Energy price pass-through with long-term contracts
Abstract
We study the pass-through of wholesale natural gas prices into 12-month fixed-rate residential contracts in Georgia’s deregulated natural gas market. Our theoretical model suggests that socially optimal contracts should uniformly pass through future wholesale fuel costs during the contract period. We find that total pass-through is close to complete, but almost entirely driven by contemporaneous and lagged wholesale prices. Future price pass-through is limited and sometimes negative, deviating from the theoretical socially optimal benchmark.
Fields of Study & Subjects
Global Energy Security and Policy
Electric Power System Optimization
Climate Change Policy and Economics
Publication details
- Journal / source
- Economics Letters
- Volume
- 260
- Pages
- 112800–112800
- Publication date
- 2 January 2026
- Language
- EN