The Municipal Gas Commission of East Central Missouri submitted a letter to Attorney General Eric Schmitt requesting he address alleged price gouging by natural gas providers that occurred after a winter storm earlier this year.
The commission, consisting of Hermann, New Haven, New Florence, Berger, and Middletown, was billed $1.5 million for February when the normal invoice would have been some $268,000, according to Mark Wallace, chairman of the Municipal Gas Commission of East Central Missouri.
“From February 13th through the 16th, the daily price was 80 times the first of the month gas price,” Wallace wrote in the March 29 letter. “Although these prices were applied only to incremental gas quantities, the effect of this price gouging was devastating. There was no supply shortage, only greed and price gouging via those who 'set' the price via trades reported to Gas Daily.”
As previously reported, local politicians are critical of Schmitt whom they say has yet to act on the surge in natural gas pricing.
“There were numerous towns and parties impacted well beyond these five towns across several states in the Midwest,” said Ron Ragan partner with Utility Gas Management (UGM). “Any communication is to get the attention of legislators relative to the price gouging that occurred.”
UGM is the company that the Commission contracted with to purchase natural gas for their five towns.
“Mr. Ragan saw this illegal gouging coming and asked all of the cities that he works for to have citizens reduce their usage,” Wallace told the St. Louis Record. “This alone saved us thousands. He has also been in the forefront, talking to several states and their legislators to pursue litigation and monetary fines.”
Residents impacted by the alleged price gouging and market manipulation were served by pipelines that included Southern Star, Panhandle Eastern Pipe Line (PEPL), Enable Gas, ANR Pipeline, NGPL, Oneok, Northern and Northern Border
“The damage could be in the hundreds of millions of dollars,” Ragan told the St. Louis Record. “Attorney generals across multiple states are trying to determine what if any laws were violated.”
If no action is taken, costs could be spread among consumers through a monthly price increase. For example, the St. Louis Record reported the town of Macon voted to bill their residential users an average of $14 per month to cover $1.8 million
“Cost increases can vary significantly since some towns may choose to not pass on entire costs and these towns may receive significant credits from PEPL for penalties assessed to others who did not comply with the pipeline operational flow orders, which could significantly reduce the impact,” Ragan said.
Wallace alleges in his letter that natural gas traders violated the Missouri Merchandising Practices Act however Ragan alleges the problem is bigger than just the MMPA.
“Other states have anti-profiteering laws and price gouging laws which may have been violated,” Ragan added.