U.S. trade groups urge Biden to cap natural gas prices after Texas freeze last week

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(Reuters) - Trade groups representing U.S. public power and natural gas companies urged President Joe Biden to declare a gas emergency for last week’s extreme weather and authorize the secretary of energy to cap the price of gas.

In a Feb. 19 letter to Biden, the American Public Power Association (APPA) and the American Public Gas Association (APGA) said the recent cold weather in the Midwest and Texas boosted demand for electricity at the same time power generation was constrained due to freezing gas wells and pipelines.

That forced utilities and other energy suppliers to pay billions of dollars to buy gas and power for their customers. In addition to heating homes and businesses, gas also powers much of the generation in Texas and other states affected by the freeze.

“While we await relief from the Administration for this financial burden as well as the results of the federal investigation, we continue to work with our members at the state and local levels to find solutions to the high prices that gas consumers may be forced to pay in the coming months,” APGA said in a statement.

Gas prices, which usually trade around $3 per million British thermal units (mmBtu), rocketed to over $300 per mmBtu at some hubs, while power prices, which usually trade around $25 per megawatt hour in Texas, soared to over $10,000 at times.

One public-owned power plant spent $78 million for four days of gas supply, the groups said, noting the fuel for that plant cost only $18 million for all of 2020.

On Thursday, Dave Schryver, APGA CEO and president will be testifying before the Illinois Commerce Commission on the gas price fluctuations and their impact on public gas utilities and their customers.

Officials at APPA and the U.S. Department of Energy were not immediately available for comment.

Reporting by Scott DiSavino in New York, Timothy Gardner in Washington, Eileen Soreng in Bengaluru Editing by Lisa Shumaker and Christopher Cushing