Newsom calls for federal probe into soaring natural gas prices
California Gov. Gavin Newsom (D) called for an investigation into his state’s soaring natural gas prices in a letter sent on Monday to the Federal Energy Regulatory Commission (FERC).
“Wholesale natural gas prices throughout the West have risen to alarming levels that greatly exceed prices in the rest of the country,” Newsom wrote in the letter.
The governor requested that the agency “immediately focus its investigatory resources on assessing whether market manipulation, anticompetitive behavior, or other anomalous activities are driving these ongoing elevated prices in the western gas markets.”
While natural gas prices have been falling around the world, spot prices in Southern California early last month averaged about $19.40 per million British thermal units, The Wall Street Journal reported.
This was about five times greater than the U.S. benchmark, which had been trading at about $3.75 at the time, according to the Journal.
While Newsom acknowledged that cold weather events initially raised prices, he stressed that “those known factors cannot explain the extent and longevity of the price spike.”
To provide Californians with some relief, Newsom said that millions of residents will receive credits of $90 to $120 in their utility bills next month.
Last week, the California Public Utilities Commission (CPUC) voted to accelerate the California Climate Credit program — a measure aimed at helping families cope with high gas bills, the governor’s office explained.
The $90-$120 credit will be applied to residential utility bills beginning in March for customers of Pacific Gas and Electric, Southern California Edison, San Diego Gas & Electric and Southern California Gas Company, according to the CPUC.
Customers of Bear Valley, Liberty, PacifiCorp and Southwest Gas will also receive credits of varying amounts, the agency stated.
“Millions of California families are opening their utility bills to sticker shock,” Newsom said in a statement.
“We know this provides only temporary relief from soaring bills,” he continued. “That’s why I’m asking the federal government to use its full authority to investigate the spike in natural gas prices and take any necessary enforcement actions.”
After Newsom sent the letter to FERC on Monday, the CPUC’s consumer advocate branch voiced support for a federal investigation into the high gas prices.
“Now is the time to identify the causes of the alarmingly high gas bills that are affecting millions of Californians,” Matt Baker, director of the Public Advocates Office, said in a statement.
“We need a better understanding of whether any profiteering or market manipulation has occurred,” Baker added.
The Hill has reached out to FERC for comment.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.