Texas pipeline company threatens to cut fuel to major power generator

Editor’s note: Read the latest developments in this story here.

As freezing weather swept through Texas late this week, subsidiaries of a major pipeline company threatened to cut off natural gas to the state’s largest power generator – potentially impacting the power supply to hundreds of thousands of customers – due to a financial dispute stemming from the last February’s deadly winter storm.

Luminant, a subsidiary of Vistra Corp., on Wednesday asked the Texas Railroad Commission, which regulates the state’s oil and gas industry, to stop Energy Transfer LP from shutting off fuel to five Vistra power plants, which produce enough electricity to power 400,000 Texas homes, businesses and businesses. essential infrastructure such as hospitals and schools.

Railroad Commission officials did not respond to questions about whether the agency will act.

Companies under Energy Transfer, the pipeline company, told Vistra that gas would stop flowing to five Vistra power plants on Monday unless Vistara pays Energy Transfer $21.6 million, according to the filing.

The “threat to terminate service in mid-winter is unlawful and totally irresponsible and should be prohibited by this Commission,” Vistra said in the complaint to the Railroad Commission.

Vistra called the move by billionaire Kelcy Warren-led Energy Transfer a “form of commercial extortion”.

Board of Railroad Chairman Wayne Christian expressed his concern Thursday on Twitter: “I’m very mindful of this. @EnergyTransfer and @VistraCorp need to come together to address this issue so no Texan loses out. gas or electric service in cold weather. Do what’s right for Texans.”

During last year’s winter storm – which caused the near total collapse of the state’s power grid, left millions of people without power for days and caused hundreds of deaths – Vistra spent about $1 $.5 billion for natural gas, “twice its projected cost of natural gas to power its entire Texas fleet for a full year,” the filing said. Vistra paid Energy Transfer more than $600 million during the storm, “which represents more than 96% of all the amounts invoiced by [Energy Transfer].”

The cost of natural gas soared during the storm, when a combination of freezing temperatures across the state and soaring demand shut down natural gas facilities and power plants, which depend on each other to maintain electricity.

While many businesses lost money during the storm, Energy Transfer earned $2.4 billion. Energy Transfer did not immediately respond to a request for comment.