Enterprise Products sues San Antonio municipal utility for $100M gas bill

Oil and gas supplier Enterprise Products Partners on Monday sued CPS Energy, a Texas gas and power utility, alleging failure to pay nearly $100 million for natural gas delivered during the state’s February winter storm.

The lawsuit is the latest to emerge from a severe cold snap that drove prices and demand for natural gas and electricity to hundreds of times their pre-storm levels. Houston gas prices https://bit.ly/3noiRVL hit $400 per million British thermal units (mmBtu) from about $4.50/mmBtu a week earlier.

Enterprise is suing San Antonio municipal utility CPS Energy over payment disputes for sales during the freeze. The suit, filed in a state court in Harris County, Texas, claims CPS owes $99.7 million for gas after paying $36.5 million towards the month’s fuel bill.

“CPS Energy is now engaging in a coordinated plan to avoid paying its bills,” the lawsuit claimed, adding the utility has offered it $38.83/mmBtu for the gas.

CPS Energy CEO Paula Gold-Williams said Enterprise had engaged in “egregious price gauging” and that the lawsuit came after it had tried to negotiate the dispute.

“CPS Energy is committed to protecting its customers from unconscionable prices charged by certain natural gas suppliers,” Gold-Williams said.

A spokesman for Enterprise declined to comment, saying it would let the lawsuit speak for itself.

CPS Energy, owned by the city of San Antonio, previously sued grid operator Electric Reliability Council of Texas seeking to block it from issuing a default for unpaid power charges.

Enterprise next month is expected to report first-quarter earnings that analysts say will benefit from the storm-driven gas price run-up. Kinder Morgan last week reported a roughly $1 billion boost to earnings from selling high-priced natural gas to utilities.

Enterprise could post an around $475 million profit from the storm in its coming report, analysts from consultancy East Daley Capital said in a note last week. (Reporting by Liz Hampton; editing by Barbara Lewis and Richard Pullin)

I retired from the gas industry a few years back, this article makes me curious, the utility was buying the gas on the open market from a supplier, I would assume the utility knew the price they was paying during this time of supply shortage so some agreement had to be made. I would wager that they needed the gas and would deal with the high cost later and that is what we are seeing now. With that said going from 4.50 BTUs to 400.00 BTUs is a major Enron go to jail price increase. I would bet they had the gas in storage and that gas cost them less than 3.00 BTUs when it went into storage and they took advantage of the extreme cold weather to make a big profit. The problem I see is that they got greedy with that profit.

It isn’t.

No more than $10 a foot for a 6x6 or $138 for a roll of romex or 198% increase in the price of steel, neoprene gloves have more than doubled and on and on and on.

I hope they all come to choke on their inventory.

2x4s are down 10% and carpenters in our area are very slowly becoming out of work. Sorry for them, happy to see. The parking lot at the local lumber yard seems to be less full on a consistent basis. I hope what I am seeing is correct.

The housing is insane. Prices have now hit that stupid high speculative range that I hope is similar to what I have seen just before previous crashes. $600K for a 1,650 sf ranch in a remote location on a dirt road, that is asking but not getting. Not 5 years ago I sold a 3,500 sf upscale on a private lake in a gated community in the Houston burbs for $500k with no regrets. The californication is in pockets but they are big ones and it catches fire quickly with internet marketing to spread it. People can and will take baths to sell what they have bought or hold it for a very long time to let normal inflation catch up with them.

The local paper has ended the covid blotter, not enough cases. The giverment is trying to juice up the threat alarm but summer is coming across the south and the cases are dwindling. Yet the giverment is going to push another $2trillion in stimulus and likely extend the enhanced unemployment and other massive benefits for as long as they can.

I had enough of covid opportunism a long time ago. No vaccine for me, also no covid.

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