Utility places blame on weather and market conditions
Have you been shocked recently when you opened your latest gas bill? If so, you’re not alone. Area residents have reported increases from 100% to 200%, and rumblings/grumblings “on the street” have echoed the pocketbook pain.
Southern California Gas Co. (SoCalGas), the nation’s largest natural-gas-distribution utility, readily acknowledges the situation:
“There’s no easy way to put this. . . January bills are likely to be shockingly high. An unprecedented cold snap across the nation, in part, has caused natural-gas market prices in the West to more than double between December and January—to the tune of 128% since December. As a result, our customers can expect to see higher gas bills in the coming weeks.”
Expanding on this candid admission, SoCalGas said: “If your residential peak winter bill was around $65 last winter, you can expect to see bills closer to $160 this year. Similarly, if it was around $130 last winter, [you] can expect bills around $315 this year. These increases are due primarily to increases in the price of gas.”
Aiming to strike a sympathetic chord, the utility continued, “While we don’t set these prices, . . .we want our customers to know that we understand that this may be a shock and a hardship for some.”
Aiming for as much transparency as possible, SoCalGas enumerated a handful of root causes:
Widespread, below-normal temperatures on much of the West Coast, including Washington and Oregon.
High natural-gas demand for heating by customers in areas with below normal temperatures.
Reduced natural-gas supplies to the West Coast from Canada and the Rocky Mountains.
Reduced interstate pipeline capacity to the West Coast because of pipeline-maintenance activities in West Texas.
Low natural-gas storage levels on the West Coast.
SoCalGas emphasized that “the price of natural gas is determined by regional and national markets and passed on directly to our customers. We don’t set the cost of natural gas and don’t earn additional profits from higher supply prices.”
The utility reported, too, that “new gas transportation rates, approved by the California Public Utilities Commission, went into effect on January 1. Residential average transportation rates increased by about 8% and small business transportation rate increased by about 5% on average. These transportation rate changes will allow us to continue upgrading our infrastructure, retain responsible, well-trained employees, and support the growth of diverse energy options.”
According to Michael Williamson with the consulting firm Williamson Energy: “I’ve seen prices spike before, but over a short period of time. This sustained period of high prices has never happened before. There’s a lot of different things going on, and they’re all falling at the same time.”
Significantly, conditions in the eastern United States and Europe are dramatically different, with natural-gas prices falling.
HOW IS THE UTILITY HELPING?
SoCalGas recently announced a $1 million contribution to the Gas Assistance Fund—a program that helps income-qualified customers pay their natural-gas bills. The program also opened early this year, in January instead of February. Customers experiencing bill-related hardship should call (800) 427-2200.
For residential customers, SoCalGas is proactively delaying collections activities on overdue accounts until April 1, 2023, and won’t disconnect overdue customers during the first half of the year. The utility is also helping customers manage costs through conservation and programs like the Level Pay Plan, which averages their annual natural-gas use and costs over 12 months. Customers then pay an average monthly amount instead of actual charges.
SoCalGas encourages customers to sign up for weekly alerts (www.socalgas.com/pay-bill/my-account). This resource enables customers to monitor their natural-gas consumption, take steps to reduce usage and avoid bill surprises. Sent through email or via text, alerts include a bill-to-date and projected next bill amount intended to make managing energy bills much easier. Such assistance could hardly be more timely.