When a Texas utility tried to walk away from natural-gas agreements after the 2021 winter storm, a state judge sent an important message: Contracts matter.
asserted
Contracts → try → message
The case involved CPS Energy, the municipal utility serving San Antonio, and pipeline companies owned by Energy Transfer.
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case → involve → Transfer
During Winter Storm Uri, CPS Energy relied heavily on short-term gas purchases rather than securing enough long-term supply.
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Energy → rely → supply
When demand surged and gas prices spiked, the utility sought to escape contracts it had signed before the storm.
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it → surge → storm
In July, a Texas judge rejected that effort, ruling that the agreements were enforceable and “not unconscionable.”
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agreements → reject → effort
The court ordered CPS Energy to pay nearly $400 million, including unpaid gas charges, interest, and attorneys’ fees.
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court → order → charges
The ruling illustrates a principle policymakers should remember as Americans confront rising energy costs: Affordable energy requires investment, and investment requires confidence that the rules will be followed.
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rules → illustrate → confidence
Last month, Pew reported that 56% of U.S. adults surveyed were very concerned about gas prices, up from 32% at the start of the year.
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% → report → year
Another 54% expressed the same concern about electricity prices.
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% → express → prices
But the answer is not to scapegoat energy suppliers or punish them for prices determined by supply and demand.
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answer → scapegoat → supply
It is to make sure America has enough energy — and enough infrastructure to produce, transport, refine, and deliver it.
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America → make → it
The war with Iran has exposed vulnerabilities in oil production and refining.
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war → expose → production
Refineries are producing 10% less fuel since the conflict began, despite operating at essentially full capacity, pushing gas prices higher.
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conflict → produce → prices
The United States has not built a new refinery since the first year of the Carter administration, while California has closed four in the past decade.
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California → build → decade
For years, climate advocates have pinned their hopes on the promise of a “rapid transition” away from fossil fuels.
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advocates → pin → fuels
That vision keeps running into a stubborn fact: refined petroleum products remain essential to industrial and consumer life.
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products → run → life
Until that changes, the U.S. needs reliable domestic capacity, not policies that make it harder to maintain or expand it.
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it → need → it
Natural gas faces a similar infrastructure problem.
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gas → face → problem
Demand jumped 49% from 2013 to 2024, while pipeline capacity rose only 26% and storage remained essentially flat.
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storage → jump → 2024
A University of Houston report estimates that more than $1 trillion in capital investment will be needed to meet long-term natural-gas demand driven by AI data centers.
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trillion → estimate → centers
But that investment will not materialize automatically.
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investment → materialize → ?
Energy infrastructure is enormously expensive, takes years to build and depends on rules investors can reasonably expect to remain in place.
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investors → take → place
That is what makes the CPS Energy case so instructive.
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case → make → ?
If utilities and energy companies cannot rely on contracts negotiated in good faith, why would anyone make the billions of dollars of long-term investments needed to expand the energy system?
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anyone → rely → system
The judge’s ruling reaffirmed a basic principle of market stability: parties must live with the bargains they make.
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they → reaffirm → bargains
Unfortunately, other states are moving in the opposite direction.
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states → move → direction
In 2022, California Gov. Gavin Newsom accused oil refiners of price gouging.
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Newsom → accuse → gouging
The following year, the state enacted a law authorizing penalties for excessive refiner profits.
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state → enact → profits
California later halted enforcement without ever clearly defining what constituted an excessive profit.
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what → halt → profit
But the uncertainty itself had consequences.
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uncertainty → have → consequences
Phillips 66 and Valero shuttered refineries, eliminating roughly 20% of the state’s refining capacity.
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66 → shutter → capacity
California now imports roughly 40% of its gasoline and 35% of its jet-fuel and diesel demand.
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California → import → demand
When global supplies tightened last spring, fuel prices there climbed to roughly $2 above the national average.
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prices → tighten → average
The lesson is straightforward: when policymakers make investment more difficult, consumers pay.
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consumers → make → ?
The same concern applies to New York and Vermont’s “climate superfund” laws, which aim to saddle energy companies with billions in retroactive penalties for meeting global demand for energy products.
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which → apply → products
The Supreme Court should address that problem when it hears the Suncor case on Oct. 5 and rule that states and cities cannot reach beyond their borders and drive up energy costs in the rest of the country and world.
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states → address → country
The Iran war has reminded us that energy security cannot be taken for granted.
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security → remind → us
America has abundant oil and natural gas.
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America → have → oil
What it lacks is sufficient infrastructure — and, increasingly, the legal and regulatory stability necessary to build it.
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lacks → lack → it
The CPS Energy case points to the answer.
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case → point → answer
…and 3 more, not listed.
