If you haven’t already opened your January natural gas bill, prepare to be stunned.
Remember how high that December gas bill was?
Well, January’s is much, much worse.
For instance, Kevin Cutler of Arroyo Grande wrote in to tell us his bill for 110 therms (a therm is the measurement used to compute usage) was $502.30. The bill for the previous month, when he used 111 therms, was $244.26. That’s a 106% increase over a single month.
He was floored.
“I had no idea. None whatsoever. I was blindsided. It’s just like, holy cow. It comes and poof — there it is. No warning,” he said.
Utility companies did issue some advisories.
For instance, SoCalGas posted this message on its website on Dec. 29: “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.”
It also sent out emails to some customers earlier in the month. Problem is, a lot of us were likely too caught up in holiday celebrations to pay much attention to the warning — if we even saw it in the first place. Only now are we getting those “shockingly high” bills that, in many cases, are hundreds of dollars more than what we usually pay.
There is some relief in sight.
Wholesale natural gas prices are dropping. According to SoCalGas, customers can expect a decrease of 68% on their February bills, though they will be higher than they were a year ago.
But that still leaves us straining under the financial weight of those outrageous January bills.
It also creates even more distrust of big utilities like SoCalGas and PG&E. If this happened once, couldn’t it happen again?
An unprecedented increase
We’ve been offered several reasons for the outrageous increase, mostly in easily digestible bullet points like these listed on the SoCalGas website:
Company officials insist they in no way profited from the higher bills.
“Like other utility companies, PG&E does not control the market prices it pays for gas and electricity nor does PG&E mark up the cost of the energy it purchases on behalf of its customers,” the utility wrote in its newsletter. (PG&E provides natural gas to the northern part of the state, while SoCalGas serves much of Southern California and in San Luis Obispo County.)
Yet consumers remain skeptical of those disclaimers.
“There’s no way you can justify that kind of increase,” Cutler said. “The money is going somewhere. It may not go to SoCalGas, but it’s going somewhere.”
Severin Borenstein, an economist with the UC Berkeley-affiliated Energy Institute at Haas, raises that same issue.
“We have seen these pipeline issues before and government investigations have sometimes found companies have taken advantage of them to further restrict supply and jack up prices. Just as with California’s gasoline price debate, it’s difficult to tell whether a spike is due entirely to real scarcity or is being exacerbated by sellers who strategically reduce supply,” he wrote for the Energy Institute’s blog.
Climate credit is token assistance
Many of us will no doubt shrug our shoulders, then dig deeper into our pockets and move on.
But what about customers who can’t absorb a $200 or $300 hit?
What do they do?
There is some financial assistance available, but it’s limited. SoCalGas, for example, will provide up to $100 in assistance to households that qualify.
On Tuesday, the California Public Utilities District (CPUC) agreed to move up the distribution of a climate credit, funded through the state’s cap-and-trade program, from April to February or March, depending on your billing cycle.
For PG&E gas-only customers, it’s $52.78 and for SoCalGas customers, it’s $50.77.
That’s a token amount, especially when you consider that this is money we would have gotten anyway. We’re just getting it a little earlier now.
Surely, this situation could have been handled better.
For starters, utilities could have done a much better job communicating about these unprecedented price increases. Many, if not most of us, missed those corporate missives issued weeks ago.
A better heads-up would have at least given us an opportunity to budget for the increase — or maybe hang on to some of that middle-class inflation relief money the state’s been handing out.
The bigger question, though, is how to prevent these spikes from happening in the first place.
While we’re bound to experience some financial pain as we transition away from fossil fuels to renewable energy, what’s occurring now is unacceptable; people shouldn’t have to wake up at night freezing because they’re afraid to turn on the furnace.
Sure, we can bundle up in our heaviest sweaters, wash our clothes in cold water and turn the thermostat down a couple of degrees, but that only saves so much.
We need better remedies, especially if weather extremes like the bitter cold snap we just experienced are going to become California’s new normal.
To their credit, officials appear to be paying attention. The CPUC has scheduled a Feb. 7 hearing on high natural gas prices. It will include exploring ways to “mitigate the impact of natural gas and electric market volatility.” There also will be an opportunity for public comment.
It’s a virtual-only event that will take place from 9 a.m. to 1 p.m.; to participate, go to www.adminmonitor.com/ca/cpuc
We strongly urge you to check it out if you have the opportunity.
Energy officials need to hear how this affects the Californians they are supposed to be protecting — Californians who are now struggling to balance their budgets and asking whether they can afford to turn up the heat.
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