storage

Gas Price Prudence: From Hedge-and-Hope to Best Practice

Utilities and regulators should follow the same ideas that govern risk management at the largest of commodity trading houses.

Gas Price Prudence: From Hedge-and-Hope to Best Practice



Utilities and regulators should follow the same ideas that govern risk management at the largest of commodity trading houses.

The July 5, 2001 issue of offered an update on what utilities and regulators are doing in the area of commodity price hedging for natural gas.

The headline read, "Dominion East Ohio Sales Customers Will Pay 29% Less in Gas Costs under PUCO-Led Encouragement of Hedging Plan...."

Natural Gas Hedging: A Primer for Utilities and Regulators

What commissions need to learn. <br>What LDCs should already know.

Natural Gas Hedging: A Primer for Utilities and Regulators



 

What commissions need to learn.
What LDCs should already know.

The facts are now in. If utilities had hedged their natural gas purchases during the 1990s, they could have earned windfalls for those they serve, given the wild price gyrations of the past decade (). Yet few if any households or businesses saw any windfall, because few utilities were engaged in futures and other derivatives markets.

Frontlines

Gas pipelines compete against electric transmission lines. And the pipes are winning.

Frontlines

The Grid Is Dead

 

 

Perspective

I wanted deregulation. But not if we can't do it right.


I wanted deregulation. But not if we can't do it right.

As an economist, I confess I failed to predict the disaster in California. But I wasn't the only one. Anybody who tells you differently is either lying, fooling himself, or guilty of Monday morning quarterbacking.

The Gas-fired Future: Boom or Bust?

Last year brought prices not seen for decades. So consumers will buy less gas, just as before, and send the forecasts out the window.

1 For examples of the degree to which buildings have conservation features such as multiple glazing and exterior or interior shading and awnings the reader is referred to "A Look at Commercial Buildings in 1995: Characteristics, Energy Consumption and Energy Expenditures," DOE/EIA - 0625 (95), October 1998. For information on conservation practice in the residential sector see "A Look at Residential Energy Consumption in 1997," DOE/EIA - 0632 (97), November 1999.