California Gov Gavin Newsom has called on the federal to immediately launch an investigation to find the cause of a recent spike in natural gas prices. File Photo by Eric Thayer/UPI | License Photo
Feb. 7 (UPI) -- California Gov. Gavin Newsom has called on the federal government to investigate the natural gas market for questionable activity that may be behind the recent spike in energy costs across Western states.
In a letter dated Monday and addressed to Chairman Willie Phillips of the Federal Energy Regulatory Commission, Newsom urged that he immediately investigate the natural gas market for manipulation, anticompetitive behavior and other anomalous activities, and if necessary use his enforcement powers to protect customers.
"Since late November 2022, wholesale natural gas prices throughout the West have risen at alarming levels that greatly exceed prices in the rest of the country," Newsom wrote, stating this has similarly escalated electricity prices as they are directly affected by the cost of wholesale natural gas.
California's residents have been suffering under the economic burden of the unexpectedly high gas and electrify bills, while the state's industrial, agricultural, commercial and other sectors have also been negatively affected by the spiking costs, he wrote.
Newsom said recent cold weather in Western states exacerbated the issue, "but those known factors cannot explain the extent and longevity of the price spike."
According to the Southern California Gas Company, the core procurement gas price was nearly 65 cents per therm of natural gas in November, which jumped to $1.05 per therm in December and $3.44 in January, representing a more than 300% climb from a year earlier. The cost per therm dropped back to $1.10 this month.
In mid-January, SoCalGas released a statement warning customers that if their peak winter bill was at around $65 last year, expect it to shoot up to about $160.
"These increases are primarily due to increases in the price of gas and to a much lesser extent increase transportation rates," the company said.
In an effort to alleviate some of the economic pressures this has put on families, the California Public Utilities Commission voted on Thursday to accelerate its climate credit program that aims to mitigate unexpected bill increases caused by higher gas prices.
An en banc hearing by the the CPUC and the California Energy Commission is also to be held Tuesday to examine causes behind the spiking costs.
"Millions of California families are opening their utility bills to sticker shock -- and we're taking action now to provide relief to help with those high bills," Newsom said Monday in a statement.
"We know this provides only temporary relief from soaring bills. That's why I'm asking the federal government to use its full authority to investigate the spike in natural gas prices and take any necessary enforcement actions."