And by “enjoy”, I mean “blame Greg Abbott”.
Texans are on the hook for $3.6 billion in natural gas costs incurred by utilities during one freezing week in February — a burden consumers will bear for a decade or longer.
During that same winter week, several natural gas pipeline companies and traders made billions of dollars as they transported and sold natural gas at sky-high prices when supplies were short.
Pipeline companies Energy Transfer of Dallas and Kinder Morgan of Houston made $2.4 billion and $1.1 billion, respectively, while British oil major BP made more than $1 billion from its natural-gas trading business during the deadly, historic storm, according to company filings and analyst estimates. Houston pipeline company Enterprise Products Partners said it made $250 million for transporting and selling natural gas at high prices to utilities, industrial customers and power generators during the storm.
Ultimately, Texans will fund these companies’ profits, said Jim Krane, an energy fellow at Rice University’s Baker Institute for Public Policy.
“It’s pretty clear this is a wealth transfer from the public to investors and traders who could capitalize on the high prices,” Krane said. “The frustrating thing is, even though people were shivering in their homes, their (natural gas) bills are going up anyway. They’re still going to have to pay for this. It’s really a slap in the face.”
More than 1.8 million CenterPoint Energy customers in the Houston area are responsible for the $1.14 billion natural gas bill incurred by the Houston utility when it had to quickly buy natural gas at sky-high prices after demand soared and supplies plunged during the storm.
Utilities such as CenterPoint pass along the cost of natural gas to customers without any markup and instead make money on its natural gas business through state-regulated distribution fees.
CenterPoint on Friday filed a request with regulators to finance the billions of dollars in excess gas costs. The paperwork submitted to the Railroad Commission outlined how much the financing would cost Houstonians in the coming years, reflected in their monthly bill.
The average natural gas bill in the Houston area — about $30 — could go up by $2 to $5 a month starting next year if CenterPoint is allowed to use state-issued bonds to finance what it owes for that high-priced gas. That means Houstonians could pay as much as $60 more a year for their natural gas over the next decade.
If CenterPoint’s request is rejected, it would levy a fee of $15 to $40 a month over the next year, pushing the average gas bill to almost $80 during summer and to more than $100 in winter. That means Houstonians could pay as much as $480 more for their natural gas over the next year.
The cost would hit everyone in CenterPoint’s territory, even if they couldn’t turn on their natural-gas heating systems because of rolling blackouts, Krane said.
“You either buy your local bill collector a six-pack or a gym membership,” Krane said. “It’s not insubstantial. For some people, it’s going to be pretty tough news if you’re just hanging on.”
See here for some background. As a reminder, this is how the system was designed to work. And of course, Greg Abbott benefited from that transfer of wealth, because that too is how the system is designed to work.