The National Public Gas Agency Board of Directors held a special meeting in early April to receive an update of financial impacts caused by February’s extreme weather event and considerations of potential financial assistance to NPGA members hit with exorbitant natural gas bills.
The unprecedented extreme weather event caused natural gas supply constraints and overwhelming usage demand which resulted in soaring gas prices throughout the region. Several NPGA members were forced to purchase natural gas under the extreme market conditions to keep gas glowing to residents to heat their homes and meet human needs during the extreme cold. The overall combined preliminary estimated financial impact to affected NPGA’s members is estimated at $2.7 million.
NPGA’s diverse natural gas portfolio consists of pre-arranged gas purchases, storage gas, and monthly gas purchases on the first-of-the-month spot market. It’s important to note that 100 percent of anticipated gas needs for NPGA members for February monthly usage was purchased prior to Feb. 1. However, the extreme weather event caused the usage of impacted NPGA members to more than double, forcing natural gas purchases to be made during the extreme weather event on the intraday market, where prices were astronomically higher.
In the aftermath of the event, NPGA staff joined other testifiers in front of the Nebraska Legislature’s Urban Affairs Committee in March, providing information regarding the event and the significant impacts to some of its members. The committee, chaired by Sen. Justin Wayne, advanced an amendment to a bill (LB 131) to the full Legislature that would provide funding in emergency aid to communities impacted by exorbitant natural gas bills.
At the federal level, the Federal Energy Regulatory Commission announced it will be investigating whether possible price gouging occurred during the event. The American Public Gas Association and American Public Power Association sent a letter to the Commodities and Futures Trading Commission asking for an investigation.
Going forward, NPGA will be reviewing and refining its emergency communication strategy as well as analyzing its gas purchasing procedures and additional storage options as well as monitoring and supporting federal investigations into potential price gouging.