Transparency of retail energy pricing: Evidence from the US natural gas industry

Chi Keung WOO, Jay ZARNIKAU, Ira HOROWITZ, Alice SHIU

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Abstract

We test and cannot reject the hypothesis that retail pricing of natural gas is transparent for commercial and residential customers served by regulated local distribution companies in the United States. The periods of adjustment to a wholesale price change are 1.54months for the commercial price and 1.69months for the residential price. These findings support the view that regulated local distribution companies quickly adjust retail prices to fully capture any change in the wholesale natural gas price. Copyright © 2013 John Wiley & Sons, Ltd.
Original languageEnglish
Pages (from-to)300-308
JournalManagerial and Decision Economics
Volume35
Issue number4
DOIs
Publication statusPublished - 2014

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Gas industry
Transparency
Natural gas
Costs
Industry
Pricing
Energy
Retail

Citation

Woo, C.-K., Zarnikau, J., Horowitz, I., & Shiu, A. (2014). Transparency of retail energy pricing: Evidence from the US natural gas industry. Managerial and Decision Economics, 35(4), 300-308. doi: 10.1002/mde.2616