Five Years Later, Oklahoma’s Winter Storm Natural Gas Fight Heads Toward Trial

The mystery around why Oklahoma utility customers paid so much more for natural gas during a massive winter storm in 2021 is one step closer to being solved. 

Two recent legal developments, one federal and one state, put a protracted lawsuit back on track after years of wrangling over jurisdiction, document production and how natural gas is traded and transported during an emergency. 

Winter Storm Uri blanketed the midsection of the country in February 2021. Extremely cold temperatures spiked demand for natural gas for both electricity generation and heating. Natural gas prices at regional trading hubs used by Oklahoma utilities and other customers ballooned to more than $1,200 per thousand cubic feet, up from less than $3 in the weeks before the storm. 

Customers of Oklahoma’s largest regulated utilities are paying back billions in fuel costs incurred during the storm, plus interest on bonds sold to cover those costs. Most residential customers are paying between $5 and $15 per month in extra bill charges for the next two decades. 

Last week, regulators at the Federal Energy Regulatory Commission declined to weigh in on whether the natural gas sold for electricity and heating during the storm stayed within Oklahoma or crossed state lines. Then a district judge in Osage County on Monday ruled in favor of Oklahoma Attorney General Gentner Drummond, who alleged NextEra Energy Marketing LLC and others engaged in market manipulation and price gouging. 

Although NextEra is likely to appeal, Osage County District Judge Stuart Tate said he’d seen enough evidence to rule the company violated the state’s emergency price and consumer protection laws. He approved the state’s motion for partial summary judgment and said a trial would determine how much NextEra should pay in damages. 

Any judgments or settlements from the winter storm natural gas lawsuits would go toward the amounts outstanding in the ratepayer-backed storm bonds, minus outside attorney fees and expenses. 

NextEra representatives did not respond to a request for comment. 

Shortly after taking office in 2023, Drummond said he wanted to investigate the massive run-up in Oklahoma natural gas prices during Winter Storm Uri. He hired outside attorneys on a contingency basis, which means they only get paid if the state wins or settles. 

Drummond filed the first lawsuits in Osage County in April 2024 against a pair of pipeline companies on behalf of the state’s Grand River Dam Authority. Another lawsuit against 17 natural gas marketers followed in January 2025. 

Tate, the Osage County judge, consolidated the lawsuits in March. His latest scheduling order expects a trial date to be set after a pre-trial conference in October 2027. 

In written statements, Drummond said the FERC and NextEra rulings meant the winter storm lawsuits would remain in state courts. 

“This ruling marks an important victory in our fight to hold NextEra accountable for the staggering prices Oklahomans were forced to pay during Winter Storm Uri,” Drummond said Tuesday. “My office will continue fighting to ensure NextEra answers for the harm it caused and to recover every dollar possible for the Oklahomans exploited during the emergency.”

Issues Remain For Next Attorney General 

The case schedule means whatever happens in the winter storm natural gas lawsuits will likely fall to the next attorney general. Drummond, a Republican who ran for governor, will be succeeded by either Republican Jon Echols, a former House Majority Floor Leader, or Democrat Nick Coffey, a former federal prosecutor. 

In an interview, Echols said he was suspicious of the high prices during the 2021 winter storm while he was in the Legislature and called for an investigation. He said he was glad the case was now moving forward in Osage County. 

“This case is critical to protect ratepayers,” Echols said. “The decision that was just handed down opened this up for either a trial or large settlement that when I’m elected attorney general, we will put directly into ratepayers’ pockets. We will aggressively pursue this case to make ratepayers whole.” 

Coffey said he expects an appeal, which would put the case squarely in the hands of the next attorney general. He said he would bring his prosecutorial experience to the case to hold the companies responsible. 

Coffey said he would have preferred the Oklahoma Corporation Commission to investigate the high natural gas prices to utility customers first. Other than former Commissioner Bob Anthony, the three-person commission decided it lacked jurisdiction and asked the attorney general to investigate instead. 

NextEra Top Natural Gas Seller During Storm

Although multiple defendants are named in the consolidated case, NextEra has been the most active company in challenging each step of the process. With more than $430 million in sales, the company was the top seller of natural gas to Oklahoma utilities during the storm.  

Oklahoma Natural Gas, along with sister natural gas utilities in Texas and Kansas, spent more than $1.9 billion on natural gas during the February 2021 storm. The utility’s 900,000 Oklahoma customers were on the hook for almost $1.3 billion of those natural gas charges. Oklahoma’s largest utilities spent more on natural gas during the storm than they did in the entire previous year. 

Legal filings by the attorney general’s office alleged NextEra took advantage of a state emergency declaration and a contract provision called force majeure to artificially inflate natural gas prices based on sales at a trading hub in Oklahoma. 

“This case is critical to protect ratepayers. We will aggressively pursue this case to make ratepayers whole.”Jon Echols, Republican candidate for attorney general

Attorneys for the state said NextEra sold natural gas to ONG at prices approaching $1,193 per thousand cubic feet. Daily trading activity at the Oklahoma hub fell to 37 trades on Feb. 18, 2021, from 331 trades on Feb. 10, 2021. The lack of trading activity meant just a few trades had an outsized influence on the index price, the attorneys said. 

“The state contends this pattern reflects a discretionary allocation of supply concealed behind curtailment and force-majeure representations, rather than an inability to obtain or deliver gas,” the plaintiffs said in a June 16 filing. 

NextEra’s attorneys argued that all participants in the natural gas market were responding to supply constraints from the extreme freeze and that spot prices reflected simple supply and demand. They said most of the company’s natural gas sales came from pre-storm contracts tied to public index prices. 

Separately from the attorney general’s lawsuits, ONG sued NextEra in April 2021 over natural gas sales during the winter storm. The utility disputed $6.9 million in invoiced charges for natural gas used during the storm, a drop in the bucket compared to its total outlay. The companies settled in early 2022. ONG said the amount was confidential. 

More than a year after being named in Drummond’s natural gas marketing lawsuit, NextEra asked FERC to assume jurisdiction over natural gas sold during the winter storm. The commission regulates interstate gas sales, but leaves intrastate gas sales to the states. 

NextEra said the Oklahoma trading hub for natural gas included gas from other states and it was impossible to separate the sources when it came to the natural gas molecules. NextEra said FERC has jurisdiction over the wholesale natural gas market and it sold to ONG on a wholesale basis, not at the retail level where state price gouging laws could apply. 

FERC declined to get involved in the Oklahoma cases, saying the technicalities were better left to the district court in Osage County. 

“We find that the parties’ dispute about whether state jurisdictional sales violated state law can be resolved via the ongoing proceedings in Oklahoma state court,” FERC said in its Sept. 23 order. “To the extent any sales in the state litigation are not state jurisdictional sales, the types of preemption arguments NextEra presents are routinely presented to and resolved by courts.” 

Previous AG Investigations Started and Stopped

Drummond is the third Oklahoma attorney general since Winter Storm Uri to address the fallout from natural gas spikes for Oklahoma utility customers. 

Former Attorney General Mike Hunter started an investigation shortly after the storm. His office issued civil investigative demands for records from energy companies across the supply chain. But that investigation languished after he resigned in summer 2021. His successor, John O’Connor, whom Gov. Kevin Stitt appointed, declined to pursue the investigation. 

The state’s top energy association, the Petroleum Alliance of Oklahoma, sent a letter to O’Connor saying natural gas sales were a type of petroleum product under state law and therefore exempt under the state’s Emergency Price Stabilization Act. 

O’Connor replied that the law wasn’t specific enough, but still dropped plans for a lawsuit. In 2023, lawmakers passed House Bill 2561, which explicitly exempted natural gas under the Emergency Price Stabilization Act. 

In announcing plans to investigate natural gas sales in 2023, Drummond made it clear he didn’t fault Oklahoma utilities or state-based oil and gas companies for the increase in natural gas prices during the storm. 

“Here in Oklahoma, families and businesses suffered greatly and they are still suffering, paying the prices in the form of higher utility rates,” Drummond said in July 2023. “It’s important to understand our oil and gas industry is not to blame. It is equally important to understand that our utility companies are not to blame. But make no mistake: There are indeed guilty parties who are to blame.” 

Paul Monies has been a reporter with Oklahoma Watch since 2017 and covers state agencies and public health. Contact him at (571) 319-3289 or pmonies@oklahomawatch.org. Follow him on Twitter @pmonies. 

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