The Energy Information Administration (EIA) is conducting asurvey of local distribution companies (LDCs) in four northeasternstates to determine the extent that interruptible natural gascontracts influenced home heating oil prices this winter.

The Department of Energy agency currently is culling informationfrom nine LDCs in New York, New Jersey, Massachusetts andConnecticut, but at “some point” it hopes to widen the survey toinclude a total of 34 LDCs, said Joan Heinkel, director of theEIA’s natural gas division, who is heading up the IT gas study.

The EIA will need clearance from the Office of Management andBudget (OMB) to expand its survey, she said, but it doesn’tanticipate any problems. In the meantime and “given the timeconstraints, we’re trying to get at least some initial results” onwhat part, if any, IT gas contracts played in the spike in heatingoil prices in January and February.

Some believe IT gas contracts were a major contributor. Onegroup, the Fuel Merchants Association of New Jersey, has gone asfar as to ask state regulators to consider banning IT contracts,which allow gas utilities to temporarily halt service to theirlarge industrial and commercial customers when temperatures dipbelow freezing. These customers, which have dual-fuel capability,then switch to the fuel oil market for supplies, which critics saydrives up prices.

“The extent to which it [the IT gas contract] was a majorfactor, I don’t think is known at this point,” Heinkel noted. Theresults of the nine-LDC survey won’t be released as a separatereport, she said, but rather will be “used as a basis for otherreports.” She could not say when the expanded 34-LDC report wouldbe completed.

Energy Secretary Bill Richardson has been the “primary impetus”behind this survey effort, Heinkel said, adding that this wasseparate from EIA’s ongoing, 60-day review into the potential forfuel switching in the Northeast and New England regions, which areheavily dependent on heating oil as a source to heat their homes.

Several of the states, such as Connecticut and New Jersey, arefollowing the federal government’s lead and are taking a very closelook at the impact of IT contracts on heating-oil prices as well,Heinkel said.

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