Gov. Newsom Demands Federal Investigation of High California Gas Prices

SACRAMENTO, Calif. (KION-TV) — Gov. Gavin Newsom is calling for action after natural gas levels plummeted nationwide except for California.

Prices have gone up and some customers have seen their bills increase by more than 300 percent.

Government leaders, clients and advocacy groups want to know why.

The California Public Utilities Commission discussed the topic at a hearing on Tuesday.

California utility officials, including PG&E, blamed unseasonably cold winter weather, a surge in demand, and issues with out-of-state pipeline operators as the main cost drivers, adding that “PG&E is not raising the price of gas, we are charging our customers at the same price at which we buy it.”

Mark Toney, executive director of the taxpayer advocacy group the Utility Reform Network, or TURN, said questions should be asked of all entities involved in the sale and purchase of natural gas in California.

“Was there their speculation? Price gouging on out-of-state pipelines?” Tony said. “It’s a fact that California paid more for gas than the rest of the country.”

Governor Gavin Newsom and US Senator Dianne Feinstein have asked federal regulators to step in and investigate.

They sent a letter to the Federal Energy Regulatory Commission, or FERC, the federal agency responsible for regulating bulk natural gas sales, asking them to investigate “… whether market manipulation, anti-competitive behavior, or other anomalous activities are the cause of these continued price increases.” .

“There are many regulatory levels of oversight that should prevent this… but that doesn’t mean it always works,” said Severin Borenstien, a professor at the Haas School of Business and board member of CAL ISO.

The utilities can’t blame inflation.

The cost of wholesale natural gas across the country has fallen 50 percent in the last year, but here in California it has risen 63 percent over the same period.

“Really look at what were the reasons for the price spike and what were some of the opportunities, if there were any opportunities for speculation or market manipulation,” said Matt Baker, director of the CPUC Public Advocates Office.

Newsom said the state will provide $90 to $120 in natural gas loans to customers.

The money comes from the state’s cap-and-trade energy program.

Taxpayers don’t have to do anything to apply for this. It will simply show up as a credit on your account.

More than 70 percent of homes in California use natural gas as their primary source of heat.

Tony noted that natural gas prices in California will decline over the next month.

But even with the additional costs, PG&E is still asking the CPUC to authorize a separate, unrelated rate hike for all customers over the next four years.

“While PG&E cannot be blamed for this temporary gas rate hike, they can be blamed for all the other increases,” Tony said. “PG&E can hide behind this, but they can’t hide behind all the other rate hikes they’re asking for right now.”

Tony urged taxpayers unhappy with their bills to contact their state representatives, Newsom’s office and the CPUC to voice their concerns.

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