En banc natural gas hearing at CPUC spawned by Governor’s demand for lower gas prices

Yesterday, California Governor Gavin Newsom sent a demand letter to FERC, the Federal Energy and Regulatory Commission to initiate an investigation into natural gas price manipulation.  In a separate press release, Newsom has claimed that “Natural Gas Price Relief is on the way!

According to Newsom, The California Public Utilities Commission (CPUC) recently accelerated the delivery of electricity bill credits of  $90 to $120 to provide relief from the wholesale natural gas price spikes in a month or two.  Public Watchdogs notes that Governor Newsom has made unfulfilled promises in the past to give Californians money to offset high energy prices.  The plan is similar to a failed promise Newsom made almost a year ago to provide a $400 check to every registered vehicle owner in California to offset high gasoline prices.

According to Nina Babiarz, a public advocate and development director for Public Watchdogs “Newsom has not solved the problem of exorbitant energy prices.  He put a band-aid where a tourniquet was required.  This is a consumer affordability issue.  The consumer’s ceiling of tolerance has been reached.”

Today, in response to the Governor’s concerns about energy costs, the California Public Utility Commission (CPUC) engaged in an unusual En Banc hearing into the recent natural gas price spikes in California.  In French, en banc means “full court,” so an En Banc hearing is one where all of the five CPUC Commissioners and the CPUC president are called upon to attend.  The public hearing, took the form of a virtual webinar (get the recording here).

Today’s meeting, which appears to have been convened on an emergency basis, called on key players in California’s natural gas industry to explain the price hikes and offer potential solutions for preventing another natural gas price crisis in the near future.

Bringing stability to an “unregulated natural gas market”

The CPUC hosted the hearing in cooperation with the California Independent System Operator  which manages the flow of electricity in California. The hearing also included  the California Energy Commission, which is responsible for moving the state away from fossil fuels like natural gas to renewable energy.

The meeting explored the alleged market dynamics behind the high prices, the role of Federal safety rules during interstate pipeline outages, and the devastating effect of high natural gas prices on California businesses and consumers.

Unlike electricity, the CPUC does not regulate natural gas prices, but today’s meeting represented an effort by the Commission to gain a better understanding of the market dynamics behind the recent skyrocketing prices of natural gas.  According to Commissioner Darcy Houck, the Commission wants to “find a way to bring stability to an unregulated natural gas market.”

The CPUC has also directed utilities to enhance their customer outreach and engagement efforts to effectively communicate how bill assistance programs work, plus the various actions customers can take to safely reduce their gas consumption.


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