SoCalGas warns your natural gas bills will be ‘shockingly high’ in the region – Press Telegram

Southern California residents get ready for a serious case of sticker shock as your natural gas bills in the region more than double this winter, according to the region’s two major utilities.

Southern California Gas Company — a subsidiary of Sempra Energy that serves more than 21.8 million customers in Central and Southern California — along with the city’s independent gas provider, Long Beach Utilities, recently warned customers to brace for imminent increases in gas bills this month.

“There’s no easy way to put it: January bills are likely to be shockingly high,” SoCalGas said in a statement Thursday, Dec. 29. “As a result, our customers can expect to see higher gas bills in the coming weeks.”

Long Beach Utilities issued a similar statement on Wednesday, January 4.

Then on Jan. 6, SoCalGas announced a $1 million contribution to the Gas Assistance Fund to help low-income customers pay off their natural gas bills. “We know these higher prices are having a real impact on our customers,” said Gillian Wright, the utility’s senior vice president and chief customer officer.

SoCalGas rates are expected to more than double from last winter. If a customer’s natural gas bill was $130 last winter, for example, that family can expect a bill of $315 this winter, according to the gas company. And the average Long Beach single-family residential customer should brace for an increase of $200 or more in their bill, the city’s utility said.

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“Faced with the highest natural gas prices in Long Beach history, Long Beach Utilities has taken swift action to minimize the impact on customers,” he said. “These measures will save customers $10 million and result in approximately 4 percent less revenue than SoCalGas on average.”

While gas bills have increased slightly in the winter as more gas is used to combat the cold weather, both companies attributed the rate increase to corresponding increases in the market price of natural gas — which, for interrelated reasons, including the California drought, has risen nationwide. Unprecedented severe cold and Russia’s war in Ukraine have increased nearly 128% since November.

Long Beach Utilities CEO Chris Garner said in an announcement, “Our customers are shocked by these sudden high market rates in Southern California.” “While there are legitimate market forces driving up costs, that doesn’t ease the financial impact on our residents who use natural gas to heat their homes, cook their meals and heat their showers.”

Starting in late November, below-normal temperatures from Western Canada to California have fueled demand for natural gas. Natural gas consumption in both the residential and consumer sectors in California and the Pacific Northwest rose 23% in the first three weeks of December, according to the US Energy Information Administration.

To make matters worse, natural gas supplies have not kept up with growing demand, and US natural gas exports to Europe have increased significantly, making availability even more difficult.

“Europe is very dependent on Russian gas for its energy needs — especially for heating in the winter,” Brian Peck, director of the University of Southern California’s Center for Transnational Law and Business, said in an interview Thursday, Jan. 5. “And so, as part of the US effort to secure Western support for Ukraine, they asked Europe to break its dependence on Russian gas.”

Earlier this year, President Joe Biden signed an agreement with the European Union to increase American liquefied natural gas exports to Europe by 15 billion cubic meters. The deal comes after both the US and Britain imposed embargoes on Russian oil and pressured the EU to join efforts to cut Russia’s main source of income.

But for the EU, which buys more than 40% of its LPG from Russia, an outright ban on the fuel would not be possible without major economic consequences for its residents. Peck said Biden’s deal to expand gas supplies to the EU is intended to help countries stop stockpiling Russian natural gas over the next five years.

“The United States has committed to supporting LNG exports to help Europe become self-sustaining and less dependent on Russian oil, which would reduce gas revenues for the Russian regime,” Peck said. “(It also) helps to insulate Europe from Russian gas restrictions until Europe stops gas supplies.”

International relations are not the only factor stressing natural gas supply in Southern California. Along with the new year, the state marked an even more dire milestone: the fourth year of severe drought.

While recent storms have brought much-needed water to the state’s reservoirs, the situation remains dire — the Metropolitan Water District Board recently declared a regional drought emergency and asked its 26 member water agencies to consider implementing mandatory water conservation measures in early December.

Although most of California’s electricity is still powered by natural gas, about 10.2% of all California electricity is generated by hydropower, according to the state’s Energy Commission. Dwindling water supplies have forced the state to rely more on natural gas for electricity generation in recent years.

“We’ve seen a lot of reservoirs and dams that generate hydroelectricity struggle because of the drought,” Long Beach Utilities spokeswoman Lauren Gold Howland said Thursday. “That’s why more natural gas was used to generate electricity.”

And because 90% of California’s natural gas supply is imported — mostly from West Texas, the Rocky Mountains and the Four Corners — the state relies heavily on the health of interstate pipelines to get its share of supplies.

Gold Howland said Long Beach is somewhat out of the loop with a few local natural gas suppliers, but those sources make up only a fraction of what is needed to serve the entire city.

Capacity along this important interstate pipeline has suffered in recent months as wholesale suppliers in West Texas, one of California’s main importers, have dealt with a series of maintenance issues, according to the US Energy Information Administration (EIA).

Last June, a fire at Freeport LNG, one of Texas’ main liquefied natural gas export terminals, shut down the facility. Officials there scheduled a full reopening several times and then pushed back. The company most recently estimated it would resume operations in March 2023.

Several other pipelines were shut down to undergo maintenance for normal wear and tear, according to Gold Howland.

“It makes a big difference in how much gas can come into the state,” he said.

Natural gas storage capacity in California’s underground reservoirs (three of which are in the Los Angeles area) has also declined significantly in recent years.

This is partly due to the consequences of the massive natural gas leak at the Aliso Canyon reservoir in 2015, the largest natural gas leak in US history.

The Aliso Canyon facility was completely shut down in 2015 after an incident that released nearly 100,000 tons of methane and other chemicals into the air and resulted in hundreds of lawsuits that resulted in a $1.8 billion settlement in 2021. SoCalGas and Sempra Energy have agreed to settle the claims. More than 35,000 victims.

Two years later, the California Public Utilities Commission and Department of Conservation reopened the facility at a greatly reduced capacity.

“The issue still has some kind of residual effect from the leaks that happened a few years ago,” Gold Howland said. “It’s done a lot of damage to the storage areas — and they’re basically trying to recover.”

But the problem is not limited to Aliso Canyon or Southern California.

Natural gas storage levels in the Pacific Rim, including California, Washington state and Oregon, were 25% lower in December than a year ago and 30% lower than the five-year average, according to the EIA. “Injections by Pacific Gas and Electric to restore natural gas supplies in Northern California have not kept pace with previous summers,” the EIA added.

SoCalGas and Long Beach Utilities, meanwhile, assured consumers that the bill increase would not increase their profits and offered a number of tips to help consumers prepare for inflated January bills.

Both companies advised natural gas users to lower their thermostats by 3 to 5 degrees – which could result in up to a 10% reduction in heating costs. Washing clothes in cold water, limiting hot showers, lowering the temperature on your water heater, and limiting the use of non-essential natural gas appliances can also help a little.

“Resources are available to help customers manage higher bills, including payment plan options and lower rates for seniors, the disabled and customers with other incomes,” Long Beach Utilities said. Information about those programs can be obtained from the website of that department.

SoCalGas also has a number of financial assistance programs to help eligible customers manage higher bills – including delinquent bill forgiveness, bill discounts and free energy efficiency home improvements through the Energy Savings Assistance Program. Detailed information about those programs can be found on the company’s website.

The Associated Press contributed to this report.

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