(Reuters) – Trade groups representing U.S. public power and natural gas companies urged President Joe Biden to declare a gas emergency for last week’s extreme weather and authorize the secretary of energy to cap the price of gas.
In a Feb. 19 letter to Biden, the American Public Power Association (APPA) and the American Public Gas Association (APGA) said the recent cold weather in the Midwest and Texas boosted demand for electricity at the same time power generation was constrained due to freezing gas wells and pipelines.
Officials at APPA, APGA and the U.S Department of Energy were not immediately available for comment on whether the administration could or would retroactively change gas prices.
That forced utilities and other energy suppliers to pay billions of dollars to buy gas and power for their customers. In addition to heating homes and businesses, gas also powers much of the power generation in Texas and other states affected by the freeze.
Gas prices, which usually trade around $3 per million British thermal units (mmBtu), rocketed to over $300 per mmBtu at some hubs, while power prices, which usually trade around $25 per megawatt hour in Texas, soared to over $10,000 at times.
One public-owned power plant spent $78 million for four days of gas supply, the groups said, noting the fuel for that plant cost only $18 million for all of 2020.
“If no relief is provided, these staggering costs will ultimately have to be borne by utility customers,” the groups said.
(Reporting by Scott DiSavino in New York and Timothy Gardner in Washington; Editing by Steve Orlofsky and Jonathan Oatis)
