https://arstechnica.com/tech-policy/2021/11/natural-gas-customers-in-texas-get-stuck-with-3-4-billion-cold-snap-surcharge/ Skip to main content * Biz & IT * Tech * Science * Policy * Cars * Gaming & Culture * Store * Forums Subscribe [ ] Close Navigate * Store * Subscribe * Videos * Features * Reviews * RSS Feeds * Mobile Site * About Ars * Staff Directory * Contact Us * Advertise with Ars * Reprints Filter by topic * Biz & IT * Tech * Science * Policy * Cars * Gaming & Culture * Store * Forums Settings Front page layout Grid List Site theme Black on white White on black Sign in Comment activity Sign up or login to join the discussions! [ ] [ ] [Submit] [ ] Stay logged in | Having trouble? Sign up to comment and more Sign up Texas -- Natural gas customers in Texas get stuck with $3.4 billion cold-snap surcharge State oil and gas regulator will allow exemptions from winterization mandates. Tim De Chant - Nov 12, 2021 10:05 pm UTC Natural gas customers in Texas get stuck with $3.4 billion cold-snap surcharge Enlarge Getty Images reader comments 227 with 133 posters participating, including story author Share this story * Share on Facebook * Share on Twitter * Share on Reddit Texans will be paying for the effects of last February's cold snap for decades to come, as the state's oil and gas regulator approved a plan for natural gas utilities to recover $3.4 billion in debt they incurred during the storm. The regulator, the Railroad Commission, is allowing utilities to issue bonds to cover the debt. As a result, ratepayers could see an increase in their bills for the next 30 years. Further Reading Texas gov knew of natural gas shortages days before blackout, blamed wind anyway During the winter storm, natural gas prices spiked as cold temperatures drove demand up while also depressing supply. Much of Texas' natural gas comes from fracking, which uses large amounts of water. To prevent the wellheads from freezing, many producers shut-in their wells in advance of the storm. The governor's office knew of the looming shortages days before they happened, yet the preparations they made did little to alter the course of the disaster. The shortfall caused a cascade of effects throughout the state. Many wells run on electricity, but the state lost half its generating capacity. Many natural gas-fired power plants had to shut down because they weren't weatherized--their equipment was literally frozen. Even those that could operate had a hard time receiving gas because of the wells that were either shut in or frozen. Power producers paid an extra $8 billion to gas producers during the five-day storm. Advertisement Gas sellers made record profits in just a few days, together bringing in as much as $11 billion, about 70-100 times more than normal, based on spot prices at the time. Meanwhile, many Texans suffered through blackouts and bitter cold, and 210 people died, according to the latest estimate from the Texas Department of State Health Services. Calls for winterization In the wake of the storm, many officials have called on utilities and oil and gas companies to winterize their operations. In a law passed in May, the Railroad Commission was given the authority to write regulations for critical gas infrastructure, including winterization. But facilities have to voluntarily submit forms declaring that they're critical infrastructure, and the regulator says that the law includes a loophole that allows gas producers, for $150, to file for an exemption from winterizing wellheads. (The fee amount is laid out in another Texas law, which lawmakers apparently overlooked.) Winterizing a wellhead, on the other hand, can cost tens of thousands of dollars. Further Reading Minnesotans furious that they have to pay for Texas' deep-freeze problems Texans aren't the only ones whose bills are higher as a result of producers' and utilities' unwillingness to winterize their equipment. Utilities around the country were forced to buy natural gas at significantly higher prices when Texas' markets went haywire as a result of low supply and high demand. Ratepayers as far away as Minnesota will be paying surcharges for years to come after their utilities had to pay $800 million more than expected for natural gas. "The ineptness and disregard for common-sense utility regulation in Texas makes my blood boil and keeps me up at night," Katie Sieben, chairwoman of the Minnesota Public Utility Commission, told The Washington Post in April. "It is maddening and outrageous and completely inexcusable that Texas' lack of sound utility regulation is having this impact on the rest of the country." reader comments 227 with 133 posters participating, including story author Share this story * Share on Facebook * Share on Twitter * Share on Reddit Tim De Chant Tim De Chant covers technology, policy, and energy at Ars. He has written for Wired, The Wire China, and NOVA Next, and he teaches science writing at MIT. De Chant received his PhD in environmental science from the UC-Berkeley. Email tim.dechant@arstechnica.com // Twitter @tdechant Advertisement You must login or create an account to comment. Channel Ars Technica - Previous story Next story - Related Stories Today on Ars * Store * Subscribe * About Us * RSS Feeds * View Mobile Site * Contact Us * Staff * Advertise with us * Reprints Newsletter Signup Join the Ars Orbital Transmission mailing list to get weekly updates delivered to your inbox. 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