Consumer Expert's Paper Explores Gas Price Mitigation Strategies

A new upload on the LIHEAP Clearinghouse website is "Natural Gas Price Volatility: Regulatory Policies to Assure Affordable and Stable Gas Supply Prices for Residential Customers," by Barbara R. Alexander, Consumer Affairs Consultant. Completed under a contract with Oak Ridge National Laboratory's Energy Division, the paper explores regulatory policies in twelve states that affect natural gas prices. 

While observing a general lack of regulatory policies governing gas supply procurement and a tendency among regulators to defer to short-term procurement policies that increase volatility, Alexander noted that several states, including Indiana, Michigan, Rhode Island, Arkansas, and Arizona, have initiated strategies, including hedging or gas supply portfolio management, to regulate gas procurement. In the process, they have demonstrated that they can provide natural gas supply at more stable or even lower prices than neighboring states. 

Such strategies are necessary, Alexander writes, because many residential customers rely on gas for home heating and are subject to price increases in the winter when they need it most, and, when gas is unaffordable for home heating health and safety risks may result.  Furthermore, unlike industrial customers, residential customers have limited means to respond to price hikes, being at the mercy of weather and natural gas supply.

Page Last Updated: December 7, 2005