“After careful and diligent review of the conduct during Winter Storm Uri, it is clear to me that several companies reaped billions of dollars at the expense of Oklahoma families and businesses,” Drummond said at a press conference Tuesday morning.
According to the Attorney General’s investigation, companies used a so-called short squeeze to create an unnecessary surge in natural gas prices from $3 per unit to $1200 per unit just as Oklahoma’s temperatures plummeted.
“The conduct in question is well outside the parameters and boundaries of ordinary capitalism,” Drummond said.
Now the Attorney General’s office hopes to recover that money in what he called “the most significant lawsuit in state history.” Drummond did not name specific parties the state plans to sue, but he said the blame lies with natural gas marketers.
These middlemen buy natural gas from producers and sell it to utilities. Drummond said he didn’t find any evidence of wrongdoing by utility companies like OG&E, Oklahoma Natural Gas or Public Service Company of Oklahoma during Uri.
“The utility companies of Oklahoma have a legal duty to provide natural gas, heating and electric,” Drummond said. “I do not find any evidence that they benefited untowardly. They simply bought at the market because they had a duty to buy at the market.”
Likewise, Drummond said his office’s investigation had found no wrongdoing at the Oklahoma Corporation Commission, which approved the utility rate increases in question.
Earlier this year, the Kansas Attorney General filed a lawsuit against an Australian-based natural gas marketer for $50 million gouged from Kansas ratepayers during Uri. Drummond confirmed that in Oklahoma’s legal actions, the marketers are also mostly out-of-state.
In the case of a future event like Winter Storm Uri, Drummond said his office can't prevent another short squeeze without interfering with the free market.
“Certainly natural gas marketers could do it again,” he said. “And I will sue them.”
Mike Hunter was the Oklahoma Attorney General when Winter Storm Uri struck in 2021. By the time he stepped down later that year, Hunter’s investigation had not resulted in legal action. Gov. Kevin Stitt appointed replacement AG John O’Connor, whoreceived harsh criticism from the state Supreme Court for taking no action to protect ratepayers during his year in office.
Earlier this year, the Oklahoma legislature and Stitt exempted the natural gas industry from state price gouging laws. But Drummond said that exemption doesn’t present a barrier to his plan, since the investigation looked beyond price gouging.
The state is seeking proposals from outside law firms that want to work on the case.
“We will take the time necessary to review the [request for proposals] so that we hire the very best firm with the best access to data and the availability of resources to partner with,” Drummond said.
He estimated it will take ten days to select a firm. After that, he couldn’t provide a timeline for the legal action. If the state is able to recover money, Drummond said it will likely make its way back to ratepayers indirectly via Oklahoma Corporation Commission bonds for utility companies.
