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Historical Information - Winter Energy Outlook 2005-2006
Snapshot of Winter energy prices and supplies:
- FERC is actively monitoring natural gas and electricity prices;
- In 2005, natural gas prices climbed even before Hurricanes
Katrina and Rita damaged the energy infrastructure and natural
gas production in the Gulf of Mexico. The hurricanes caused
significant amounts of domestic natural gas to be shut in
between August and November. Even today, over 20 percent of
the Gulf's natural gas production remains unavailable to help
meet high Winter natural gas demand;
- Mild weather during October and November 2005 allowed enough
of the available natural gas to be diverted to storage so
that the natural gas storage fields throughout the U.S. are
quite full. With the colder weather arriving in December,
however, stored natural gas is being withdrawn at a brisk
rate. The real test is whether there is enough gas left in
storage after January;
- A mild winter would allow New England to get through the season
without serious price spikes or problems with electricity generators
having enough natural gas. However, a colder than normal winter
will eventually draw down the natural gas in storage and drive
up gas and electricity prices even higher and perhaps cause shortages;
- The Commission is acting to ensure that prices do not go
even higher due to market manipulation. Even though the majority
of sales of natural gas are not subject to its jurisdiction,
the Commission actively monitors natural gas markets to determine
whether any price spikes are the result of market manipulation
or the laws of supply and demand.
- An inability to strengthen the energy infrastructure will likely
result in higher prices and greater price volatility. The Commission
is working diligently within its authorities to promote adequate
and reliable infrastructure and to prevent market manipulation.
We will closely monitor gas markets in the coming winter and take
appropriate steps within our authorities to protect customers
to the maximum extent possible.
Commission's response to high gas prices
Facts on Energy Prices and Supplies
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