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California Governor Gavin Newsom called this week to investigate by the Federal Energy Regulatory Commission to determine whether market manipulation or anticompetitive behavior could explain why the state’s natural gas prices are higher. other places in the US
Prices spiked in December during a winter storm to $55/MMBtu, prompting California utilities to warn of sky-high bills.
Since then, prices have dropped significantly but remained above $15/MMBtu last week at several delivery points in California, while Henry Hub gas prices have dipped below $3/MMBtu.
In a letter to Acting FERC President Willie Phillips, Newsom acknowledged the impact of cold weather in early winter but said it was “impossible to explain the extent and duration of the bull run.”
Two of the state’s largest utility companies, PG&E (NYSE:PCG) and Sempra Energy’s (NYSE:SRE) Southern California Gas said it supported Newsom’s call for an investigation, asserting that it did not fix gas prices and that the costs were passed on to customers without price increases.
State energy regulators began hearings on Tuesday to look at the causes and effects of high rates of natural gas.
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Newsom’s call for a federal investigation into the natural gas market as his proposal to limit the profits of oil companies operating in California by cutting their total refining profits.
