Natural Gas ‘Anomalies’ During February 2021 Freeze Point Call for Market Monitor
This op-ed is part of a series published by the Opinion section of the Dallas Morning News to explore ideas and policies to boost electrical reliability. Find the full series here: Keep the lights on.
A funny kind of thing happened in the natural gas markets during the deadly February 2021 freeze and blackout.
That’s according to Federal Energy Regulatory Commission Chairman Richard Glick when he said the commission had found some business “anomalies.” According to Houston ChronicleGlick told reporters that FERC was investigating.
During last year’s winter freeze, millions of Texans lost power because power plants stopped working. Some factories froze due to a lack of winter maintenance, and some were unable to get natural gas when pipelines and other equipment froze. Electricity and natural gas prices have soared, raising concerns that some industry players have taken advantage of the emergency to boost their profits.
The Texas Railroad Commission, which regulates oil and gas in Texas, has so far declined to investigate, saying the commission has no authority over private, exclusive gas pipeline contracts between buyers and sellers.
Fair enough; no one wants the government to meddle in private contracts and free market transactions. The problem may seem insoluble. But, O Fortuna, a solution has recently popped up among Texas policymakers: a gas market monitor.
It’s an idea that the Executive Director of the Electric Reliability Council of Texas, Brad Jones, floated last month, and one that we support. This is similar to the pattern of electricity markets, which are observed by an independent market monitor employed by the Public Utility Commission.
The idea is that this person would follow and observe market movements to identify any fraud, manipulation or anomalies and get to the bottom of it. The PUC hired an independent market monitor after a case of market manipulation, and the monitor acts as both a watchdog and a deterrent.
Texas regulates the open wholesale electricity market with strong safeguards, such as hiring an independent market monitor, because electricity is vital to our health and economy. Natural gas is also vital because it powers about half of Texas’ electricity and provides heat to many homes and businesses. Natural gas regulators should hold their industry to standards that mirror those of electricity regulators.
We were pleased that state senators in a recent hearing before the Business and Commerce Committee were receptive to the idea of demanding more transparency and standards in the natural gas sector. While Railroad Commission Chairman Wayne Christian said the agency lacked the power to oversee gas markets, senators said part of the agency’s mission was to ensure fair use.
“I hope the commission understands… that you all have a proportional responsibility, especially in times of crisis, to make sure the gas is flowing, to make sure the industry acts in the right way and does not use its mechanisms legal. .. to disadvantage the people and cause undue expense and hardship to Texans,” said committee chairman Charles Schwertner, R-Georgetown. He offered to pass the legislation at the next session.
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