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New England senators ask FERC to review recent natural gas prices


From the March 31, 2014 issue of Public Power Daily

Originally published March 31, 2014

By Robert Varela
Editorial Director
Six New England senators have asked the Federal Energy Regulatory Commission to review recent increases in natural gas prices in New England to ensure that they reflect supply and demand and are not being increased by speculation or manipulation. The senators also asked the commission for recommendations for ways to reduce natural gas price volatility in the region.

"Unfortunately, wild fluctuations and record prices for ... natural gas over the last two winters have eroded end-users’ confidence" in natural gas markets, said the March 25 letter from Sens. Jeanne Shaheen, D-N.H.; Edward Markey, D-Mass.; Richard Blumenthal, D-Conn.; Jack Reed, D-R.I.; Sheldon Whitehouse, D-R.I; and Angus King, I-Maine. New England’s average spot price for early 2014 was a record $22.53 per million British thermal units – "over fifty percent higher than this timeframe a year ago and far above the national average," they said.

Natural gas's share of the electricity generation portfolio in the New England region increased from less than 20 percent in 2001 to more than 50 percent in 2012, the senators noted. "This shift, coupled with limited pipeline capacity, has contributed in part to the recent increases in spot prices for businesses." New England’s governors recently committed to cooperate on the need to increase natural gas pipeline capacity in the region, the senators said. "While such efforts are critical for New England’s long-term energy future, we must ensure that the current natural gas markets are functioning properly." 
 

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