Locking in Natural Gas Price

[Bob F]

re:...else they would not do it.

I don't know the answer to this question, but I wonder how many of the utilility companies are forced to offer pricing options by whatever utility board they have to answer to?

Since the possibility exists for them to lose money (e.g. *everyone* chooses the fixed option and prices rise) I wonder how many of the options are offered because they have to be.

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They just buy futures to cover them if the price goes up. No risk is involved for the utility.

[Forrest]

And if the price goes down ... they don't lose money on the futures? Wish I could find some like that.

[dpb]

Bob F wrote: ...

They would certainly be glad to find out how you're going to remove any risk for them. (You _are_ going to educate them on what they've been doing wrong aren't you?)

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[HeyBub]

Almost all of them did. When they hit their ususal cash-crunch, they sold them. Only Southwest maintained their futures contracts and, until the end of this year, have been buying jet fuel at an average price of $53/bbl.