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Natural Gas: Factors Affecting Prices and Potential Impacts on Consumers

GAO-06-420T Published: Feb 13, 2006. Publicly Released: Feb 13, 2006.
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Highlights

In early December 2005, wholesale natural gas prices topped $15 per million BTUs, more than double the prices seen last summer and seven times the prices common during the 1990s. For the 2005-2006 heating season, the U.S. Energy Information Administration predicts that residences heating with gas will pay 35 percent more, on average, than they paid last winter. This testimony addresses the following: (1) the factors causing natural gas price increases, (2) how consumers are affected by these higher prices, and (3) the roles federal government agencies play in ensuring that natural gas prices are determined in a competitive and informed marketplace. This testimony is based on GAO's 2002 published work in this area, updated through interviews, examination of data, and review of relevant publications. GAO's new work was conducted from December 2005 through February 2006 in accordance with generally accepted government auditing standards.

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Consumer educationConsumer protectionEconomic analysisFinancial analysisHurricanesNatural gasNatural gas pricesPrice regulationPrices and pricingPublic utilitiesUtility ratesHeating