(Updated to include comment from Black Hills)
State utility regulators on Thursday agreed to consider whether they should make public documents detailing gas costs incurred by Kansas utilities during a 2021 winter storm that was marked by prolonged freezing temperatures and soaring gas prices.
The Kansas Corporation Commission originally sealed the documents, but the agency has received several requests seeking the records under the state’s open records law that could potentially be used in price-gouging lawsuits stemming from winter storm Uri.
Now, the agency plans an overall review to decide whether those records should be made public under state law and agreed to reconsider a lawyer’s request for the documents that he had already been denied.
“Due to the passage of time, the commission believes it is appropriate to reevaluate whether the confidential designations and related protections against disclosure should remain in place, be modified, or lifted entirely,” the commission said in an order.
“While the commission is generally disinclined to revisit confidentiality designations, the unique nature of the Uri Dockets causes the commission to open this general investigation,” the KCC order said.
“Because multiple utilities designated Winter Storm Uri natural gas invoices as confidential, the commission orders a general investigation opened to holistically consider the confidential status of certain documents related to costs incurred during Winter Storm Uri.”
The commission expects its general investigation to settle confidentiality issues for multiple documents, including those requested by Overland Park energy lawyer Jim Zakoura.
In August, Zakoura filed an open-records request seeking unredacted invoices related to the price of gas paid by Black Hills Energy during the storm.
Zakoura said the records requested will permit an examination of whether the payments made to Black Hills’ suppliers were consistent with Kansas law.
He noted the price of natural gas in Kansas was $2.54 cents per unit on Feb. 1, 2021, and on Feb. 17, 2021, the price of natural gas in Kansas was $622 per unit.
“We are hopeful the general investigation ordered by the KCC will result in the disclosure of information that will provide an opportunity for the claims of retail ratepayers to be heard by the courts,” Zakoura said in an email.
“To recover funds for Kansas consumers under the (consumer protection law), both the identity of the natural gas suppliers to Black Hills in February 2021, and the prices those suppliers charged need to be known,” Zakoura said.
The Kansas Corporation Commission first rejected Zakoura’s request and then agreed to reconsider. The documents that Zakoura requested will remain under seal until the matter is resolved.
KCC Chair Andrew French cautioned about making confidential records public, calling it a “very serious” question to be considered.
French said he was worried that the KCC’s regulatory abilities could be compromised if it was forced to disclose sensitive information.
“If we somehow could not protect information, it would become quite difficult for the commission to do its job,” French said.
“I think it’s also important to remember that winter storm Uri and the magnitude of these costs make this a very unique situation,” he said.
“There’s no idea that somehow (the open records law) is a just exception to maintaining the confidentiality of records,” he said.
French said he supported an overall review of record confidentiality that would involve multiple utilities that could provide more details about why the information should be sealed or why it could be in the public interest for it to be disclosed.
Black Hills opposed the disclosure that Zakoura requested, saying it would cause “substantial harm” to the public by interfering with the utility’s ability to acquire gas supplies and serve the public at a reasonable price.
Black Hills acquires gas supplies through a competitive bidding process, and it said the disclosure of the requested information could make potential suppliers reluctant to bid on the company’s supply.
Black Hills argued that although the documents sought included a term that required confidentiality for one year, the expiration of that year does not automatically require disclosure.
“Natural gas prices are a pass-through cost, and we will continue to act prudently in the best interest of our customers,” Black Hills spokesperson James Williams said in an email.
“We look forward to engaging actively in the proceeding established by the Kansas Corporation Commission to determine the appropriate balance of transparency and confidentiality to keep natural gas prices cost effective for our customers.”
Zakoura is already involved in two federal lawsuits, one against natural gas suppliers of Kansas Gas Service and the other against the suppliers of Kansas Municipal Gas Agency.
The lawsuits allege violations of the Kansas Consumer Protection Act.
Zakoura said Kansas Gas has disclosed the identity of suppliers and the total dollar amount paid, enough information to file a lawsuit under the Kansas Consumer Protection Act.
The Kansas Municipal Gas Agency also has provided complete and redacted invoices for the consumer protection litigation.
Among other things, Zakoura is seeking documents prepared by KCC staff substantiating that Black Hills could recover $87.9 million in additional natural gas costs from the retail sales of gas to customers on the Black Hills system.
Zakoura said a vast majority of that would be paid by residential customers living in Lawrence, Dodge City, Wichita and Liberal.
