An investigation into rising natural gas prices has been announced by the California Public Utilities Commission (CPUC). This investigation concerns the December 2022 spike in natural gas prices, which resulted in higher utility bills for customers.
Natural gas prices rise in December
Natural gas prices spiked in wholesale markets in December 2022 in major trading centers in the western United States due to cold weather, high demand and supply issues. Daily spot natural gas prices outperformed all other U.S. markets, including the benchmark.
Daily spot natural gas prices hit a record high
The daily spot price of natural gas at Pacific Gas & Electric (PG&E) Citygate jumped 125% to $56.429 per million British thermal units (MMBtu) on December 21, 2022. Prices were trading around $6.939 per MMBtu on Thursday.
CPUC launches investigation into natural gas price hike
The CPUC announced that it has launched an investigation to examine the causes and impacts of the price spikes, the potential for recurrence this summer and measures to mitigate the volatility. The statement follows Governor Gavin Newsom’s request to the Federal Energy Regulatory Commission (FERC) to investigate any market manipulation, anti-competitive behavior or other anomalous activities that may have resulted in high prices.
In response to the California governor’s request, FERC announced that it was conducting a monitoring exercise to determine whether market participants had engaged in behavior that contributed to or benefited from high gas prices. This investigation is focused on whether natural gas prices in California are artificially high due to anti-competitive practices or market manipulation.
