Kansas attorney general re-files lawsuit over alleged 2021 natural gas price manipulation - Kansas Reflector

Kansas attorney general re-files lawsuit over alleged 2021 natural gas price manipulation - Kansas Reflector

Kansas attorney general re-files lawsuit over alleged 2021 natural gas price manipulation

Natural gas prices spiked during a 2021 cold snap. Attorney General Kris Kobach is re-filing a lawsuit on the matter. (Rachel Mipro/Kansas Reflector)

TOPEKA — Kansas Attorney Kris Kobach has renewed a legal fight against the second-largest gas marketer in the U.S., alleging the company gouged Kansans on natural gas prices during an 2021 winter storm.

The new filing comes months after Kobach lost his first suit against the company on a technicality.

The lawsuit, refiled Wednesday in Kansas’ U.S. District Court, alleges Macquarie Energy cost Kansans $50 million in excessive charges by purchasing gas that was transported by Southern Star Central Gas Pipeline at inflated prices. Those charges were passed along to consumers when the Kansas Corporate Commission set out rate hikes for state energy companies to recoup expenditures.

“It’s disgraceful that Macquarie would manipulate prices at a time when Kansans were already hurting from the storm,” Kobach said in a statement. “We will do everything we can to recover what was taken from those Kansans.”

During the stretch of cold weather, temperatures were below freezing in several parts of the state for days, including in Kansas City, where temperatures stayed below 15 degrees for more than a week.

Natural gas prices were about $2.50 per unit in early February of 2021 and began climbing as the weather dropped, increasing to $329.6 per unit by the middle of the month, and staying at that level from Feb. 13-16. On Feb. 17, the price was about 200 times higher than normal, at $622.8 per unit.

“Macquarie entered into an economically irrational natural gas trade, purchasing natural gas for next-day delivery within Southern Star at the single highest price ever paid for Southern Star natural gas,” reads the suit. “No one has ever paid more. Indeed, no one has ever paid any fixed price for Southern Star gas even remotely close to what Macquarie agreed to pay.”

Former Kansas attorney general Derek Schmidt originally began looking into price gouging in 2021, hiring the Florida-based law firm of Morgan & Morgan for the case. Schmidt ran for governor rather than seeking re-election to his position in 2022, and Kobach took over the investigation after he was elected to the office.

Kobach lost his first federal lawsuit on the issue in October due to a technical mistake in the case filing made after he fired Morgan & Morgan. Two attorneys from Nebraska-based law firm Hilgers Graben have joined AG staff attorneys for the refiling.

“Macquarie’s manipulative conduct and trading activity deprived Kansas residents of a lawfully operating natural gas market,” reads the suit.

Jim Zakoura, an energy attorney currently involved in two federal class action lawsuits against several energy companies involving these gas price hikes, said he approved of Kobach’s lawsuit.

“I highly commend the attorney general for the hard work to bring this matter to the federal court,” Zakoura said. “If proven, it puts to an end the position of the natural gas suppliers that the inordinate high price, even compared to the rest of the Midwest, was simply a matter of supply and demand.”

Correction: This story was updated to clarify that Southern Star transports but does not purchase natural gas.

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