Public Utilities Reports

PUR Guide 2012 Fully Updated Version

Available NOW!
PUR Guide

This comprehensive self-study certification course is designed to teach the novice or pro everything they need to understand and succeed in every phase of the public utilities business.

Order Now

Iowa Issues Gas Price-hedging Guidelines

Fortnightly Magazine - October 15 1995

Concluding its inquiry into the use of financial derivatives by the state's natural gas local distribution companies (LDCs), the Iowa Utilities Board (UB) has given utilities the burden of showing that financial transactions are not "overly speculative." At a minimum, the UB expects an LDC's financial position to be "clearly associated with a physical quantity of gas purchased at indexed prices." When discerning between hedging and speculating in a swap transaction, an LDC must show that the swap includes the same quantity, duration, and pricing reference point as the physical gas. The UB will require filing of relevant data as part of the purchased-gas reconciliation process when associated costs and revenues are flowed through to

ratepayers. Re Gas Price Hedging, Docket No. NOI-94-1, Aug. 16, 1995 (Iowa U.B.).


Articles found on this page are available to Internet subscribers only. For more information about obtaining a username and password, please call our Customer Service Department at 1-800-368-5001.