Energy Transfer, a major pipeline firm that threatened to terminate natural gas service to five Vistra Corp. gas-fired power plants in Texas next week as part of a $21.3 million penalty payment standoff, has relaxed its ultimatum, though the underlying dispute continues.

In a letter filed with the Texas Railroad Commission late on Jan. 20, the midstream and intrastate transportation and storage giant said it reached an agreement with Vistra subsidiaries Luminant Energy Co. and Dynegy Marketing to “temporarily maintain natural gas service” through March 31, 2022, not Jan. 23, as it had threatened

However, Energy Transfer subsidiaries Energy Transfer Fuel (ETF) and Oasis Pipeline will continue to sell natural gas to the Vistra subsidiaries under terms and conditions that have been place since Dec. 1, 2021. It will mean that Luminant will keep buying natural gas for power generation at daily spot prices.

Luminant in a complaint filed with the Railroad Commission—Texas’s oil and gas regulator—on Jan. 19 said it has bought natural gas from Energy Transfer at a daily spot price (of about $15/MMBtu for day-ahead gas, $25/MMBtu for no-notice gas, and a buy-back price of $3/MMBtu) since December. Energy Transfer’s subsidiaries “have conditioned further service on payment of the illegal OFO penalties and have refused to negotiate any short or long-term natural gas transportation or sales arrangement with Luminant unless and until they pay the illegal and discriminatory penalty,” the complaint alleges.

However, Energy Transfer on Thursday said that based on the agreement, Luminant and Energy Transfer will ask the Railroad Commission to “abate Luminant’s request for interim relief” until March 31. The companies also agreed to give Energy Transfer until March 31 to respond to Vistra’s Jan. 19 complaint.

In its complaint, Luminant and Dynegy Marketing and Trade urged the Railroad Commission to grant “emergency relief,” preventing ETF and Oasis Pipeline from terminating or suspending natural gas service to several Vistra gas-fired power plants. These include the 1.6-GW Midlothian, 630-MW Graham, 390-MW Morgan Creek, 685-MW Stryker Creek, and 244-MW Trinidad power generation facilities, which are served by the ETF system, and the 989-MW Hays facility, which is served by the Oasis system.

Vistra said that while certain facilities are served by two or more pipelines, the Graham and Trinidad facilities are served only by the ETF system. “The Hays, Morgan Creek, and Stryker Creek facilities have access to other pipelines. However, due to constraints, these facilities may not be able to operate at maximum capacity if ETF or Oasis discontinue service,” wrote Eric Wurzbach, Vistra vice president of Natural Gas, in a declaration attached to the complaint.

The financial standoff between the Vistra and Energy Transfer subsidiaries stems from a dispute over “operational flow order” (OFO) penalties of $21.6 million. According to Vistra’s complaint, at certain times during the February 2021 Winter Storm Uri, Luminant secured and delivered natural gas volumes into Energy Transfer’s systems that exceeded the volume that was redelivered to Luminant for power generation. But during other limited periods, it was actually “short” —“meaning that its natural gas usage exceeded its deliveries” to Energy Transfer’s pipelines.

Luminant has said it had it already paid Energy Transfer “in full” for the natural gas, as well as all applicable fees, charges, and penalties. However, when the winter storm was over, Energy Transfer attempted to “impose an additional $21.6 million in charges as alleged [OFO] penalties for over-supplying natural gas during a period their systems were threatened by scarcity—i.e., punishing Luminant for helping,” the complaint alleges.

The issue has garnered some political attention given its implications on power supply in the Electric Reliability Council of Texas market. Parts of Texas are this week bracing for freezing temperatures and heightened demand.

Railroad Commission Chair Wayne Christian said on Thursday morning he was “paying close attention” to the matter. The two companies “must come together to resolve this issue so that no Texans lose gas or electric service during future cold weather. Do what’s right for Texans,” he tweeted.

In a later tweet, Christian said he was thankful both parties “were able to quickly come together to reach a resolution that keeps Texans protected this winter.”

Sonal Patel is a POWER senior associate editor (@sonalcpatel@POWERmagazine).