Facing a hearing room jammed with protestors and gas industry representatives, the Federal Energy Regulatory Commission voted unanimously yesterday to take what could be the first step toward raising average natural gas prices for consumers by more than 30 percent--about $10 billion--in the next year.
But in doing so, the commission, which has become the target of considerable congressional and other opposition, emphasized the tentative, fact-finding nature of its action.
All four commissioners voted to adopt a "notice of inquiry," described by FERC Chairman C. M. (Mike) Butler as "an effort to try to find out what the facts are."
Under the adopted notice, the commission is soliciting comments on whether current conditions in natural gas markets and certain impacts of the Natural Gas Policy Act of 1978 are producing serious economic distortions. In particular the commission will examine whether prices are too low for "old" gas--gas discovered before 1977, which accounts for approximately 60 percent of the supplies for interstate pipelines.
Butler said the commission would allow 120 days for comments because of the great interest in the issue and would decide, based on the record compiled, whether to take action.
The order adopted was worded carefully, noting that it "does not propose solutions, but initiates an investigation into the possible existence of a market ordering problem and possible courses of corrective action, should such problem exist."
The law controlling gas prices allows those controls to be removed on Jan. 1, 1985, from the price of gas found after February 1977. At issue is whether continuing to hold down the prices of old gas will produce natural gas shortages and enormous price variations based on access to price-controlled gas.
Approximately 150 demonstrators--many of them elderly--from Baltimore and Washington gathered in front of FERC's headquarters yesterday to protest any attempt to raise prices of old gas. Efforts by three of the protestors to speak at the hearing were rebuffed.