According to court documents filed in Kansas,Macquarie and the other suppliers to local distributors called a force majeure event during the storm,which allowed them to rip up their contracts with the distributors and put in place new contracts with vastly inflated prices.
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“Those force-majeure declarations were false,” the class actions allege. “Though demand for natural gas during Winter Storm Uri did increase,distributors in Kansas did not run out of natural gas.
“Indeed,though numerous distributors and producers relied on stored natural gas,the Southern Star Central Gas Pipeline never lost pressure during Winter Storm Uri,nor did the incremental gas going into the Southern Star Central Gas Pipeline increase in any significant measure.”
According to the claims,gas prices on the pipeline rocketed to astronomical levels during the storm,rising from $US2.50 at the start of the usually cold February to $US9.62 on February 11 as weather forecasts indicated a major weather event,before soaring to $US329.595 on the first day of the storm on February 13. They again jumped to $US622 on February 17 as the storm continued to wreak havoc in the region.
“As a result of defendants’ illegal profiteering,plaintiffs have suffered damages,” the class actions allege.
The class actions are seeking to cover customers of four major retail energy distributors in Kansas who will over the next five years pay hundreds of millions of dollars in special levies on their energy bills.
The charge was part of a separate court ruling in Kansas to allow local distributors to recoup funds after being forced to pay for skyrocketing gas prices. As a result of the ruling,the class action argues that the energy suppliers that allegedly drove the gas price higher – forcing retail energy distributors to pay huge prices – ought to compensate Kansas’ energy consumers.
Macquarie and the other energy suppliers have asked the court to throw out the cases. The companies argue that Kansas consumer law limits claims for damages to companies with a direct relationship with consumers,which would be the energy distributors rather than the suppliers to the distributors.
They also argue that the increase in prices at the time of the storm were driven by a range of factors and there was no price gouging. A spokesperson for Macquarie said:“Macquarie continues to defend vigorously both the Kansas class actions and the Kansas Attorney-General’s claims.
“Macquarie Energy LLC is just one of 100-plus US energy suppliers involved in ongoing litigation matters stemming from their role in maintaining critical energy supply during unprecedented freezing weather events across the United States in February 2021.”
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Spokespeople for BP and Chevron declined to comment.
In regards to the Kansas attorney-general’s case,the state was given leave by the District Court of Kansas,a federal US court,to refile its case last year after it initially incorrectly filed the case in state court before having to move to a federal court.
Under US law,even if a federal court can hear a case after it has been moved from state court,the act of filing in a state court when it does not have jurisdiction removes the jurisdiction of the federal court. The case has since been refiled in the District Court of Kansas.
The Macquarie spokesperson said:“Macquarie was successful in its motion to dismiss the Kansas Attorney-General’s original lawsuit in the United States District Court of Kansas.
“The Kansas Attorney-General has recently filed a further case. Macquarie continues to be confident in its position regarding the Kansas attorney-general’s claims.”
The court will soon consider arguments on whether to consolidate the four cases and the Kansas attorney-general cases.