Taking its cue from FERC’s Dec. 15 ruling on reforms in theCalifornia power markets, a national group of municipal gasdistributors last week called on the Commission to immediatelyissue an order that would set $2.74/Mcf as the benchmark price fornatural gas over the next three years, and would provide forcustomer refunds for any sales above that level.

In a complaint filed last Thursday against “all sellers ofnatural gas in the United States of America in interstatecommerce,” the National Association of Gas Consumers (NAGC) askedthe Commission to take this action in response to escalatingnatural gas prices, which it noted quadrupled to more than $9/MMBtuby the end of 2000 compared to the year-earlier period [RP01-223].

The Annapolis, MD-based municipal gas group based the requestedbenchmark level on a 1999 National Petroleum Council report, whichprojected that the average production weighted U.S. wellhead gasprice would be $2.74/Mcf through 2010 and would be sufficient togrow supply to 29 Tcf. Sales above this level should become thetarget of complaints filed at FERC for refunds of “unjust andunreasonable” rates over a three-year period, beginning Jan. 1 ofthis year, it said.

In the alternative, it asked that the current high gas prices beset for investigation and hearing as “unjust and unreasonable,” andat the conclusion, sellers be directed to refund excessive pricesto consumers.

As in the power markets, a “crisis now exists in the nation’snatural gas markets, which not only contributes to and heightensthe problems found by the Commission to exist relating to thewestern markets for electric power, but which, if not immediatelyremedied, will have a profound adverse effect on electric pricesand new gas-fired electric generating plants throughout the UnitedStates, as well as on the nation’s gas consumers,” it told theCommission.

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