The American Public Power Association (APPA) and the American Public Gas Association (APGA) recently issued a letter to president Joe Biden urging him to use the Natural Gas Policy Act (NGPA); so, he could declare an emergency supply and cap natural gas prices.
Firstly, the NGPA would empower the Secretary Of Energy to exercise delegated authority under section 302 of the act; consequently he could cap the price for purchases of natural gas from producers, or other persons to the extent authorized by the NGPA.
Secondly, in a letter issued on February 19, and made public this Tuesday, APPA and APGA noted the freezing storm that hit the U.S. Midwest and particularly Texas sparked prices unreasonably; after higher demand and constrained and freezing natural gas wells and pipelines.
As a result, natural gas prices, which had hovered around $3/MMBtu, skyrocketed to upwards of $300/MMBtu and even higher in some cases, APPA and APGA pointed out.
“With demand for natural gas rising in response to the cold temperatures, our members had no choice but to purchase gas at the inflated prices; or pay even steeper penalties to ensure that our members could meet their communities’ energy needs,” the letter said.
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APPA and AGPA believe such action would help with financial crisis
The increase in prices is also palpable in the Southwest Power Pool (SPP) and the Midcontinent Independent System Operator (MISO). Which, “in turn, has impacted the spot prices of electricity, compounding the financial burden on many of our not-for-profit utility members.”
In addition, the associations urged Biden to act under the NGPA to cap prices and protect utilities and producers alike.
As we have reported previously, the increase in prices has become an energy crisis; as many customers are receiving unpayable power bills. In fact, FERC and other regulators are investigating whether energy companies boosted prices artificially, or committed any frauds.
“Moreover, limiting the price of gas to a fair and equitable level, would assist in meeting the requirements of such high priority uses. While the natural gas supply emergency authority has been used sparingly; we believe this financial crisis is significant enough to merit such action.” The letter underlined.
The Biden administration has not yet commented on the matter. Finally, the letter was signed by Joy Ditto, President and CEO of APPA; and also Dave Schryver, President and CEO of APGA.