FERC said Nov. 20 it has closed its enforcement investigations into possible unlawful activity related to 2021’s Winter Storm Uri, just a few months before the statute of limitations on the issue is to expire.
The storm knocked out power across much of Texas for days, leading to hundreds of deaths, and caused massive electricity price spikes there while driving up natural gas costs across a broad swath of the country.
FERC and NERC quickly released a report on the reliability issues in ERCOT in November 2021, which included recommended changes to winter reliability standards that since have been put in place. (See FERC, NERC Release Final Texas Storm Report.)
The commission released its fiscal 2025 Report on Enforcement at its regular meeting Nov. 20, but earlier versions of the report for 2023 and 2024 explained some of the nonpublic investigations into activity around the storm.
The 2023 version explained how FERC dropped a probe into a natural gas marketer that cited a “force majeure” clause to stop the sale of gas to one customer, which was sold to another, but the agency lacked evidence to move forward on any allegation. Then-Chair Willie Phillips said additional investigations were ongoing. (See FERC Enforcement Report Details One Closed Probe into Winter Storm Uri.)
The 2024 version of the report detailed a couple of other cases FERC opened and then closed without action. One involved market manipulation in the gas sector in which a firm contacted a price index reporter to remove a price on the lower end from their indices during the storm after learning it would have a significant positive financial effect on the company.
Another one involved a probe into a company doing business in CAISO that was alleged to have withheld physical energy during Uri and at other times to drive up prices and secure firm contracts, but it was closed due to a lack of evidence.
FERC does not name the targets of its investigations unless it decides to move forward with a settlement or other enforcement actions.
“I would not speak to any nonpublic investigations before the commission makes them official,” Chair Laura Swett said at post-meeting press conference. “There’s a reason for that regulation: It’s to protect the entities before we come up with a conclusion, and they are given appropriate due process.”
FERC has five years after an event to move forward on cases, which means it would have to do so on any Uri investigations within the next three months — but the agency confirmed that will not be happening.
The storm has sparked many civil lawsuits, and utility customers around the country still are paying for its costs, which in some areas have been securitized over many years in rates to spread out price spikes.
FERC lacks any authority over ERCOT’s market and a state court has found the Public Utility Commission of Texas followed the law in keeping prices at the $9,000/MWh cap throughout the week of outages. (See Texas Supreme Court Rules for ERCOT, PUC During Uri.)
Other lawsuits have targeted natural gas market participants, but many of them involve the intrastate markets in Texas and Oklahoma, which are important even outside those states. In 2023, the 5th U.S. Circuit Court of Appeals ruled that FERC could not fine BP for trades on the Texas gas system during a 2008 event. (See FERC Approves Smaller Fine for BP After 5th Circuit Decision.)
One lawsuit filed by CirclesX Recovery against many major natural gas firms contends that widespread withholding of gas during Uri caused its price to spike from about $2/MMBtu to $208/MMBtu at Texas’ Waha hub and to as high as $1,200/MMBtu at unregulated nodes on the intrastate natural gas system. That suit is pending at the Texas 1st Court of Appeals.
