Commodity price upheavals are energizing gas utilities to evolve their business models.
Michael T. Burr is Fortnightly’s editor-at-large. Contact him at burr@pur.com.
Commodity prices and availability were the most important issues for gas utility executives last year, and continue to dominate their concerns today. But Hurricane Katrina blew away whatever complacency might have remained regarding gas-supply stability, and energy prices have vaulted to the top of utility customers’ concerns.
“We worry a great deal about volatility in natural-gas prices,” says Walt Higgins, chairman and CEO of Sierra Pacific Resources in Reno, Nev. “One of our greatest fears as a natural-gas utility is rising prices that cause rising customer unhappiness.”
Supply concerns and price volatilities create dilemmas and challenges for gas utilities. But as senior executives for several U.S. retail gas companies told Public Utilities Fortnightly, these concerns also are forcing gas utilities to re-think their business models and develop new approaches to serving customers in the uncertain years ahead.