why natural gas and not gasoline?

[livincountry]

With such a diversity of knowledge on this website I bet someone knows the answer to this one:

I'm not complaining about the price of gas but I was wondering why here in Ohio utility companies must receive permission to raise the price of electricity or natural gas from the PUCO (Public Utility Comission of Ohio). Gasoline is just as vital (in most people's eyes anyway) but the price comes and goes.

Like I said, no sour grapes but I was just curious.

Tony

 

[goaliedad]

My guess is because natural gas and electricity is sold by a govenment regulated monopoly- no competition, so the government ( Public Service Commission ) must approve price changes. Gasoline is supposed to have the benefit of competition to keep the price in check. Good theory I guess!

 

[midlf]

Goaliedad - you are exactly correct.

 

[Tom_H]

We can buy gasoline from many competitors, each of whom can manage his own infrastructure. If 20 different competitors were all allowed to put separate gas lines to your house, and you chose one for connection, leaving the other 19 shut off, well, you can see the cost of unused investment. That's the theory anyway, for the government to select one provider in any given area and regulate him so he can't price gouge.

In some places, it is now allowed, however, for one electric grid to have multiple sources inputting to the grid, and you select the one you want as your "provider". (Some people select "green" i.e. wind or solar providers and willingly pay a higher rate.) Perhaps local NG infrastructures will some day be similarly deregulated.

 

[midlf]

In many areas large users can buy gas in the open market, arrange and pay for pipeline transportation contracts, and then pay the local gas utility a handling/transport fee.

 

[kenmac]

Where I live, there are several small cities that own/operate their own nat. gas system. They sell/distribute nat. gas to homes & businesses. They aren't regulated by the public service commission.

 

[midlf]

In WI the municipal electric utilities and coops are not regulated by the Public Service Commission. I guess they figure voters are able to have control over these entities. However municipal water utilities are all regulated by the WPSC, go figure.