Natural gas prices across Southern California going way up
As all of Southern California faces historically high costs for natural gas, Long Beach Utilities customers will see a dramatic increase in their gas bill for January.
This follows already higher-than-usual bills from December. The average single-family residential customer could see an increase of $200 or more on their bill, depending on their usage.
The wholesale cost of natural gas for Southern California has tripled since just last month and is about four times higher than it was at this time last year. The high prices are attributable to:
• Increased natural gas consumption due to below-normal temperatures in the western part of the country
• A 14 percent increase in natural gas used for the generation of electricity as severe drought has reduced the availability of hydropower
• Constraints on the interstate pipelines serving California, as imported gas makes up 90 percent of the state’s supply
• Significant lower volumes of natural gas in California’s storage fields due to maintenance and infrastructure failures
Natural gas bills primarily are made up of two components:
1. The cost for the gas commodity itself applied against the volume the customer uses that billing period, which is a straight pass-through to the customer without markup
2. The charges that cover both the pipeline transmission of gas to customers and the provision of customer services
Long Beach Utilities purchases natural gas on the wholesale market and passes that cost onto the customer — the utility does not take a profit on the gas provided to customers. Having a locally-owned utility, customers in Long Beach and Signal Hill also benefit from a lower transmission cost for natural gas than other Southern California residents.
Long Beach Utilities has taken immediate steps to mitigate customer impacts, including:
• Maximizing withdrawals of our less expensive storage inventory
• Renegotiating some local gas supply contracts
• Applying $1.3 million in reserves to reduce customer impacts
In addition, there are extended payment plans, level pay plans, low-income discounts for qualifying customers, appliance rebates, and other assistance programs available to customers.
In the coming days, weeks and months, Long Beach Utilities is aggressively reviewing current natural gas purchasing strategies to find additional ways to provide greater price stability and customer protection going forward.
Customers are encouraged to do what they can to conserve to lower January bills:
• Dial down the thermostat to 68 degrees or lower
• Warm your home with natural sunlight during the day
• Wash clothes in cold water
• Take shorter hot showers
• Bundle up with warm blankets, socks and sweaters
For frequently asked questions and other information, visit longbeach.gov/energyresources. To set up a payment plan, call (562) 570-5700.
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