Storing up trouble

Power

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With current natural gas prices hovering around $5 to $6 per million British thermal units (mmBtu), hedging has become an expensive business for utilities.

As price takers, they are having to be more creative to smooth out the effects of natural gas price volatility on their earnings. The typical defence against price spikes is injecting natural gas into storage for peak winter months – a natural hedge for utilities. About two thirds of natural gas local distribution companies (LDCs)

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