American Gas - May 2013 - (Page 22)

hedging. One commissioner urged the utilities to be more transparent in their hedging process, according to a report published in the Seattle Post-Intelligencer. The incident is a reminder that utilities must work continually to clarify the objectives of their hedging strategies, energy consultant Julia Ryan told American Gas. Second-guessing of hedging strategies is common when stakeholders forget the original intent, said Ryan, of Seattle-based Aether Advisors. “The intent of hedging is not to beat the market,” she said. “The intent is to limit the impact of price volatility.” Hedging with financial derivatives became a fairly common practice in the natural gas sector around 2002, said Andrew Soto, senior managing counsel at AGA. In fact, it saved consumers a lot of money during the period of rising prices from 2003 to 2008, Soto added. State regulatory commissions encouraged utilities to do more of it. Given the expectation that natural gas prices have entered a period of relative price stability, it makes sense for all utilities to review their hedging strategies. But some type of hedging is probably still necessary, said Soto, pointing out that natural gas prices jumped above $4 in Depend on Southern Cross for your pipeline safety, field services, and product sales. TECHNICAL SERVICES PIPELINE INTEGRITY SERVICES trusted partner of utilities everywhere cathodic protection / corrosion services GAS - Leakage Surveys - CP Reads - AC Inspections - Sub Part W - Meter Reading - AMR/AMI Installs - Meter Changeouts - Meter Painting ELECTRICAL - Stray Voltage Testing - AMR/AMI Installs - Meter Exchanges - Direct Assessment (ECDA, ICDA, SCCDA) - NDT/ Bell Hole Examinations (DA and ILI) - Above Ground Surveys (ACCA, CIS, ACVG, DCVG, Soils, GPS) - Integrity Management @STHRNcrossCORP ... as well as training seminars! southerncrosscorp.com 1.800.241.5057 22 AMERICAN GAS MAY 2013 CITY HALL Power in Numbers U.S. cities consider negotiating group rates for gas supply SPRINGFIELD, ILL. — With the popularity of municipal electric aggregation programs surging, the Illinois Commerce Commission is gauging interest among cities and towns in creating natural gas aggregation programs. In the past two years, hundreds of Illi- ADD ENERGY TO YOUR ADVERTISING American Gas is the one way you can be sure to reach the industry’s leaders, decision makers, and purchase influencers. Tap into extraordinary opportunities—today! PRODUCTS - EZ Tech Compliance & Reporting Software - Leak Detection Equipment - Marking & Locating Instruments - Specialty Equipment - Gas Leak Detection Equipment - Vivax MetroTech Defect Mappers March due to unusually cold weather. “If you were completely unhedged, you’d be paying a lot more than if you had hedged.” Ryan said utilities should work with stakeholders including regulators, consumer advocates, and large industrial consumers to determine how much price risk is acceptable. “Then you should meet frequently to head off some of these issues before they arise,” she said. “There shouldn’t be any surprises.” —J.P.T. 46 HAWK FLAMEPACK 400 Call Don Serfass 800-394-5157 ext. 30 or email dserfass@mcneill-group.com http://www.southerncrosscorp.com http://www.southerncrosscorp.com

Table of Contents for the Digital Edition of American Gas - May 2013

American Gas - May 2013
Contents
President’s Message
Subject Index
Sandy Coins Say Thanks
Digest
Issues
Update
Need to Know
By the Numbers
Places
Need to Know
Taking a Bite out of Food Truck Pollution
Canada
Capitol Hill
State House
City Hal
Safety: Getting Employees Invested
The Rails
Profile
AGA Ops Conference Preview
Procurement
Jobs
Buyer’s Guide
Marketplace
Headway

American Gas - May 2013