Skyrocketing natural gas prices should be investigated for market manipulation, California Governor Gavin Newsom says
- Regulators need to look into California's surging energy prices, the state's governor said.
- California residents are paying nearly a 600% premium on natural gas prices, according to recent estimates.
Skyrocketing natural gas prices need to be investigated for market manipulation and other bad behavior, according to California Governor Gavin Newsom.
"Since late November 2022, wholesale natural gas prices throughout the West have risen to alarming levels that greatly exceed prices in the rest of the country," Newsom said in a letter to the Federal Energy Regulatory Commission on Monday, pointing to the imbalance between California's energy prices and prices across the rest of the US.
While overall US gas prices have plunged to $2.80 per million British thermal units, down over 70% from their highs in August of last year, California's gas prices averaged $19.40 per million BTUs in early January, according to the Wall Street Journal. That suggests California residents are paying nearly a 600% premium.
Along with the pressure of high inflation throughout the economy, soaring energy costs have been a enormous burden on California's residents, Newsom said. He added that natural gas prices affect the state's industrial, agricultural, and water utilities, and urged regulators to look into the market's price pressures in the west.
"It is clear that the root causes of these extraordinary prices warrant further examination. I therefore ask that FERC immediately focus its investigatory resources on assessing whether market manipulation, anticompetitive behavior, or other anomalous activities are driving these ongoing elevated prices in Western gas markets," Newsom said.
While the west battles soaring energy costs, natural gas markets across the rest of the nation have been getting some relief due to a relatively warm winter, which has kept a lid on consumers' energy demand while US natural gas production has also increased.