Murphy Law Resolves Winter Storm Uri Natural Gas Case
Updated: Nov 28, 2022
Following the charges to natural gas consumers during the February 2021 Winter Storm Uri, Mark Murphy pursued Federal Court action to protect his client from billings of more than 65 times the charges for the previous year's February period. This was a widespread occurrence for users all across the midwest who obtained their natural gas from marketers rather than state-regulated companies.
In February 2021, the Midwest region of the U.S., including Overland Park, Kansas experienced a winter weather event producing abnormally low temperatures. The storm has been commonly referred to as Winter Storm Uri. This storm caused natural gas pricing to skyrocket to more than 65 times its normal cost to consumers.
On February 14, 2021, Kansas Governor Laura Kelly issued a State of Disaster Emergency Proclamation due to Winter Storm Uri. On February 15, 2021, the State Corporation Commission of the state of Kansas issued its Emergency Order. The Emergency Order recognized that wholesale natural gas pricing was increasing from “10 to 100 times higher than normal.” That Emergency Order required all energy companies it regulates to provide services at normal costs, and defer extraordinary costs to a regulatory asset account, which would allow ratepayer recovery to be addressed in future proceedings.
On March 9, 2021, the Commission issued its order opening investigations regarding the impacts of Winter Storm Uri on natural gas prices. By its order, the Commission prevented Kansas residents from being charged the excessive and outrageous prices by the companies it regulates, which include Kansas Gas Service, preventing them from price gouging/taking advantage of a disaster. As such, the Kansas ratepayers were charged costs in line with the normally expected costs for this time period.
Unfortunately, those orders did not protect the thousands of consumers who contracted with natural gas marketing companies who tout their ability to deliver natural gas to consumers at costs less than the regulated companies such as Kansas Gas Service.
In response, Murphy Law filed a Federal action to protect its client from the costs billed to it which were more than 65 times what it was charged the previous year. Billings like this can easily cause a small business to close its doors when expected costs are in the $2,000 to $3,000 range, but the charges received exceed $100,000 and more.
After the case was initiated, the parties proceeded down the litigation process, but kept discussions going about potential resolution. The matter has now been resolved and Murphy Law's client is able to continue its business operations without the financial disaster that the original billing posed.