February’s storm caused major shortages to the natural gas supply chain, which caused prices to skyrocket by 10,000%. It’s why U.S. Rep. Joaquin Castro of San Antonio introduced a bill Wednesday that would prevent natural gas price gouging during a declared emergency.
“While Texas families faced life or death situations and struggled to stay warm amid freezing temperatures, natural gas sellers raked in over $10 billion in profits by raising prices as much as 10,000-percent,” Castro said in a statement. “This bill will identify those who have unfairly profited from the Texas winter storm and put in place safeguards to prevent any future entity from price gouging Americans during an emergency. Texans in need should not pay for the greed of oil and gas corporations trying to profit off of their misery.”
U.S. Rep. Lloyd Doggett is an original cosponsor of the bill as well.
If the bill passes it would be up to the Commodity Futures Trading Commission to determine what the ceiling limit on natural gas prices would be.
“If that emergency comes around, it’s going to help keep the bills lower through limiting the extent to which natural gas sales can then accelerate in these various marketplaces,” Taylor Collins, Ph.D. Economic Chair University of Incarnate Word said. Collins, the Economic Chair at the University of Incarnate word said if passed— yes—this would benefit consumers from seeing those prices in the future end up on their utility bills.
However, he said it’s not fixing the root causes. “Those underlying problems are still there and still do expose us to blackouts that come from extreme weather environments like this,” Collins said.
David Macpherson, Ph.D., EM Stevens Professor of Economics, with Trinity University agrees. He said it’s a Band-Aid solution. He believes the focus needs to be on winterizing equipment to prevent the supply shortage in the first place.
“That’s really what they should be doing right, making sure we got enough supply of gas during winter storms rather than capping the price,” Macpherson said. “That is the best solution.”
It’s still uncertain if CPS Energy customers will be paying for those natural gas price hikes from February. CPS Energy is more than likely to propose a rate increase in the near future. The latest working estimate is around 8.2%. It is important to note that not all of this increase is from the winter storm but also overdue bills and much-needed infrastructure upgrades. City Council would have to approve any rate increase before passed.