In a Feb. 6 letter to the Federal Energy Regulatory Commission, California Gov. Gavin Newsom asks FERC to “immediately focus its investigatory resources on assessing whether market manipulation, anticompetitive behavior, or other anomalous activities are driving these ongoing elevated prices in the western gas markets.”

In his letter to Acting FERC Chairman Willie Phillips, Newsom said that since late November 2022, wholesale natural gas prices throughout the West “have risen to alarming levels that greatly exceed prices in the rest of the country.”

Newsom said that electricity prices in the FERC-regulated California Independent System Operator Market and Western Energy Imbalance Market “have similarly escalated because electricity prices are directly affected by wholesale natural gas costs.”

He said that while wholesale natural gas price increases were exacerbated by early cold weather
in the western states, “those known factors cannot explain the extent and longevity
of the price spike.”

The extended high prices have prompted the California Public Utilities Commission and the California Energy Commission to convene an en banc meeting with market experts from across the country to explore all the possible drivers behind the wholesale natural gas price spikes, as well as any measures that could protect electric and gas utility customers, Newsom noted.

“However, it is clear that the root causes of these extraordinary prices warrant further examination,” he said.

“I therefore ask that FERC immediately focus its investigatory resources on assessing whether market manipulation, anticompetitive behavior, or other anomalous activities are driving these ongoing elevated prices in the western gas markets,” he said.

“And, if warranted, I ask that FERC bring its full enforcement powers and resources to bear to
protect customers. I also offer California’s resources to assist in any data collection that FERC may require.”