AG Derek Schmidt seeks to expand investigation into February natural gas price spike

TOPEKA – (September 13, 2021) – Kansas Attorney General Derek Schmidt is seeking expert assistance for his ongoing investigation into the sharp price increases of natural gas during the period of extreme cold temperatures in February.

Schmidt has submitted a request for proposals seeking to retain a law firm with expertise in the natural gas marketplace to assist with the investigation and any potential civil litigation enforcing Kansas anti-profiteering law. The Legislative Budget Committee recently reviewed the RFP without recommending any changes. The RFP is now posted publicly with the state procurement office and interested firms are invited to bid until October 28, 2021.

“State law prohibits ‘unjustified’ price increases for ‘necessary’ goods and services during a declared state of disaster emergency, and on their face these increases appear to violate Kansas law,” Schmidt said. “Our investigation has reached a point where additional resources and expertise in the complicated natural gas marketplace are required.”

Under state law, the attorney general’s authority includes enforcing limits on profiteering during a declared disaster and on the filing of false claims for payment from government entities. After natural gas prices spiked during the declared winter weather disaster, Schmidt’s office immediately opened an investigation on February 19 to determine whether there is evidence that the unprecedented price increases violated state law. More than a month later, on March 30, Gov. Laura Kelly then requested the attorney general “conduct an immediate and thorough investigation into the legality of price increases imposed during the February winter weather event by natural gas supplier or third-party marketers outside the [Kansas Corporation Commission’s] jurisdiction.” Schmidt’s investigation is ongoing.

The RFP asks legal contractors to review appropriate data and provide the Office of the Attorney General with an assessment of the potential for successful litigation. If authorized after such review, the contractors will provide legal counsel for the state to recover losses.

Kansas law establishes a multi-step procedure to approve the hiring of specialized legal counsel in a situation such as this, so the timeline for obtaining assistance may be lengthy. The proposed RFP had to be reviewed by the Legislative Budget Committee, and after a winning bidder is selected any proposed contract also must be reviewed by the LBC. The RFP is now open and can be found at https://bit.ly/3E8Qtik, then scrolling down to the link for “natural gas recovery litigation attorney.”

Noting the separate KCC proceeding, Schmidt said his office will continue working to ensure the state’s overall response remains coordinated and the interests of consumers, ratepayers and taxpayers are fully represented at every stage of the various proceedings and investigations.