As part of the Department of Energy’s (DOE) Smart Energy campaign, Energy Secretary Spencer Abraham sent a letter to state public utility commissioners suggesting areas for state action to help ease the effects of a tightening natural gas market.

“The nation is currently facing difficult price and supply issues with natural gas,” Abraham said in the letter. “I am writing to update you about this situation, to inform you of actions the administration is taking, and to offer several recommendations for state actions to address this important national energy issue.”

He recommended that states encourage consumer energy efficiency and electric and gas conservation. He also noted a need for infrastructure expansion. Abraham’s recommendations were a result of the June Natural Gas Summit, convened to discuss short-term solutions (see NGI, July 14).

Despite the recent surge in natural gas storage injections, Abraham noted that “a hot summer could increase the use of gas for electricity generation and hamper efforts to rebuild storage levels adequately before next winter. EIA forecasts that natural gas prices will average $5.00 to $6.00 per million Btu for the remainder of the year but ease slightly in 2004. Last year at this time, natural gas prices were averaging $3.32 per million Btu.”

He added that there are only limited opportunities to increase supply over the next 12 to 18 months, noting that the emphasis must be on conservation, energy efficiency, and fuel switching.

Abraham also said there are several options for PUC consideration to reduce consumers’ gas bills during the heating season, including:

“Working together we can address these problems to make the necessary improvements that will continue our economic recovery as well as ensure the reliability of energy service throughout our Nation,” Abraham concluded.

More information on the Smart Energy campaign can be found at www.energysavers.gov, while a detailed list of possible state actions is at www.doe.gov.

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