Residents of a small city in southeast Kansas may continue a lawsuit that claims energy utility BP gouged them with hefty price increases for natural gas during freezing weather last year, a judge has ruled.
A Crawford County judge on Feb. 9 dismissed a motion by the British multinational oil and gas company to end the lawsuit and said residents of the town have the right to sue BP, formerly known as British Petroleum, The Wichita Eagle reported.
Mulberry is contesting about $51,000 of a natural gas bill it received last February, a hefty amount for the Crawford County town of less than 500 residents.
BP, which on Feb. 9 announced a 2021 profit of $12.8 billion, did not respond to requests for comment, The Eagle reported.
The decision came a day after the Kansas Corporation Commission approved Kansas Gas Service’s decision to increase prices for its customers for the next five to 10 years to pay $366 million of winter storm costs from the freeze.
Mulberry residents buy their gas through their city utility and not Kansas Gas Service, so Wednesday’s ruling could provide a way for customers of any utility to sue for relief under the Kansas Consumer Protection Act, said James Zakoura, an attorney for Mulberry and its municipal gas consumers.
The city government and four named residents allege in the lawsuit that BP violated the anti-profiteering section of the act that limits price increases on consumer goods to 25% during emergencies.
Mulberry’s gas cost on Feb. 9, 2021, was $2.98 per million British Thermal Units. The price rose to $329.60 per million BTU from Feb. 13 to Feb. 16, when the city stopped buying gas. On Feb. 17, the price hit $622.79.
BP officials argued that the four individuals should be dismissed from the lawsuit because it sold gas to the city, not residents. The residents countered that the gas went through the city but they are they the actual consumers.
Judge Lori Bolton Fleming, the chief judge for Crawford, Cherokee and Labette counties, agreed saying dismissing the individual residents’ claims would create a situation in which any supplier who uses a distributor rather than having contracts with individual consumers would be able to avoid liability under the state’s Consumer Protection Act.
“Such an interpretation is simply not consistent with the stated policy of the KCPA,” Fleming said.
The city government was dismissed as a plaintiff in the lawsuit but could be added back under the Uniform Commercial Code, which bans “unconscionable” business practices, said attorney Lee Smithyman.
He said allowing the lawsuit to proceed gives the plaintiffs access to documents that could explain why natural gas prices went up so much last year.
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