4 ms·

Natural gas customers in Texas get stuck with $3.4B cold-snap surcharge

37 points by kc0bfv 5y ago

kc0bfv 5y ago
A bit of a follow on from an earlier article: Texas gov knew of natural gas shortages days before blackout, blamed wind anyway https://arstechnica.com/tech-policy/2021/05/texas-gov-knew-of-natural-gas-shortages-days-before-blackout-blamed-wind-anyway/ https://arstechnica.com/tech-policy/2021/05/texas-gov-knew-o... https://news.ycombinator.com/item?id=27234151 https://news.ycombinator.com/item?id=27234151
peter303 5y ago
Colorado utilities are trying to pass on a half billion dollar gas price surcharge from the same week as the Texas disaster.
peter303 5y ago
I wonder who made a fortune from the Feb 2021 price surge? Spot market contracts have a counter party who bets prices will go the other way.
- deleted 5y ago
  [deleted]
- wcoenen 5y ago
  It's either a spot market (i.e. immediate delivery) or a contracts market (e.g. futures, options, CFD). I don't think there is such a thing as a "spot market contract". In this case the price spike happened on a spot market. The buyers simply needed more gas than was available for sale. So the profits simply went to to the producers that had any gas to sell. Edit: this Reuters article names some companies that raked in profits: The biggest winners were companies with access to supplies, including leading energy trader Vitol, gas suppliers Kinder Morgan (KMI.N), Enterprise Products Partners (EPD.N) and Energy Transfer (ET.N), oil giant BP plc (BP.L), and banks Goldman Sachs (GS.N), Bank of America (BofA) (BAC.N) and Macquarie Group (MQG.AX). https://www.reuters.com/business/energy/results-tally-up-billions-profit-texas-freeze-gas-power-sellers-2021-05-06/ https://www.reuters.com/business/energy/results-tally-up-bil...
klyrs 5y ago
Meanwhile Oklahoma Natural Gas is hoping to charge a $1400 fee to disconnect gas service, or an $8 monthly surcharge for the next 25 years, to make up their losses this winter.
alisonkisk 5y ago
This is the same scam as healthcare: Sell a product, but don't disclose the price, and the charge the price later. The government authorities should refuse to pay the corporations. Corporations shouldn't get to use government incompetence as a tool to rip off consumers. They should have to deal with counterparty risk, not force individual citizens to do so. Otherwise, they should be subject to a windfall profits tax for the privilege of being a corporation. Corporations are chartered, and get special privileges, to serve the public; they have no natural right to exist.

37 points by kc0bfv 5y ago

A bit of a follow on from an earlier article: Texas gov knew of natural gas shortages days before blackout, blamed wind anyway https://arstechnica.com/tech-policy/2021/05/texas-gov-knew-of-natural-gas-shortages-days-before-blackout-blamed-wind-anyway/ https://arstechnica.com/tech-policy/2021/05/texas-gov-knew-o... https://news.ycombinator.com/item?id=27234151 https://news.ycombinator.com/item?id=27234151

peter303 5y ago

Colorado utilities are trying to pass on a half billion dollar gas price surcharge from the same week as the Texas disaster.

peter303 5y ago

I wonder who made a fortune from the Feb 2021 price surge? Spot market contracts have a counter party who bets prices will go the other way.

deleted 5y ago
[deleted]
wcoenen 5y ago
It's either a spot market (i.e. immediate delivery) or a contracts market (e.g. futures, options, CFD). I don't think there is such a thing as a "spot market contract". In this case the price spike happened on a spot market. The buyers simply needed more gas than was available for sale. So the profits simply went to to the producers that had any gas to sell. Edit: this Reuters article names some companies that raked in profits: The biggest winners were companies with access to supplies, including leading energy trader Vitol, gas suppliers Kinder Morgan (KMI.N), Enterprise Products Partners (EPD.N) and Energy Transfer (ET.N), oil giant BP plc (BP.L), and banks Goldman Sachs (GS.N), Bank of America (BofA) (BAC.N) and Macquarie Group (MQG.AX). https://www.reuters.com/business/energy/results-tally-up-billions-profit-texas-freeze-gas-power-sellers-2021-05-06/ https://www.reuters.com/business/energy/results-tally-up-bil...

klyrs 5y ago

Meanwhile Oklahoma Natural Gas is hoping to charge a $1400 fee to disconnect gas service, or an $8 monthly surcharge for the next 25 years, to make up their losses this winter.

alisonkisk 5y ago

This is the same scam as healthcare: Sell a product, but don't disclose the price, and the charge the price later. The government authorities should refuse to pay the corporations. Corporations shouldn't get to use government incompetence as a tool to rip off consumers. They should have to deal with counterparty risk, not force individual citizens to do so. Otherwise, they should be subject to a windfall profits tax for the privilege of being a corporation. Corporations are chartered, and get special privileges, to serve the public; they have no natural right to exist.