the Kansas Consumer Protection Act because a state disaster declaration was in place.

“If there is an emergency, then, a supplier can’t sell goods to a consumer at more than 125% of the cost that existed before the emergency was declared. It’s designed to prevent price gouging,” Fowler said.

The lawsuit states that what suppliers charged left Kansas Gas Service with $366 million in deferred costs that have been passed onto customers.

For the Kansas Municipal Gas Agency, which serves city-run utilities, cities took out a total of $36 million through a low-interest loan program to cover the high costs.

The lawsuit names eight natural gas producers, supplies and wholesalers. The top among them is BP. Those companies said they can’t comment on pending litigation.