Effects of interruptible natural gas service: Winter 1989--1990
During the extreme winter conditions experienced in December 1989, petroleum products showed dramatic price increases. Supply of certain products such as propane reached critical levels. Numerous factors contributed to the heating fuel situation, including well freeze-ups and refinery problems, as well as difficulties associated with delivery of the product. An area of concern identified in the ensuing debates was the impact of customer requirements for petroleum products resulting from curtailment of natural gas purchases under interruptible contracts. The lower rates associated with interruptible contracts make them an attractive choice for electric utilities. However, they require that the customer be prepared to obtain adequate fuel supplies in the event of curtailments. Electric utilities prepare for these contingencies with stocks of alternative fuels. Particularly in cold climates, interruptible has contracts are part of doing business. The extent and duration of the interruptions faced by customers relate principally to weather factors. Previous EIA studies investigated on a national level the causes of the dramatic price increases seen in petroleum product markets in the 1989--1990 heating season. This study is in response to a request from Senator Timothy Wirth, Chairman, Subcommittee on Energy Regulation and Conservation, to study in detail the impact of interruptible natural gas contracts as one of the factors cited as contributing to the price increases. A copy of the letter requesting the study is contained in Appendix A.
- Research Organization:
- USDOE Energy Information Administration, Washington, DC (United States). Office of Oil and Gas
- Sponsoring Organization:
- USDOE, Washington, DC (United States)
- OSTI ID:
- 10115613
- Report Number(s):
- SR/OG-91-01; ON: DE92006694; NC: NONE
- Resource Relation:
- Other Information: PBD: Jul 1991
- Country of Publication:
- United States
- Language:
- English
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