Governor Parson says the state won’t tolerate price gouging from natural gas providers
JEFFERSON CITY, Mo. (KMIZ)
After the polar vortex caused several issues for natural gas and electricity service providers, the governor of Missouri is getting the attorney general involved to look into any potential price-gouging.
The city of Fulton had to pay more than $3 million dollars out of its gas reserve fund to pay the commodity price, set by wellhead operators in other areas of the country. The city's reserve was around $5 million and is now around $1.8 million after just four days.
"We will not tolerate any effort to price gouge or take advantage of customers at a time when there is no other choice or alternative options," Governor Parson said Thursday at his press briefing.
He said his office has involved the attorney general, and will "use all resources possible to stop any kind of illegal behavior."
Fulton city leaders say they have been in contact with the governor's office, as well as state and federal legislators. During an emergency meeting on Tuesday, the mayor said he hoped for emergency funding from the government to help offset the price hikes.
Governor Parson said he wants the attorney general to look into the issue first before sending out any emergency financial aid to cities and communities.
"I don't want people to be taken advantage of, just because we are finding a way to pay some corporation money that's making millions and millions of dollars off of a natural disaster," Parson said. "I want to make sure that's not happening."
He said this issue has come up on some federal calls with other governors. He said the state has ways to help out these communities.
"We do have the ability to help in some situations, especially with individuals like we are," Parson said. "I'm not sure what is going to come down to cities and counties when you start trying to backfill that loss."
While Fulton city leaders say this expense will not be passed on to customers right now, increased rates may come in the future to replenish some of the reserve funds.
This issue spans Missouri and other Midwestern states. Vice President of Government Affairs for the Missouri Public Utility Alliance (MPUA) Ewell Lawson said several of their members have reported similar issues as Fulton, draining millions of dollars from reserve funds.
"These are the costs that the city bears, then the city must take the citizen's money, pay for that, and recoup that money from the end customer," Lawson said.
He said it has taken these communities several years to build up reserve funds, which are used for large-scale projects and maintenance.
"They may have to put off infrastructure improvements to maintain the health of the system, and other activities in the city, even if it impacts some of the other utilities," Lawson said.
MPUA has been in contact with the governor, attorney general and legislators about solutions for the issue. He said the federal emergency declaration may not help with this "economic crisis."
"It is our hope that there will be a review of this," Lawson said. "When you spend an entire budget for a year in a 4-day span, there has to be something that must be looked at as to what the impact may be and how to handle that moving forward."
Some cities and communities have had to take out loans to pay for the almost 1,900-percent increase in prices. Lawson reiterated that this is impacting non-for-profit city utility providers.
Lawson said this will also start to impact electricity prices in the long run, saying natural gas is a source of energy.
"That's what we've seen some of the issue as it relates to some of the outages on a metric side," Lawson said.
ABC17 News reached out to the Attorney General's office, who said it was monitoring the issue.
