Tag Archives: Electricity/Gas Utilities

Business

Natural-Gas Prices Plunge as Unseasonably Warm Weather Is Forecast

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A sudden thaw across the Northern Hemisphere has melted down natural-gas prices, upending dire forecasts of energy shortages and sinking Vladimir Putin’s plan to squeeze Europe this winter.

It isn’t expected to remain as balmy as it was on Wednesday, when temperatures hit 66-degrees Fahrenheit in New York, but the forecasts that energy traders monitor call for abnormally warm weather extending into February, sapping demand for the heating fuel.

U.S. natural-gas futures for February delivery ended Wednesday at $4.172 per million British thermal units. That is down 57% from the summer highs notwithstanding a 4.6% gain on Wednesday that snapped a four-session losing streak, including an 11% drop on Tuesday. 

The price is now about the same as it was a year ago, when temperatures were also warmer than normal and before Russia’s invasion of Ukraine jolted energy markets.

The plunge is a bad omen for drillers, whose shares were among the stock market’s few winners last year. Cheaper gas is good news for households and manufacturers whose budgets have been busted and profit margins pinched by high fuel prices. Though shocks of cold and problems with pipelines could still push up regional prices, less expensive natural gas should help to cool inflation in the months ahead. 

There are also major geopolitical implications. Mild weather is driving gas prices lower in Europe, too, spelling relief for the region that coming into the winter faced the possibility of rolling blackouts and factory shutdowns. The war threw energy markets into chaos, but benchmark European natural-gas prices are now less than half of what they were a month ago and lower than any point since the February invasion. 

The drop is a welcome surprise for European governments that committed hundreds of billions of dollars to shield consumers and companies from high energy prices. Moscow cut supplies of gas to Europe last year in what European officials described as an attempt to undermine military and financial support for Kyiv.

So far, Russia’s strategy isn’t working. Warm weather is limiting demand, as is a European Union-led effort to curb consumption. But analysts say prices in Europe could shoot up again when the continent tries to refill stores for the 2023-24 winter without much Russian gas.

PHOTOS: How a 102-Year-Old Maritime Law Affects Today’s Home-Heating Prices

Besides being burned to heat roughly half of American homes, natural gas is used for cooking, along with making electricity, plastic, fertilizer, steel and glass. Last year’s high prices were a big driver of the steepest inflation in four decades.

When prices peaked in August, the question was whether there would be enough gas to get through the winter, given record consumption by domestic power producers with few alternatives, as well as demand in Europe, where the race is on to replace Russian gas.

Now the question in the market is how low prices will go.  

They were already falling when the late-December storm brought snow to northern cities and stranded travelers. Frigid temperatures prompted a big draw from U.S. natural-gas stockpiles and froze wells in North Dakota and Oklahoma. At its peak, the storm took nearly 21% of U.S. gas supply offline, according to East Daley Analytics, a gas consulting firm.  

The demand surge and the supply disruptions were fleeting and failed to counteract forecasts for balmy January weather. Prices were also pushed lower by another delay in the restart of a Texas export facility. It has been offline since a June fire left a lot of gas in the domestic market that would have otherwise been shipped overseas. 

Temperatures above 60 degrees Fahrenheit are forecast this week around the Great Lakes and along the Ohio Valley, while highs in the Southeast might reach into the 80s.

As measured in heating-degree days, a population-weighted measure of temperatures below 65 degrees Fahrenheit, this week will be twice as warm relative to normal as the last week of December was cold, said Eli Rubin, senior energy analyst at the gas-trading firm EBW AnalyticsGroup.

The firm estimates that warmer weather over the first half of January will reduce gas demand by about 100 billion cubic feet over that stretch. That is about the volume of gas that the U.S. produces each day. The Energy Information Administration estimates that daily American output hit a record in 2022.

Analysts anticipate similarly strong production in 2023. They expect the year to pass without new LNG export capacity coming online for the first time since 2016, when the U.S. began to ship liquefied natural gas abroad from the Lower 48 States. 

“The market is moving from a mind-set of winter scarcity to looking ahead to exiting winter with more in storage, adding production and not adding any new LNG exports,” Mr. Rubin said. “If anything, the market looks oversupplied.” 

Analysts have been reducing their gas-price assumptions as well as their outlooks for producers as the first weeks of winter pass without sustained periods of cold weather. 

Gabriele Sorbara, an analyst at Siebert Williams Shank, told clients this week that he expected natural gas to average $4.25 in 2023, down from a forecast of $5.50 before the warm spell. As a result, he downgraded shares of

EQT Corp.

, the biggest U.S. producer and one of the top-performing stocks in the S&P 500 last year, from buy to hold. 

“EQT will be dead money until estimates recalibrate and there is visibility of a rebound in natural-gas prices,” he wrote in a note to clients.  

SHARE YOUR THOUGHTS

What price changes are you seeing in your natural-gas bill this winter? Join the conversation below.

Hedge funds and other speculators have, on balance, been bearish on natural-gas prices since the summer, maintaining more wagers on falling prices than on gains, according to Commodity Futures Trading Commission data. Analysts said that is probably the safe bet. 

“We continue to caution against any attempts to time a price bottom,” the trading firm Ritterbusch & Associates told clients this week. 

—Joe Wallace contributed to this article.

Write to Ryan Dezember at ryan.dezember@wsj.com

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Business

Rising Power Prices in Europe Are Making EV Ownership More Expensive

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BERLIN—Rocketing electricity prices are increasing the cost of driving electric vehicles in Europe, in some cases making them more expensive to run than gas-powered models—a change that could threaten the continent’s electric transition.  

Electricity prices have soared in the wake of Russia’s invasion of Ukraine, in some cases eliminating the cost advantage at the pump that EVs have enjoyed. In some cases, the cost difference between driving both types of cars 100 miles has become negligible. In others, EVs have become more expensive to fuel than equivalent gasoline-powered cars.

The price rises for power, which economists expect to last for years, remove a powerful incentive for consumers who were contemplating a switch to EVs, which used to be much cheaper to run than combustion engines. 

Coming just as some governments are removing subsidies for EV buyers, this change could slow down EV sales, threaten the region’s greenhouse-gas emission targets, and make it hard for European car makers to recoup the high costs of their electric transition.

In Germany,

Tesla

has raised supercharger prices several times this year, most recently to 0.71 euros in September before falling somewhat, according to reports from Tesla owners on industry forums. There is no public source to track prices on Tesla superchargers. 

At that price, drivers of Tesla’s Model 3, the most efficient all-electric vehicle in the Environment Protection Agency’s fuel guide in the midsize vehicle category, would pay €18.46 at a Tesla supercharger station in Europe for a charge sufficient to drive 100 miles. 

By comparison, drivers in Germany would pay €18.31 for gasoline to drive the same distance in a Honda Civic 4-door, the equivalent combustion-engine model in the EPA’s ranking. 

Tesla didn’t immediately respond to requests for comment.

The change has been particularly notable in Germany, Europe’s largest car market, where household electricity cost €0.43 per kWh on average in December. This puts it well ahead of France, where consumers paid €0.21 per kWh in the first half of the year, but behind Denmark, where a kWh cost €0.46, according to the German statistics office.

Would you choose an electric car that charges faster even if it meant a more-limited driving range? WSJ tech columnist Christopher Mims joins host Zoe Thomas to discuss the latest research into fast-charging EV batteries and the trade-offs they may come with. Plus, we visit a high-performance EV race to see what these kinds of batteries can really do. Photo: ABB FIA Formula E World Championship

The cost of electricity isn’t the only factor that can make an EV cheaper or more expensive to run than a gas-powered car. The price of the car, including potential subsidies, the cost of insurance and the price of maintenance all play a role in the cost equation over a car’s lifetime. 

Maria Bengtsson, a partner at Ernst & Young responsible for the company’s EV business in the U.K., said studies of the total cost of owning an EV now show that with much higher electricity prices, it will take longer for EVs to become more affordable than conventional vehicles.

“When we looked at this before the energy crisis, we were looking at a tipping point of around 2023 to 2024. But if you assume you have a tariff going forward of $0.55, the tipping point then moves to 2026.”

If costs for operating EVs rise again, the tipping point would be pushed even further into the future, she said.

So far, there is no sign that the higher costs to charge electric cars has affected EV sales. Sales of all-electric cars totaled 259,449 vehicles in the three months to the end of September, up 11% from the previous quarter and 22% from the year earlier, according to the European Automobile Manufacturers’ Association. In the third quarter, all-electric cars accounted for 11.9% of total new vehicle sales in the EU. 

There is no relief in sight for EV users. In Germany, power prices have risen by a third from €0.33 per kWh in the first half of this year, according to Germany’s federal statistics office, and some power companies have announced prices will increase to more than €0.50 per kWh in January.  

The German government’s independent panel of economic experts forecast that in the medium term these prices are likely to decline but won’t return to precrisis levels, meaning that higher costs for EV owners are here to stay. 

Rheinenergie, a municipal utility in Cologne, said in November that it would raise its prices to €0.55 per kWh in January. In October, EnBW, a Stuttgart-based regional power company, raised its prices for a kWh of electricity to €0.37, up 37% from the previous month. 

The most expensive way to charge an EV in Europe is on one of the fast-charging networks. Operators such as Tesla, Allego and Ionity have built roadside charging stations along major highways, where EV owners can drive up, plug in, and charge their batteries in as little as 15 minutes.

Fuel-economy estimates calculated by the EPA and current charging and gas prices in Europe show that some conventional vehicles are now cheaper to fuel with gasoline than equivalent electric models using fast-charging stations.

In the subcompact segment of the EPA’s 2023 Fuel Economy Guide, the Mini Cooper Hardtop was the most efficient model among EVs and gasoline-powered cars. 

A 100-mile ride cost the Mini EV owner €26.35 at the Allego fast-charging network, which charges €0.85 per kWh. The conventional Mini cost €20.35 to pump enough fuel to accomplish the same journey. 

Mini and its owner,

Bayerische Motoren Werke AG

, didn’t immediately respond to a request for comment. 

In the small two-door SUV category, the gasoline-powered Nissan Rogue handily beats the Hyundai Kona Electric, at a cost difference of €19.97 to €22.95. The Subaru Ascent standard SUV with four-wheel drive costs less to drive 100 miles than the Tesla Model X.

If an EV owner only charges their vehicle at home, they are generally still paying less for driving than conventional car users, although this gap has narrowed considerably. 

Analysts say about 80% of EV charging takes place at home or at work, so if an electric vehicle is only used close to home it generally remains the least expensive option. But once the vehicle is used for longer road trips, drivers are more likely to use fast-charging stations because other options would take too long to charge the battery.

Charging a Tesla on 120V AC power—the power that comes from a standard U.S. wall socket—would take days. In Europe, 230V is the AC standard, according to Germany’s ZVEI electronics-industry association. European chargers installed on street corners, at supermarkets, places of work and in home garages can charge a powered down Tesla battery overnight. 

The supercharger networks run on DC power, requiring at least 480 volts of power, and can charge up to around 200 miles of range within 15 minutes. 

Write to William Boston at william.boston@wsj.com

Corrections & Amplifications
Standard household power is 120 volts in the U.S. An earlier version of this article incorrectly said 120 volts is the standard in Europe. (Corrected on Dec. 25)

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World

Ukraine Races to Restore Electricity, Water Supplies After Russian Strikes

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Utility crews across Ukraine were working to restore water and electricity supplies after a barrage of Russian missiles a day earlier knocked out service to hundreds of thousands of people, while Russian authorities expanded the movement of civilians out of the southern Kherson region.

Kyiv Mayor

Vitali Klitschko

said the water supply in the city was fully restored and the electricity system had been repaired, but added that rolling blackouts would continue Tuesday. Ukrenergo, Ukraine’s electricity-transmission-system operator, said the supply of electricity would be limited in seven regions, including Kyiv and the northeastern Kharkiv region.

The restrictions “are necessary to reduce the load on the networks” after the recent attacks, Ukrenergo wrote on Telegram. “This enables energy companies to restore damaged energy facilities as quickly as possible, balance the system and provide consumers with energy.”

The missile assault on Monday was the latest Russian attack on Ukraine’s energy system, which has become the Kremlin’s foremost target over the past several weeks. More than a third of Ukraine’s power-generation capacity had already been destroyed before Monday’s attack. Though Ukrainian officials said 45 of the 55 missiles Moscow launched were shot down, the country’s energy system has continued to sustain damage, raising the specter of a winter in which much of the country might not have power, heat or running water.

“Stabilizing blackouts continue in nine regions of Ukraine. Energy workers and local authorities are doing everything to reduce the time of blackouts,” Ukrainian President

Volodymyr Zelensky

said in his nightly address on Tuesday.

“We will do everything to give people electricity and heat this winter. But we must understand that Russia will do everything to destroy the normality of life,’’ he said.

On Monday, Mr. Zelensky said Russian forces had lost 72,000 troops in Ukraine since February. In September, Moscow said that 5,937 of its soldiers had been killed in Ukraine.

“Russian terrorists do not have such missiles that could hit the Ukrainian desire to live,” Mr. Zelensky said. “There will be a response on the battlefield.”

Mr. Zelensky, in a meeting Tuesday with European Commissioner for Energy

Kadri Simson

in Ukraine, called on the Commission to play a coordinating role in attracting the assistance from EU member states needed to restore Ukraine’s energy infrastructure. Ms. Simson said on Twitter that Ukraine needs specific equipment and tools to repair the damage and that she assured Mr. Zelensky that “we are reaching out to partners to help with the dedicated support needed.”

Though attacks on Ukraine’s energy system have grown frequent in recent weeks, Russian President

Vladimir Putin

said that the assault on Monday was in response to a drone strike in Crimea on Saturday. Russia’s Defense Ministry has blamed that attack on Ukraine, with the help of the U.K. Russia has also suspended its participation in a United Nations-brokered deal to safely export grain from Ukraine in response.

Mr. Putin told Turkish President

Recep Tayyip Erdogan

in a call Tuesday that for Russia to cooperate with the grain deal again, it would need an investigation into the attack and guarantees from Kyiv that the grain corridor wouldn’t be used for military purposes, according to the Kremlin.

The U.N. has said Russian accusations that Ukraine has used the grain corridor for armed attacks are false, since no military vessels are allowed to approach the shipping lane, which is monitored by the U.N. and Turkey.

Ukraine hasn’t claimed credit for the attack, and the U.K. has denied involvement. Still, strikes deep inside Russian-held territory have become more common. On Monday afternoon, Ukraine’s defense intelligence agency wrote on Twitter that two Ka-52 helicopters had been destroyed and two others damaged at an airfield in Russia’s Pskov region, which is hundreds of miles north of Ukraine near Russia’s border with Estonia.

A school hit by a Russian missile in Mykolaiv, Ukraine.



Photo:

Carl Court/Getty Images

Moscow hasn’t commented on the alleged Pskov attack.

Russian Defense Minister

Sergei Shoigu

said Tuesday that Russia had sent 87,000 newly mobilized men to fight in Ukraine, up from the 82,000 figure he reported on Friday. In total, Moscow says it has mobilized 300,000 men, some of whom are currently in training.

Ms. Shoigu said some 3,000 instructors with combat experience in Ukraine were involved in training those mobilized.

“We continue to effectively hit military infrastructure facilities with precision-guided strikes, as well as facilities that reduce Ukraine’s military potential,” Mr. Shoigu said.

Many of the mobilized soldiers have been deployed to the Kherson region, according to residents and military analysts. Ukrainian forces have been closing in on the city of Kherson, the only regional capital that Moscow has seized this year. Supply lines into the city, which sits on the West bank of the Dnipro River, have been largely cut, and two weeks ago Russian-installed authorities in the region began moving civilians east across the river into territory that Moscow more firmly controls.

On Monday night, the Russian-installed head of the Kherson region, Volodymyr Saldo, announced an expansion of the evacuation, saying civilians within 15 kilometers of the Dnipro River would be moved still farther into Russian-held territory.

The evacuation was necessary, he said, because of a threat that the Ukrainians could blow up the Kakhovka dam and flood the region. Mr. Saldo had previously warned of a threat to the dam, and then played down the possibility of major damage and the risk of severe flooding.

Residents collect food aid in Mykolaiv region, Ukraine.



Photo:

Carl Court/Getty Images

A damaged apartment in Mykolaiv, Ukraine.



Photo:

hannibal hanschke/Shutterstock

“This decision will make it possible to create a layered defense that will make it possible to repel an attack by Ukrainian armed forces and protect our civilians,” he said. Civilians relocated deeper into Russian-held territory would receive a one-time payment of 100,000 rubles, equivalent to about $1,600, as well as a housing stipend, he added.

Military analysts have said it is unlikely that Ukraine would attack the dam, a move that would make reclaiming territory in the region more difficult.

The Institute for the Study of War, a Washington-based think tank, said Russian claims about the dam served several other purposes, including driving civilians away from territory that Ukraine might soon reclaim.

“[There] is no scenario in which it would be advantageous for Ukraine to blow the dam,” the institute wrote.

Darkened streets in Dnipro, Ukraine, during scheduled power outages.



Photo:

hannibal hanschke/Shutterstock

Write to Ian Lovett at ian.lovett@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com

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Business

Ray Dalio says watch out for rates reaching this level, because Wall Street stocks will take a 20% hit

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After that CPI shock earlier in the week, Wall Street is fielding a fresh batch of data on Thursday, with the headline retail sales number coming in stronger than expected. And a disastrous rail strike may be inverted.

But there’s no cheering up billionaire investor and hedge-fund manager Ray Dalio who in our call of the day asserts the Fed has no choice but to keep driving up interest rates, at a high price to stocks.

And he’s putting some fairly precise guesswork out there. “I estimate that a rise in rates from where they are to about 4.5% will produce about a 20% negative impact on equity prices,” Dalio said in a LinkedIn post dated Tuesday.

Some are forecasting the Fed could hike interest rates by 100 basis points next week, a move not seen since the likewise inflationary 80s. The central bank’s short-term rate hovers between 2.25% to 2.5%, but Nomura, for one, sees that rate headed to 4.75% by 2023.

But Dalio thinks interest rates could even reach the higher end of a 4.5%-to-6% range. “This will bring private sector credit growth down, which will bring private sector spending, and hence the economy down with it,” he says.

Behind this prediction is the Bridgewater Associates founder belief that the market is severely underestimating where inflation will end up — at 2.6% over the next 10 years versus what he sees as 4.5% to 5% in the medium term, barring shocks.

Read: Why a single U.S. inflation report roiled global financial markets — and what comes next

As for what happens when people start losing money in the markets — the so-called “wealth effect” — he expects less spending as they and their lenders grow more cautious.

“The upshot is that it looks likely to me that the inflation rate will stay significantly above what people and the Fed want it to be (while the year-over-year inflation rate will fall), that interest rates will go up, that other markets will go down, and that the economy will be weaker than expected, and that is without consideration given to the worsening trends in internal and external conflicts and their effects.”

The markets

Stock futures
ES00,
-0.25%

YM00,
+0.02%

NQ00,
-0.48%
are slightly lower post data, as Treasury yields
TMUBMUSD10Y,
3.437%

TMUBMUSD02Y,
3.852%
keep climbinging and the dollar
DXY,
-0.10%
firms up.

Oil prices
CL.1,
-1.63%
are lower, along with gold
GC00,
-0.83%.
China stocks
SHCOMP,
-1.16%

HSI,
+0.44%
slipped after the country’s central bank left rates unchanged. European natural-gas prices
GWM00,
+4.13%
are on the rise again. Bitcoin
BTCUSD,
+0.64%
is trading at just over $20,000.

The buzz

Shares of Union Pacific
UNP,
-3.69%,
Norfolk Southern 
NSC,
-2.16%
and CSX
CSX,
-1.05%
 are rallying in premarket after the White House said it has reached a tentative railway agreement with unions. No deal by Friday would mean strikes and havoc for supply chains, grain markets and even the coming holidays. Read more here.

August retail sales rose a stronger-than-expected 0.3% as Americans spent on new cars while weekly jobless claims came in lower for a fifth-straight week and import prices dropped 1%. Elsewhere, the Empire State manufacturing index perked up on the heels of a deep negative reading, but the Philly Fed factory index worsened. Industrial production and business inventories are still to come.

Adobe shares
ADBE,
+0.85%
are dropping after a report the software company is mulling a $20 billion deal to buy graphic design startup Figma .

Vitalik Buterin, one of the co-founders of Ethereum, says the so-called “merge” is done, meaning the birth of a more environmentally friendly crypto. Ethereum
ETHUSD,
-1.22%
is up just a little right now.

A new lawsuit claims Tesla
TSLA,
+3.59%
has made false promises over Autopilot and Full Self Driving features. And move over Tesla, Apple
AAPL,
+0.96%
is now Wall Street’s biggest short bet.

Ericsson
ERIC,
-3.32%

ERIC.A,
-1.78%

ERIC.B,
-3.34%
is dropping after a double downgrade at Credit Suisse, who cited inflationary headwinds. Analysts lifted Nokia
NOKIA,
-0.51%

NOK,
-0.40%
to outperform, though the stock is barely moving.

Cathie Wood’s Ark Investment Management went on a dip-buying spree after Tuesday’s market meltdown, scooping up chiefly Roku
ROKU,
+0.44%.

Opinion: Pinterest never considered itself a social network. Until now.

Patagonia billionaire Yvon Chouinard is donating his entire company — worth $3 billion — to the climate fight.

Best of the web

No U.S. shale rescue for Europe.

Turkey finds an extra $24.4 billion laying around.

Queue to pay respects to Queen is 2.6 miles long and counting.

The tickers

These were the top-searched tickers on MarketWatch as of 6 a.m. Eastern Time:

Ticker Security name
TSLA,
+3.59% 		Tesla
GME,
+1.01% 		GameStop
AMC,
+1.95% 		AMC Entertainment
BBBY,
+4.66% 		Bed Bath & Beyond
HKD,
+311.78% 		AMTD Digital
NIO,
-0.14% 		NIO
AAPL,
+0.96% 		Apple
APE,
+0.94% 		AMC Entertainment preferred shares
AMZN,
+1.36% 		Amazon
NVDA,
-0.02% 		Nvidia
Random reads

Scientists try to teach robots comedic timing

Sausage, mozzarella, batter. Meet South Korea’s hot dog.

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Business

CVS Is in Advanced Talks to Buy Signify Health for Around $8 Billion

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CVS Health Corp.

CVS -0.49%

is in advanced talks to acquire the home-healthcare company

Signify Health Inc.

SGFY 1.34%

for around $8 billion, according to people familiar with the matter.

CVS appears to have beat out other heavy hitters including

Amazon.com Inc.

and

UnitedHealth Group Inc.,

which had been circling Signify for a deal that could be announced soon. UnitedHealth never submitted an official bid, one of the people said.

There is still no guarantee that CVS will reach a deal for Signify, which has been exploring strategic alternatives since earlier this summer.

Bids for the company were due Sept. 6, but people familiar with the matter have said that an eager buyer could make a move before then.

Signify’s valuation has ballooned since The Wall Street Journal reported in August that it was for sale. Shares of the company closed at $28.77 on Friday, giving it a market capitalization of roughly $6.7 billion.

Signify works with a large group of doctors to facilitate house calls. It uses analytics and technology to help physician groups, health plans, employers and health systems with in-home care. It offers health evaluations for Medicare Advantage and other plans.

At the close of its deal this year to buy Caravan Health, Signify said that it supported roughly $10 billion in total medical spending.

The company went public in February 2021, raising more than $500 million as a result of the offering. On the day of its initial public offering, shares of the company priced above its expected range, at $24.

New York-based New Mountain Capital has backed Signify since 2017. The firm—which had more than $37 billion in assets under management as of early August—has steadily expanded Signify through a series of mergers and acquisitions since its initial investment.

New Mountain is well-versed in the healthcare sector. It previously sold the healthcare payments firm Equian LLC to UnitedHealth for roughly $3.2 billion in 2019.

For CVS, the deal builds on an effort years in the making to transform itself into a major provider of healthcare services through acquisitions and expanded medical services. The company had been struggling to counter slowing revenue from prescription drugs, which drive the bulk of its sales, and to ward off competition from

Amazon

AMZN -0.24%

for retail dollars.

CVS, the nation’s largest drugstore chain by stores and revenue, acquired Aetna in 2018, arguing that melding the insurance company’s patient data with its network of nearly 10,000 bricks-and-mortar sites would squeeze out costs while improving care and convenience.

The strategy has paid off, buoyed by a surge in demand for Covid-19 vaccines and tests at the height of the pandemic. CVS’s market capitalization has grown to more than $130 billion from around $75 billion since the Aetna deal.

The line between Amazon and Walmart is becoming increasingly blurred, as the two companies seek to maintain their slice of the estimated $5 trillion retail market while chipping away at each other’s share, often by borrowing ideas. Photos: Amazon/Walmart

The company is outperforming

Walgreens Boots Alliance Inc.,

which opted against major acquisitions, in the years since. Walgreens, also racing to expand into healthcare, focused largely on partnerships rather than deals. But last year it bought a controlling stake in the primary-care network Village MD, giving it doctors’ offices that CVS had said it could do without.

CVS Chief Executive

Karen Lynch

has since said that the company must have a foothold in primary care if it is to become a full-service medical provider.

CVS had previously been interested in a deal for the parent of One Medical, people familiar with the matter have said.

Amazon

AMZN -0.24%

agreed to purchase the primary-care clinic operator for about $3.9 billion in July.

The Federal Trade Commission is currently investigating the deal. The parent company of One Medical,

1Life Healthcare Inc.,

disclosed the investigation in a securities filing. The disclosure said One Medical and Amazon each received a request for additional information about the deal from the FTC.

While Wall Street has largely focused on CVS’s efforts to acquire primary-care practices, executives have also discussed ambitions to expand its in-home health presence.

A deal for Signify would represent a bright spot in an otherwise lackluster run for deals lately. Deal volumes globally are down roughly 30% this year after a flurry of activity last year, because of a drop in companies’ valuations, market volatility and other factors including Russia’s war in Ukraine.

Healthcare deal making in particular has slowed more than many other sectors. Over $200 billion of healthcare deals announced so far this year has compared with over $400 billion at this time last year, according to Dealogic. The largest healthcare deal to date this year in the U.S. is

Pfizer Inc.’s

$11.6 billion agreement in May to purchase the rest of

Biohaven Pharmaceutical Holding Co.

Write to Laura Cooper at laura.cooper@wsj.com, Sharon Terlep at sharon.terlep@wsj.com and Cara Lombardo at cara.lombardo@wsj.com

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Business

FTC Investigating Amazon Deal to Buy One Medical Network of Health Clinics

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WASHINGTON—The Federal Trade Commission is investigating

Amazon.com Inc.’s

AMZN -0.24%

$3.9 billion deal to buy

1Life Healthcare Inc.,

ONEM 0.35%

which operates One Medical primary care clinics in 25 U.S. markets.

1Life, which went public in 2020, disclosed the investigation in a securities filing. The disclosure says One Medical and

Amazon

AMZN -0.24%

each received a request on Friday for additional information about the deal from the FTC.

Amazon’s

AMZN -0.24%

bid for One Medical added momentum to the push by technology and retail giants to make inroads into the nation’s $4 trillion healthcare economy. The deal was the first major acquisition announced during the tenure of Chief Executive

Andy Jassy,

for whom expansion into healthcare is a priority.

The FTC’s move to investigate the deal could delay its completion as federal competition investigations often take months to finish. Significant U.S. antitrust probes on average take about 11 months, according to data compiled by law firm Dechert LLP.

FTC Chairwoman Lina Khan is a critic of Amazon, having written a 2017 law review article that argued Amazon’s conglomerate-like structure shouldn’t have escaped antitrust scrutiny. Ms. Khan said Amazon’s entry into businesses beyond its e-commerce platform allowed it to gather data it could use to undercut other companies.

The FTC is investigating Amazon’s Prime membership program, according to a legal petition Amazon filed last month. The company argued that FTC staff had made excessive demands on founder

Jeff Bezos

and other company executives and asked officials to quash the subpoenas.

An Amazon spokeswoman declined to comment.

Mr. Jassy is focused on healthcare as an industry in which Amazon could find significant growth opportunities. The company recently revealed that it plans to shut down a healthcare unit it launched in 2019 called Amazon Care after it announced the One Medical deal.

The transaction would give Amazon more than 180 clinics with employed physicians across roughly two dozen U.S. markets. One Medical Chief Executive

Amir Dan Rubin

is expected to remain as CEO once the deal closes.

The line between Amazon and Walmart is becoming increasingly blurred, as the two companies seek to maintain their slice of the estimated $5 trillion retail market while chipping away at the other’s share, often by borrowing the other’s ideas. Photos: Amazon/Walmart

As Amazon seeks to grow in healthcare, the company faces added challenges from competitors such as

UnitedHealth Group Inc.’s

Optum health-services arm and

CVS Health Corp.

, in addition to hospital systems.

In a memo to employees,

Neil Lindsay,

senior vice president of Amazon Health Services, said the healthcare industry continues to be an important arena for innovation.

“As we take our learnings from Amazon Care, we will continue to invent, learn from our customers and industry partners, and hold ourselves to the highest standards as we further help reimagine the future of health care,” Mr. Lindsay wrote.

Write to Dave Michaels at dave.michaels@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the September 3, 2022, print edition as ‘FTC Probes Amazon Deal for One Medical.’

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World

Ukraine Presses U.N. Over ‘Nuclear Blackmail’ at Russian-Occupied Plant

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ODESSA, Ukraine—Ukrainian President

Volodymyr Zelensky

met with the leaders of Turkey and the United Nations on Thursday to discuss food shipments from Ukraine and the increasingly tense situation at the Zaporizhzhia nuclear plant, as Ukraine continued to hit Russian logistics with artillery strikes.

Following the meetings in the western Ukrainian city of Lviv, Mr. Zelensky said he pressed U.N. Secretary-General

António Guterres

about the nuclear plant, which Russia has occupied since the early days of the war. Explosions around the plant in recent days have knocked one reactor off the power grid and sparked fears of a nuclear catastrophe.

“Particular attention was paid to the topic of Russia’s nuclear blackmail at the Zaporizhzhia NPP,” Mr. Zelensky wrote on social media. He said the two men also discussed allegations that Ukrainian citizens were being forcibly deported to Russia and the treatment of captured Ukrainian soldiers.

Russia has said Ukrainian forces threaten the nuclear plant’s security.

After meeting with Turkish President

Recep Tayyip Erdogan,

Mr. Zelensky said they had discussed ways to protect Ukrainian grain that is being exported, as well as other security issues. Ankara helped broker with the U.N. a deal to lift a Russian naval blockade on Ukrainian exports, which had led to food shortages throughout the Middle East and Africa.

“This is a strong message of support from such a powerful country as Turkey,” Mr. Zelensky wrote on Telegram.

The Turkish president has sought to position himself as a mediator in the war, with Turkey hosting two rounds of unsuccessful peace talks between Ukraine and Russia. Mr. Erdogan has said he hopes the U.N.-backed initiative that led to the resumption of Ukraine’s Black Sea grain exports earlier this month could be a starting point for a broader peace between Russia and Ukraine.

At a news conference following the talks, he said he had “reiterated our support for the sovereignty and territorial integrity of Ukraine.” He added: “I have been preserving my belief that the war would come to an end at the negotiation table.”

Ukraine has exported 622,000 tons of grain and other food products from the three ports covered by the export agreement, the Turkish defense ministry said Thursday.

During the news conference, Mr. Guterres said “there is no solution to the global food crisis without insuring full global access to Ukraine’s food products and Russian food and fertilizer.” Global wheat prices, he said, have fallen up to 8% since the accord was signed.

Turkish military officers are helping to monitor implementation of the agreement alongside their Ukrainian and Russian counterparts and U.N. officials stationed at a control center that was set up in Istanbul in July. Four more ships loaded with agricultural products sailed from Ukrainian ports on Wednesday under the deal, according to Turkish officials.

Mr. Erdogan is increasingly posing as a friend to both sides in the Ukraine conflict. Turkey has delivered weapons to Ukraine, including armed drones that have been instrumental in Ukraine’s battle against the Russian invasion. In February, Turkey also invoked its rights under an international treaty to bar additional Russian warships from the Black Sea.

The leaders of the United Nations and Turkey met with Ukrainian President Volodymyr Zelensky in western Ukraine on Thursday. The group discussed food shipments and rising tensions at the Zaporizhzhia nuclear plant. Photo: Handout/AFP/Getty Images

His visit to Ukraine comes less than two weeks after a visit to Russia where he held talks on the Ukraine war and the grain initiative with Russia’s President

Vladimir Putin.

“This will be another opportunity for Mr. Erdogan to be active in this mediation process,” said

Aydin Sezer,

a former diplomat who served in Turkey’s embassy in Moscow. “Erdogan is now the only person who is credited by the Kremlin when it comes to Ukrainian business.”

Turkish and Ukrainian officials also signed a memorandum of understanding calling for Turkey to participate in Ukraine’s postwar reconstruction. The first project being considered under the agreement is the reconstruction of a bridge connecting Kyiv with the towns of Irpin and Bucha, where Russian soldiers carried out mass killings in March, the Ukrainian presidency said.

“Turkey is our strategic ally. We are grateful to our Turkish partners for their willingness to cooperate in the recovery of the infrastructure destroyed by Russia,” said Ukraine’s Infrastructure Minister

Oleksandr Kubrakov

according to the Ukrainian president’s office.

Earlier on Thursday, the Ukrainian military’s Southern Command said that it had struck an ammunition depot in the village of Bilohirka, near the front line of fighting in the Kherson region. The rocket strike is the latest in a series of attacks that have targeted logistics in the Russian-occupied south—part of a strategy to starve Russian troops in the region of supplies and force them to withdraw from the territory they are holding west of the Dnipro River.

Unidentified civilians exhumed from a mass grave after Russia’s occupation of Bucha, near Kyiv, were reburied Wednesday.



Photo:

Evgeniy Maloletka/Associated Press

Emergency workers preparing for a potential nuclear disaster in Zaporizhzhia took part in a presentation watched by Ukrainian officials.



Photo:

Justyna Mielnikiewicz/MAPS for The Wall Street Journal

A day earlier, the Ukrainian military posted video to social media that appeared to show the aftermath of a long-range rocket strike on Nova Kakhovka, also in the Kherson region. And on Tuesday, pro-Ukrainian saboteurs destroyed an ammunition depot in Crimea, which Russia seized in 2014. Video on social media Thursday also showed large explosions overnight in Russian-occupied Amvrosiivka, in the eastern Donetsk region; Ukrainian officials didn’t immediately comment on the cause.

As Ukrainian strikes inside Russian-held territory increase, Russian forces are attempting to crack down on pro-Ukrainian insurgents. A Ukrainian army veteran was arrested in the Kherson region on suspicion of sending locations of Russian troops and bases to Ukrainian forces, Russian state-run news agencies reported on Thursday. In addition, Russia’s FSB intelligence agency on Wednesday said it had detained six Russian citizens in Crimea who belonged to a cell that spread what it called terrorist ideology with the support of Ukrainian emissaries, according to Russian state news agency RIA Novosti.

Russia has said it would give International Atomic Energy Agency inspectors access to the Zaporizhzhia nuclear plant—but only if they come via Russian-controlled territory and not through Kyiv, a plan that Ukraine opposes.

The Russian Defense Ministry on Thursday said Ukraine was planning a false flag provocation for Friday at the plant to frame the occupying forces. Maj. Gen.

Igor Konashenkov,

a Russian Defense Ministry spokesman, didn’t provide evidence to support the claim. The Russian-installed head of the occupied territories of Zaporizhzhia, meanwhile, said a plan was in place to evacuate residents in case of an attack on the plant. Kyiv didn’t immediately respond to the claim.


Russia’s Defense Ministry also said Thursday that Moscow would consider shutting down the plant if the situation surrounding the facility continues to deteriorate.

The Ukrainian government, international nuclear-power watchdogs and the plant’s staff have accused Russia of stealing Zaporizhzhia’s power by severing its connection to Ukraine’s remaining territory.

In Kharkiv, in northeastern Ukraine, a Russian missile hit a residential building in the Saltivka neighborhood on Wednesday night, killing seven people and injuring at least 17 more, according to the city’s mayor. More missiles launched from Russia hit the city early Thursday morning, killing two more people. Russia’s Defense Ministry said its forces were targeting foreign fighters.

Russia’s Defense Ministry said Thursday it has deployed three MiG-31 combat jets armed with hypersonic Kinzhal ballistic missiles to the Russian exclave of Kaliningrad, a chunk of Russia wedged between North Atlantic Treaty Organization members Lithuania and Poland, according to Russian state news agencies. Such missiles, when fired from jets, have farther reach than the ground-launched missiles already deployed in Kaliningrad.

—Nikita Nikolaienko contributed to this article.

Ukrainian fighters took part in a military drill on the country’s south coast.



Photo:

oleksandr gimanov/Agence France-Presse/Getty Images

Write to Ian Lovett at ian.lovett@wsj.com, Jared Malsin at jared.malsin@wsj.com and Evan Gershkovich at evan.gershkovich@wsj.com

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World

Inside the Russian-Occupied Ukrainian City Living Under Threat of Nuclear Disaster

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In the Russian-occupied Ukrainian city that hosts Europe’s largest nuclear-power plant, residents are taping up windows in fear of a radioactive leak and sticking close to home as fighting rages around the complex and Moscow-installed authorities gear up for a possible annexation of the region by Russia.

Residents in Enerhodar, a city that has been under Russian occupation for more than five months, paint a picture of a pitched battle on the front lines in Ukraine’s south that risks sparking Europe’s biggest nuclear disaster since Chernobyl in 1986.

Enerhodar has become the focus of an international crisis as Russia and Ukraine trade blame for attacks on the city’s sprawling Zaporizhzhia nuclear plant. The plant is being defended by hundreds of Russian soldiers—effectively transforming it into a military garrison—who are facing off against Ukrainian soldiers stationed just a few miles away.

There has been no reported damage to the reactors and no radioactive release so far, but Ukraine said plant staff had to close one of six reactors over the weekend after a high-voltage power line was severed and three radiation monitors damaged.

The Zaporizhzhia nuclear-power plant is being defended by hundreds of Russian soldiers.



Photo:

ALEXANDER ERMOCHENKO/REUTERS

“God forbid something irreversible happens,” Ukrainian President

Volodymyr Zelensky

said in a video address Sunday. “No one will stop the wind that will spread radioactive pollution.”

The city, with a prewar population of 53,000 and whose name means “the giver of energy,” has been running out of food supplies and begun circulating the Russian ruble as reserves of Ukraine’s hryvnia currency run out, residents say.

Andriy, a former car salesman and a 36-year-old resident of Enerhodar, said that occupying authorities told residents the area around the plant is mined and that unexploded ordnance from cluster munitions litters the city.

“They told us that the Ukrainians were shelling the plant and that it was necessary to seal window frames with Scotch tape so that if they hit the warehouse of radioactive waste, the dust would not enter our homes,” he said by phone. “They say that the first day will be the most dangerous, so you have to stay at home and not go out. Everyone is afraid that something will happen to the plant.”

Occupation authorities in Enerhodar have begun circulating the Russian ruble as reserves of Ukraine’s hryvnia currency run out.



Photo:

ALEXANDER ERMOCHENKO/REUTERS

Andriy said Russian forces positioned beside the plant are firing artillery from the city at Ukrainian forces positioned across the Dnipro River near Nikopol. At night he sees what look like tracer bullets in the sky as the Russians fire antiaircraft guns from the territory of the station.

Communications with Enerhodar residents are steadily worsening as the occupying authorities tighten their control and fear spreads among locals. Many people worry that their phones have been tapped. Russia is also gradually disconnecting Ukrainian telecom providers and attempting to roll out Russian cell service. Sim cards from major Ukrainian providers no longer work properly.

“People are afraid,” said the Ukrainian mayor of Enerhodar,

Dmytro Orlov,

who fled after the occupation. “Workers of Europe’s largest nuclear power plant go to work not knowing if they’ll return home after their shift, or whether everything is fine with their loved ones while they’re away.”

One Enerhodar woman in her early 60s said shelling of the city has become much more frequent in recent days, adding that she has seen trucks and armored personnel carriers driving regularly toward the plant complex. The woman said residents are trying to go about their daily lives, buying produce from local markets because supermarket prices have become too high, and increasingly paying in Russian rubles circulated by occupation authorities as supplies of Ukraine’s hryvnia run out.

Himars—long-range rocket launchers from the U.S.—have helped Ukraine target Russian ammunition stores, command posts and fuel depots, slowing down Moscow’s forces. As Washington sends more weapons, WSJ looks at why Kyiv is asking for other advanced tools. Photo composite: Eve Hartley

People fear speaking in public, she said, afraid that a passerby could inform on them to the occupation authorities. The woman said her son, a city council member before the war, is now in hiding after having failed to escape to Ukrainian-controlled territory. He was sleeping in friends’ garages and basements, escaping both the Russian-installed government and the constant shelling.

“Most people keep their opinions to themselves because you can’t know what your interlocutor might do,” said Yury, a local resident. He added that many Russian-installed officials and security service members now appear in civilian clothing, making residents even more afraid of inadvertently saying something that could be used against them.

“Sometimes people you know disappear,” the woman said. “We think they probably said something wrong.” Mr. Orlov, the mayor, said several hundred residents of the city have been abducted and are being held in Russian custody, and months have passed in some cases with no information about their whereabouts. The Kremlin didn’t immediately respond to a request for comment.

When Russia took control of Enerhodar in early March, residents like Andriy and Yury came out to stage protest rallies and shout “Ukraine!” and “Go home!” at the occupying troops. The last protest, on April 2, was violently dispersed by Russian troops and outward signs of dissent quickly disappeared as Russia installed a collaborationist administration in the city and clamped down, residents say.

The Russian-installed head of the surrounding Zaporizhzhia region, Evgeny Balitsky, on Monday announced a coming referendum on whether the region should join Russia. Andriy, the local resident, said police are checking courtyards and building entrances for posters and leaflets against the referendum and searching for anyone who distributes them.

The woman in her 60s said fear is rising that battles raging in the area could cause damage that would leak radioactive chemicals.

“It’s scary to live near the plant,” she said. “Some fear that storage facilities have already been destroyed and are emitting radiation, and we just don’t know about it. People are afraid that if it explodes, we will all die here.”

She said most residents still hold out hope that Ukraine, which has announced a major counteroffensive on southern areas taken by Russia, will liberate Enerhodar too. But the occupation is becoming entrenched.

“It feels like most people are on Ukraine’s side,” she said. “But they are getting tired of waiting.”

A serviceman with a Russian flag on his uniform standing guard near the nuclear-power plant in early August.



Photo:

ALEXANDER ERMOCHENKO/REUTERS

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World

Biden Invokes Emergency Power in Bid to Resolve Solar Import Dispute

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President Biden used emergency authority Monday in a bid to resolve a supply logjam that threatened the solar power industry, but the action drew complaints from U.S. manufacturers who say it will impede their efforts to build domestic production.

The four Southeast Asian countries account for roughly 80% of U.S. solar panel imports. The Commerce investigation had led importers to halt shipments, putting in jeopardy more than half of the 27 gigawatts of new solar-power capacity developers had been expected to install this year, according to the energy consulting firm Rystad Energy.

The White House acted as part of a larger package intended to resolve a conflict pitting solar power developers and utilities that rely on cheap imported components against manufacturers who want to reshore solar parts manufacturing to the U.S.

Mr. Biden invoked the Defense Production Act among other measures to help U.S. suppliers compete with Asian rivals and spur more U.S. manufacturing long-term.

The developers and utilities who import solar panels cheered the decision as a way to avoid a slowdown in new installations. But advocates for U.S. manufacturers said it undermines efforts to help U.S. companies catch up to Chinese rivals that dominate the industry.

“President Biden is significantly interfering in Commerce’s quasi-judicial process,” said Mamun Rashid, chief executive of California-based Auxin Solar Inc., a small maker of solar panels whose complaint triggered the Commerce investigation.

“By taking this unprecedented—and potentially illegal—action, he has opened the door wide for Chinese-funded special interests to defeat the fair application of U.S. trade law,” Mr. Rashid said in a  statement.

A solar panel in production at the San Jose, Calif., factory of Auxin Solar.



Photo:

Ian Bates for Wall Street Journal

Some trade lawyers and analysts question whether Mr. Biden has overstepped authority meant for use in wartime.

“It is highly problematic that the Administration is apparently declaring a war or similar national emergency as the basis for negating a continuing trade law investigation on solar,” said

Timothy Brightbill,

a trade lawyer at Wiley Rein LLP. “This emergency authority is used extremely rarely and it’s a dangerous precedent to use it to negate a continuing trade investigation.”

Mr. Biden cited disruptions in global energy markets caused by Russia’s invasion of Ukraine—along with extreme weather events exacerbated by climate change—as justification for his emergency declaration.

When asked about challenges to the decision’s legality, a senior administration official said the president is acting under his emergency authority under the Tariff Act of 1930 to waive import duties. The changes will not interfere in the Commerce investigation, the official said.

Administration officials said the plan creates a bridge period to keep developers supplied for now while U.S. panel-makers build up their limited capacity.

“The Federal Government is working with the private sector to promote the expansion of domestic solar manufacturing capacity, including our capacity to manufacture modules and other inputs in the solar supply chain, but building that capacity will take time,” Mr. Biden said in his declaration.

Solar developers and installers, who vastly outnumber manufacturers in the U.S. and have lobbied for protection, said the decisions could jump-start projects that have been delayed.

Executives at SOLV Energy LLC, the biggest installer of large-scale solar farms in the U.S., are now reconsidering decisions on nearly a dozen projects that were halted or delayed by fallout from the Commerce probe and would have eliminated or postponed thousands of new jobs, said George Hershman, the company’s chief executive.

“We’re starting to work with our customers and determine which projects we can restart and how quickly we can restart them,” he said.

Companies that build or support solar projects such as

Sunrun Inc.,

SunPower Corp.

and

Enphase Energy Inc.

all posted gains Monday, with

Sunnova Energy International Inc.

NOVA 6.45%

leading the group, up nearly 6.5%.

Shares of

NextEra Energy Inc.,

a utility and one of the world’s largest renewables companies, added almost 2%. Monday’s advance pares some of the sector’s recent losses.

“A big part of the tariff uncertainty and a lot of the other supply chain disruption just creates uncertainty,” said

Rebecca Kujawa,

president and CEO of NextEra Energy Resources, the company’s competitive power business. “To remove this as a point of concern, at least for a period of time, is going to be hugely helpful.”

Money is a sticking point in climate-change negotiations around the world. As economists warn that limiting global warming to 1.5 degrees Celsius will cost many more trillions than anticipated, WSJ looks at how the funds could be spent, and who would pay. Illustration: Preston Jessee/WSJ

But

First Solar Inc.,

a U.S. manufacturer based in Tempe, Az. said the administration’s actions “only benefits China’s state-subsidized solar industry.”

“The use of the Defense Production Act to boost solar manufacturing is an ineffective use of taxpayer dollars and falls well short of a durable solar industrial policy,” the company said in a statement. “Quite simply, the administration cannot stick a Band-Aid on the issue and hope that it goes away.”

First Solar manufactures solar panels using a different technology that is not affected by industry tariffs.

Washington has been central in the solar dispute in part because Mr. Biden has promised that addressing climate change with support for clean energy would grow working-class jobs in solar, wind, battery and other manufacturing businesses. In recent months a fight over tariffs has illustrated how those goals can clash rather than complement one another.

The White House has tried to help build up a U.S. supply chain by maintaining Trump-era solar tariffs on China and Taiwan. Utilities and developers—fearful the reach of those tariffs was expanding to other Asian partners—warned that threat was causing what could become a drastic slowdown in solar growth.

In Monday’s declaration, Mr. Biden accepted those industry claims that a slowdown was caused in part by import bottlenecks, and that ultimately it was threatening the reliability of the country’s electricity supply.

“The United States has been unable to import solar modules in sufficient quantities to ensure solar capacity additions necessary to achieve our climate and clean energy goals, ensure electricity grid resource adequacy, and help combat rising energy prices,” Mr. Biden said in the declaration.

Abigail Ross Hopper,

president and chief executive officer of the Solar Energy Industries Association, applauded the decision.

“While the Department of Commerce investigation will continue as required by statute, and we remain confident that a review of the facts will result in a negative determination, the president’s action is a much-needed reprieve from this industry-crushing probe,” she said in a statement.

—Anthony DeBarros and Katherine Blunt contributed to this article.

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US

Why Your Electric Bill Is Soaring—and Likely to Go Higher

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U.S. electricity customers are facing some of the largest bills in years because of volatile natural-gas prices, which are being driven higher by winter demand and a global supply shortage being made worse by Russia’s war against Ukraine.

Already, the natural-gas supply crunch has made it substantially more expensive for utilities to purchase or produce electricity. As a result, some customers have seen winter power bills increase by 20% or more compared with the year before, in addition to seeing higher home-heating bills.

Now, with sanctions against Russia threatening to further constrain global natural-gas supplies, higher prices are likely to persist, executives and analysts say, especially in regions heavily reliant on the fuel for power generation.

Domestic natural-gas prices reached the highest levels in years ahead of winter as exporters shipped record amounts of it overseas, and prices have lately risen again on fears of another global shortage.

“It will have an impact on customers’ bills,” said

Nick Akins,

chief executive of

American Electric Power Co.

AEP -0.58%

, a utility company that serves more than five million customers in 11 states.

U.S. Henry Hub gas prices on Friday reached about $4.73 per million British thermal units. That is up from about $2.66 per million British thermal units a year ago.

Utilities across the country recover gas and electricity supply costs by charging them to customers, driving prices sharply higher this winter after a year of steady increases. Average retail electricity prices for residential customers rose 4.3% last year to 13.72 cents per kilowatt-hour, the largest annual increase since 2008, according to the Energy Information Administration. The increase, which generally matched inflation overall, was spurred in part by the cost of natural gas delivered to power plants, which more than doubled from 2020.

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Utilities must receive regulatory approval to raise rates, but it is generally standard practice for regulators to allow for them to recoup higher fuel and supply costs through customers.

The recent surge in electricity prices has been especially acute in New York.

Consolidated Edison Inc.,

ED 0.20%

which provides electricity to about 3.3 million customers in the New York City region, said city residents using about 300 kilowatt-hours a month saw their January bills increase by roughly 23%. Most of that increase resulted from higher supply costs.

ConEd said it is working to hedge against price volatility and adjusting its billing processes to benefit customers.

Hector Ruiz, 44 years old, a fiber-optic engineer who has lived in his house in Clifton Springs in upstate New York for the past eight years, said he had never paid more than about $500 a month for gas and electricity. His bill last month was just shy of $1,000, he said, scrambling the budget for his family of four and prompting him to tap into funds set aside for other purposes.

Hector Ruiz said his latest bill for gas and electricity was just under $1,000, which is double what he was paying.



Photo:

Malik Rainey for The Wall Street Journal

“My utility bill literally doubled overnight,” Mr. Ruiz said. “Has it been a punch to the gut? Yes.”

Gabriel Thompson, 40, a photographer who lives with his wife in Westchester County just north of New York City, saw his electricity bill rise sharply alongside his gas bill in January. His cost of electricity supply reached 18 cents a kilowatt-hour that month, up from about 6 cents a kilowatt-hour the prior month. Including delivery charges, he paid more than $200 for electricity and about $585 for natural gas.

“It makes me glad I don’t have an electric car, which I’d love to have,” Mr. Thompson said. “People don’t have infinitely expendable income.”

The increases come amid broader concerns about high inflation. The consumer-price index surged 7.9% in February, the highest rate in 40 years.

Gabriel Thompson says higher utility costs make him glad he doesn’t have an electric car.



Photo:

Clark Hodgin for The Wall Street Journal

Eversource Energy,

ES -0.53%

a utility that serves 3.6 million electric and natural-gas customers in Connecticut, Massachusetts and New Hampshire, raised electricity rates at the start of January to account for higher wholesale prices. The company said an average residential customer could see bills increase by as much as 25% through the end of June.

James Daly,

Eversource’s vice president of energy supply, said regional pipeline constraints exacerbated a gas-supply shortage resulting from higher seasonal demand and relatively flat domestic production. The company also saw a surge in prices for liquefied natural gas as exporters shipped more of it abroad, though it doesn’t rely heavily on that type of fuel.

“We can see prices run up faster than in other parts of the country if there’s a supply-demand imbalance,” Mr. Daly said.

Commodity prices are hot right now. But the prices investors are paying in the open market for commodities like coffee, copper or corn can have little to do with the price customers pay at the store. WSJ’s Dion Rabouin explains. Illustration: Adele Morgan

In California, wholesale power prices have risen as the state’s largest utilities plan to invest billions of dollars to reduce the risk of their power lines igniting wildfires. San Diego Gas & Electric, a unit of

Sempra

that serves about 1.5 million electric customers and 900,000 natural-gas customers, raised rates at the start of the year to account for higher supply costs. Average residential bills increased by 11.4%.

Guggenheim analyst Shahriar Pourreza said utilities have long counted on low gas prices to keep supply costs down, giving them greater leeway to invest in their systems without major rate increases. Now, with gas prices likely to remain elevated, companies will face more pressure from regulators to keep spending in check and consumers’ bills lower, Mr. Pourreza said.

“You haven’t seen the same level of inflation in utility bills like you’ve seen in other industries and other products,” he said. “It’s been a subsidy for them, and that subsidy is likely going away.”

The recent surge in electricity prices has been especially acute in New York. A street in Mount Vernon.



Photo:

Clark Hodgin for The Wall Street Journal

Write to Katherine Blunt at Katherine.Blunt@wsj.com

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