FERC official: 'Anomalies' found in natural gas market pricing during 2021 freeze
The chairman of the federal agency that regulates that nation’s energy system said Thursday that an investigation into whether natural gas providers manipulated the electricity market during the February 2021 freeze has uncovered “anomalies.”
During a news conference at CERAWeek, the nation’s largest energy conference taking place this week in downtown Houston, Richard Glick said the Federal Energy Regulatory Commission is unable to investigate aspects of alleged market manipulation because the Texas power grid operates independently and is not subject to federal oversight. But electricity markets on neighboring grids reported potential market manipulation from of the state’s power generators.
“We are investigating potential allegations of manipulation that may have happened in jurisdictional electricity markets, and we did find some anomalies,” Glick said. “Those are being further investigated.”
The investigation comes after the Texas Railroad Commission, which regulates the oil and gas industry in the state, has repeatedly declined to look into reports of alleged market manipulation. During a state Senate hearing Wednesday, Railroad Commissioner Wayne Christian said the agency doesn’t have authority over the natural gas pipeline contracts that established by buyers and sellers in the market. Last year, Commissioner Christi Craddick confirmed that the Railroad Commission doesn’t get involved in pricing or contracts.
“That’s not our role. Our role is to regulate and permit, not to get involved in those contracts,” Craddick said.
Natural gas prices spiked to more than $100 per million British thermal units in West Texas during the freeze, according to The Woodlands-based nonprofit Houston Advanced Research Center, which analyzes energy issues. Before the winter storm, natural gas was selling for an average of about $3 per million British thermal units. Some gas-powered electricity generators and municipalities reported that despite having contracts setting a price for the gas they planned to buy, some providers refused to sell their product at those prices, instead putting their gas on the open market for much higher prices.
Glick said the investigation into those allegations and potential market manipulation will take more time to complete. But if wrongdoing is found, he said, his agency is ready to act.
“One thing I’ve tried to make clear during my chairmanship is that if wrongdoing occurs, or if alleged wrongdoing occurs, we’re going to go after that, and that’s certainly going to be the case in this situation,” he said. “It just takes a while to go through all the evidence.”