ONG's monthly increase

[TheTravellers]

Posting this just to make sure this gets the widest exposure possible and to hopefully prod people into commenting. Got a letter a week or so ago about ONG raising the monthly rate by $7.73 ($5.71 for low income) in the first year and less in subsequent years (they don't say how much it will go down or how many years it will last). This is to cover the insanely ridiculous prices suppliers (or whoever) charged for their natural gas during the Feb deep-freeze. If you want to comment, do the following:

In person - Courtroom 301, Jim Thorpe Office Building, 2101 N Lincoln Blvd
Zoom meeting on 11/22/2021, 8:30 AM - www.zoomgov.com/j/16108903595, meeting ID 161 0890 3595
Dial-in meeting 11/22/2021, 8:30 AM - 1-669-254-5252, meeting ID 161 0890 3595
Email - PUDenergy@occ.ok.gov with "Attention: Public Comment PUD 202100079" in the subject line
Written:
Oklahoma Corporation Commission
PO Box 52000
Oklahoma City, OK 73152

[WheelerD Guy]

Posting this just to make sure this gets the widest exposure possible and to hopefully prod people into commenting. Got a letter a week or so ago about ONG raising the monthly rate by $7.73 ($5.71 for low income) in the first year and less in subsequent years (they don't say how much it will go down or how many years it will last). This is to cover the insanely ridiculous prices producers charged for their natural gas during the Feb deep-freeze. If you want to comment, do the following:

In person - Courtroom 301, Jim Thorpe Office Building, 2101 N Lincoln Blvd
Zoom meeting on 11/22/2021, 8:30 AM - www.zoomgov.com/j/16108903595, meeting ID 161 0890 3595
Dial-in meeting 11/22/2021, 8:30 AM - 1-669-254-5252, meeting ID 161 0890 3595
Email - PUDenergy@occ.ok.gov with "Attention: Public Comment PUD 202100079" in the subject line
Written:
Oklahoma Corporation Commission
PO Box 52000
Oklahoma City, OK 73152

The natural gas market is not like Target or Walmart. Producers don't set the price; it is a free market with buyers and sellers of the commodity transacting voluntarily. Demand was off the charts for obvious reasons, and a lot of wellheads and gathering infrastructure froze off which impacted supply.

As for the base increase, this is definitely preferable to paying the cost of gas upfront. Would have been looking at bills north of $2-3K for the average household. I would imagine this increase will stay on the bills for decades, allowing ONG to pay off the cat bonds.

[Rover]

With other critical commodities in times of disaster there are predatory price controls. Doesn’t seem to be the case in O&G.

[TheTravellers]

With other critical commodities in times of disaster there are predatory price controls. Doesn’t seem to be the case in O&G.

[jerrywall]

We absolutely should investigate if there was gouging and such going on at the producer/supplier level for natural gas. That being said, I accept, as a ONG customer, that I'm going to absorb the fuel costs, since they merely serve as a transactional provider getting the natural gas to my home. But unless ONG has some culpability (such as insufficient reserves, etc) I don't expect them to absorb the cost of the fuel increase.

[Rover]

We absolutely should investigate if there was gouging and such going on at the producer/supplier level for natural gas. That being said, I accept, as a ONG customer, that I'm going to absorb the fuel costs, since they merely serve as a transactional provider getting the natural gas to my home. But unless ONG has some culpability (such as insufficient reserves, etc) I don't expect them to absorb the cost of the fuel increase.

Yes, ONG isn’t the bad guy unless they were complicit in decisions of the supplier to gouge. Most likely had no control.

[TheTravellers]

So why is the consumer getting punished instead of it working the other way around and going upstream to punish the suppliers (who obviously price-gouged)? Oh wait, the consumer has no power or pull, business as usual....

[PhiAlpha]

So why is the consumer getting punished instead of it working the other way around and going upstream to punish the suppliers (who obviously price-gouged)? Oh wait, the consumer has no power or pull, business as usual....

No one price gouged. It’s a commodity and is priced by the market. Supply decreased massively due to wells and flow line/gathering systems in OK and TX not being set up to handle such cold temperatures for a 2-3 week time period. Lines froze causing supply to drop at a time in which demand rapidly spiked (almost historically spiked) and the market reacted. It sucks but that’s how commodity markets work. Fortunately the customers were mostly insulated from that in OK. For those in Texas that elected to take gas at the market price (good idea most of the time but you saw the risk during winter)…it really sucked.

[TheTravellers]

No one price gouged. It’s a commodity and is priced by the market.

So that's just the way it works? Sad and ridiculous. What about Rover's comment - "With other critical commodities in times of disaster there are predatory price controls. Doesn’t seem to be the case in O&G."? Why aren't there predatory price controls? Is the consumer just stuck with whatever anybody/everybody decides to charge, with no oversight or control?

[PhiAlpha]

So that's just the way it works? Sad and ridiculous. What about Rover's comment - "With other critical commodities in times of disaster there are predatory price controls. Doesn’t seem to be the case in O&G."? Why aren't there predatory price controls? Is the consumer just stuck with whatever anybody/everybody decides to charge, with no oversight or control?

Quit using the term “predatory.” It’s an inflammatory term that assumes something nefarious was going on and there absolutely wasn’t. In fact I have several friends that work for small operators who had everyone from engineers to landmen and office aids out in negative temperatures in a snow storm firing up blow torches and beating on lines with sledge hammers trying to get their wells back online so they could meet the utility demand. Things get more expensive when the demand increases…it sucks but that’s the way it is. There are some price controls on natural gas but that’s honestly beyond my level of expertise.

Also why the hell should producers/suppliers be punished? They are providing a commodity that they produce and encountered basically a once in a century event. The Force Majeure clauses in their midstream contracts cover supply interruptions that are out of their control due to acts of god like that. Natural gas prices have been so abysmally low since 2009 that it’s been very difficult to even break even producing it except for in certain areas. Consequently utility prices have been historically low for the last decade…complaining about a small increase after such low prices for so long is a bit comical. How easy we forget how expensive natural gas and electricity was prior to that time.

[PhiAlpha]

Between financing/capital issues and increased regulations coming out of DC (ESG regulations, attempted repeal of tax deductions, etc) high prices are going to be a thing for awhile for both oil and natural gas. It will filter down to the consumer.

“Sad and Ridiculous” is a funny way to describe it that assumes you as the consumer are guaranteed cheap energy or that it’s some right you are owed or something. While it would be great to say everyone deserves cheap energy…that’s not a right that the consumer is owed by anyone and we will all end up paying whatever the supply/demand market requires. Natural Gas, Coal and Nuclear energy are the cheapest sources around and the government is currently trying to eliminate all three of them. You can see what happened in the short term when natural gas supply was constrained…imagine what happens when all of those are reduced or eliminated. The prices we have now are only going to go up for the foreseeable future.

[TheTravellers]

Between financing/capital issues and increased regulations coming out of DC (ESG regulations, attempted repeal of tax deductions, etc) high prices are going to be a thing for awhile for both oil and natural gas. It will filter down to the consumer. While it would be great to say everyone deserves cheap energy…that’s not a right that the consumer is owed by anyone and we will all end up paying whatever the supply/demand market requires.

Nobody ever said anybody deserved cheap energy, just that ONG shouldn't screw every single customer out of hundreds or thousands of extra dollars for who knows how long because there is no framework in place for a situation like what happened in Feb, so the upstream companies just charge whatever they feel like and all the insane charges just go downstream until the customers pay? So what's going to happen during the next deep freeze (and there *will* be one) - we get screwed out of another $10/month for another who knows how many years? And this just keeps going on? Isn't this exact situation what the OCC and other regulating bodies are for or do they just rubber-stamp whatever the utility company wants? Also, the "predatory" part was Rover's initially, I just echoed his comment.

[PhiAlpha]

And you say you don’t think everyone deserves cheap energy yet in the same sentence say that ONG shouldn’t screw the consumer for charging a little more for their already very cheap natural gas. How do you reconcile those two statements?

Also, how is ONG screwing the consumer by adjusting the price to fit the market vs just eating it themselves? You realize that over the last 6 months, natural gas prices on the whole have been double/triple what they were from 2009-2020, right? It’s been a consistent increase from sub $2.00/mmbtu to $5-$6/mmbtu. I would guess that and forecasted higher prices next year is also factoring into their decision to increase prices.

[TheTravellers]

And you say you don’t think everyone deserves cheap energy yet in the same sentence say that ONG shouldn’t screw the consumer for charging a little more for their already very cheap natural gas. How do you reconcile those two statements?

Also, how is ONG screwing the consumer by adjusting the price to fit the market vs just eating it themselves? You realize that over the last 6 months, natural gas prices on the whole have been double/triple what they were from 2009-2020, right? It’s been a consistent increase from sub $2.00/mmbtu to $5-$6/mmbtu. I would guess that and forecasted higher prices next year is also factoring into their decision to increase prices.

Let me be clear - I don't think everybody *deserves* "cheap" energy, standard price fluctuations and increases are normal and fine (I don't bitch when gasoline goes up or down), but this seems like it would be a lot more than just a little increase for a while, it's going to end up being most likely a lot of money spread over a whole bunch of years. And NG prices going up over the years is just like gasoline, that's fine, incremental adjustments are normal. This would literally increase my bill during summer months by 20% or so (less of a percentage in winter, still same dollar amount) every month for who knows how many months. That's not fine. But it fits with the way America's been going the past few decades - corporations rule, people have no power (pun not intended).

And thank you for the detailed explanation, still a ridiculous situation...

[PhiAlpha]

Let me be clear - I don't think everybody *deserves* "cheap" energy, standard price fluctuations and increases are normal and fine (I don't bitch when gasoline goes up or down), but this seems like it would be a lot more than just a little increase for a while, it's going to end up being most likely a lot of money spread over a whole bunch of years. And NG prices going up over the years is just like gasoline, that's fine, incremental adjustments are normal. This would literally increase my bill during summer months by 20% or so (less of a percentage in winter, still same dollar amount) every month for who knows how many months. That's not fine. But it fits with the way America's been going the past few decades - corporations rule, people have no power (pun not intended).

And thank you for the detailed explanation, still a ridiculous situation...

No problem! I wish I knew more about the marketing/utility side so I could give better (or at least more clear) insight but outside of dealing lightly with the marketing side and taking some classes on it at OU, I’m definitely not well versed. Maybe someone else on the board that works on the midstream or downstream/utility side could chime in with more detail. And sorry if my tone was a bit harsh…with all the “screw oil and gas” rhetoric that’s out there and that I deal with personally…sometimes it just comes out that way. Need to work on that.

[PhiAlpha]

I definitely think we’re about to see a massive spike in both natural gas and oil prices due to the lack of capital being invested, the exhaustion of tier 1 acreage, the amount of companies that went under, the amount of people who left the industry, and the fact that so much production was shut-in over the last two years. Add to that the fact that most big time offshore/international projects that generally take 5 years (from concept to production) to produce oil were shelved due to low commodity prices starting in 2015. If much of the ESG stuff the Biden administration is pushing goes into effect and if they repeal tax deductions for intangible drilling costs and others that incentivize new exploration/development…that’s only going to add to the supply issues. Eventually prices will reach the point that it incentivizes exploration again but it will likely take awhile for the increase in production to make up for it.

[jn1780]

While I don't agree with charging 1500 to disconnect from ONG. Usually someone who can make the investment to live off the grid can afford a 1500 disconnect fee. Also, someone who has a gas stove probably has a gas furnace also so its unlikely there going to switch unless their making the investment to completely switch over. That involves having an electrician install 240 volt outlet for the range and upgraded power requirements for an electric furnace.

So if you are not making the investment to go all solar, all you did was replaced two of your appliances with two less efficient forms of heating and increased your electric bill. So I don't think 1500 is going to make a big difference in the long run.

[Jersey Boss]

I have a lot of questions
What are the salaries of the CEO/COO and what did they do during the crises?
Still paying dividends and how much?
Monies billed and collected from those customers who were charged "minimum biil" even though they didn't use that much gas. Rate payers need ro awe an accounting of these funds.
Disconnect fee from a public utility for 1400? Why and what world does ONG live in?
How much does this monoply spend
on lovbying and advertising?

[TheTravellers]

I have a lot of questions
What are the salaries of the CEO/COO and what did they do during the crises?
Still paying dividends and how much?
Monies billed and collected from those customers who were charged "minimum biil" even though they didn't use that much gas. Rate payers need ro awe an accounting of these funds.
Disconnect fee from a public utility for 1400? Why and what world does ONG live in?
How much does this monoply spend
on lovbying and advertising?

All good questions.

Salaries are probably way beyond what they deserve, along with all the stocks, etc., bet they sat around waiting for updates and their subordinates to do things.

Bet they're still paying dividends and will forever, don't know how much, though.

It's all just a fiasco, from the very sources that charged literally astronomical rates to ONG's plan, which has never been attempted before.

https://www.oklahoman.com/story/busi...ty/8795571002/

[TheTravellers]

Supreme Court should stop securitization racket

"The issue with all of this is that, to date, nobody has determined who got paid the astronomical spot market prices. Oklahoma’s regulated utilities, OG&E, ONG and PSO are subsidiaries of OGE Energy Corp, ONE Gas and American Electric Power, respectively. Some of these parent companies own interests in power generation, midstream operations, storage and other gas industry interests. Somebody made this money and we need to know who.

While the utilities are prohibited by law from making a profit on fuel charges, their parent or sister companies are under no such obligation. We still do not know who exactly got paid, whether there was corporate self-dealing or other troubling arrangements.

Why should consumers pay for any of that? Lawyers will make convoluted legal arguments about contract law, energy markets and the regulatory environment, blaming everyone from state regulators and the federal government to Mother Nature, but any person with an ounce of common sense can smell the stench of corruption a mile away.

Without knowing who got paid, how much they were paid and for what quantity of gas, it is not prudent or reasonable to approve this process and let the securitization ship set sail. The Supreme Court is the last line of defense in protecting the public interest and demanding real transparency accountability for what happened in February 2021.

While these systems are complex, all available information leads back to a basic question of fairness. The Oklahoma Supreme Court has an opportunity to intervene and make everyone involved come up with a better solution. It should take that opportunity and deny the securitization order."

[bombermwc]

I've got two huge problems with the way this went.
1 - the price that was being charged at the time was price gauging. You can't supply/demand away that bs. The sellers should be in a lawsuit right now for holding the country hostage that week.
2 - what happens when this happens again? What happens if this becomes an annual event or even every 5 years? Are we going to keep paying that mess and keep adding it on the bills because ONG didn't plan better?

[onthestrip]

I've got two huge problems with the way this went.
1 - the price that was being charged at the time was price gauging. You can't supply/demand away that bs. The sellers should be in a lawsuit right now for holding the country hostage that week.
2 - what happens when this happens again? What happens if this becomes an annual event or even every 5 years? Are we going to keep paying that mess and keep adding it on the bills because ONG didn't plan better?

Exactly. Why is there no price gouging laws on this, when there are for other goods and services? We dont even get to know who profited from these crazy prices.
Secondly, what has OGE/ONG done to prevent this from happening again? As I see it, it looks like they got out unscathed and can just rely on consumers to foot the bill for any future winter blasts.

[TheTravellers]

Exactly. Why is there no price gouging laws on this, when there are for other goods and services? We dont even get to know who profited from these crazy prices.
Secondly, what has OGE/ONG done to prevent this from happening again? As I see it, it looks like they got out unscathed and can just rely on consumers to foot the bill for any future winter blasts.

Extremely bad precedents were set with the ONG and OG&E securitization procedures, customers are just ****ed from here on out with the OCC being pretty much in bed with the utilities.

[gopokes88]

I've got two huge problems with the way this went.
1 - the price that was being charged at the time was price gauging. You can't supply/demand away that bs. The sellers should be in a lawsuit right now for holding the country hostage that week.
2 - what happens when this happens again? What happens if this becomes an annual event or even every 5 years? Are we going to keep paying that mess and keep adding it on the bills because ONG didn't plan better?

Argue this point all you want but it bumps against reality.

I have a friend who made millions off that freeze. Wanna know how? He and his entire company went outside for 3 straight days in that weather keeping his field's pipes warm so the gas would keep flowing. I had several others go to similar measures to try and keep their gas flowing.

Had the don't price gouge laws been effect and the gas price was capped? He would have let them freeze, and the state would have almost assuredly ran out of gas for a short period of time. People wouldn't have power or heat without a fireplace.

He had nothing to do with midstream sending spot price to the moon to secure supplies, but when they did moon, he went to work to keep supply flowing.

[TheTravellers]

...
I have a friend who made millions off that freeze. Wanna know how? He and his entire company went outside for 3 straight days in that weather keeping his field's pipes warm so the gas would keep flowing. I had several others go to similar measures to try and keep their gas flowing....

Why did he even have to do this? Why wasn't the infrastructure protected against this kind of situation? Did his company just decide to take the risk and hope a really deep freeze never happened, but if it did, he was assured of making ridiculous amounts of money?

I've spent days in a row working and neither me nor my company made millions during that period, we just kept the company going, it was part of our job. No, it wasn't outside in subzero weather, but companies should have the foresight so that people *don't* have to work outside in subzero weather for days.