Hedging by utilities cost Wash. ratepayers $800M

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Associated Press

Posted on March 21, 2013 at 11:04 AM

OLYMPIA, Wash. (AP) — Officials say the hedging practices of natural gas companies have cost Washington ratepayers hundreds of millions of dollars.

The state attorney general's office said Thursday it wants the Washington Utilities and Transportation Commission to continue investigating the purchasing strategies used by utilities.

Utilities use hedging to avoid dramatic changes in gas prices. Officials examining the practice found that the hedging efforts in recent years led companies to typically buy gas at higher prices.

In the last five years, the natural gas companies incurred hedging losses of about $800 million. Those costs are passed directly to ratepayers.

The attorney general's office is recommending that officials place a moratorium on companies from entering into new hedging arrangements.

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