Rep. Joaquin Castro will introduce a measure on Wednesday to avoid soaring natural gas prices during natural catastrophes, putting a stop to what happened in Texas‘ energy market during the fatal winter storm in February. The law would also establish a government investigation into which firms profited billions from the February freeze. According to Bloomberg, the crisis resulted in an $11 billion windfall for natural gas producers.
Natural gas prices skyrocketed to never-before-seen heights in Texas during the February freeze, killing more than 200 people and costing an estimated $300 billion in economic damage. To keep power plants running, certain public and private power suppliers were required to purchase natural gas on Texas‘ deregulated market. However, during government-sanctioned emergencies, Castro’s measure would impose price ceilings on natural gas.
Natural gas prices have skyrocketed, forcing one power cooperative to declare bankruptcy. CPS Energy, the largest municipal utility in Castro’s hometown of San Antonio, Texas, has filed a lawsuit after racking up more than $1 billion in natural gas bills during the winter storm. In addition, state lawmakers enacted “securitization” bills this year in the ordinary session of the Legislature, allowing power companies to fund debt with bonds backed by electric bills. According to the law, homeowners would be responsible for decades to pay off the energy companies’ storm bills.