California Governor Newsom Requests Federal Probe of Skyrocketing Natural Gas Prices
(Bloomberg) — California Gov. Gavin Newsom has urged federal energy regulators to investigate a recent hike in natural gas prices that has led to sky-high utility bills.
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Newsom, a Democrat, wrote a letter asking the Federal Energy Regulatory Commission to investigate whether market manipulation, anticompetitive behavior or other activities have been driving up gas prices in the western United States, according to a statement Monday.
The call for a probe comes after the wholesale price of natural gas in Southern California rose to more than nine times the benchmark US natural gas futures price in December, prompting California utilities to warn of staggeringly high bills. Several factors have contributed to the rising prices, including colder-than-normal weather, reduced pipeline capacity due to maintenance work, and low gas storage levels in the western US.
PG&E and Sempra Energy’s Southern California Gas Co., two of the state’s largest gas utilities, said they support Newsom’s call for an investigation. The utilities said they don’t set the price of gas and pass its cost on to customers without a markup.
State energy regulators are scheduled to hold a hearing Tuesday to examine the causes and effects of increased gas prices. Last week, state regulators voted to speed up loan disbursements between $90 and $120 to offset high utility bills.
“Now is the time to determine the causes of the alarmingly high gas bills affecting millions of Californians,” said Matt Baker, director of the Public Advocates Office, a division of the California Public Utilities Commission. “We need a better understanding of whether profiteering or market manipulation has occurred.”
(Updates with comment from utilities in fourth paragraph, consumer advocates in sixth)
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