Long Beach Utilities officials are optimistic that the historically high natural gas prices—which have resulted in shockingly high bills for customers—could be returning closer to normal in the coming months. But they’re still cautioning residents that this month’s bills could be expensive.
Chris Garner, general manager of the city’s Utilities Department, said Thursday that the wholesale purchase price of natural gas at the California border has dropped by about 50% since the start of the month, and it’s his expectation that things will return to normal “fairly quickly.”
“That’s still about double of normal pricing, so we still have some room to go,” Garner told the Utilities Commission during a Thursday morning special meeting.
Natural gas prices have just about quadrupled since January 2022, when the cost of one therm of natural gas was just under $1. Now, it’s nearly $4.
Garner said the average household uses about 65 therms of natural gas per month, and with the wild fluctuation in the price of gas, an average household could see a roughly $186 increase in the gas portion of its utility bill, even if the household used the same amount of natural gas as last January. The department is not profiting from the increases, Garner said.
The department has leveraged some of its reserves, which will help offset some of the financial effects of the high price of natural gas, but it’s still advising customers to take measures to reduce their usage to avoid an even larger bill.
Direct mailers to customers, bill stuffers, robo-calls and social media messages warning of gas bills going “way up” are a few of the measures the department has already taken to spread awareness. Garner said the department is even working to get a billboard along the 405 Freeway to get more people to notice the messaging about high gas prices.
The rise in prices has been attributed to a number of things, including exports of liquefied natural gas to Europe, more gas being used to generate electricity due to the drought and maintenance on pipelines that deliver natural gas. California imports about 90% of its natural gas supply.
While the East Coast has seen its gas prices stabilize, Garner called California “an island” that has yet to see the same rate decreases as the rest of the country. However, he said that the department could look into price hedging once the market returns to normal conditions.
It could allow the department to negotiate deals that would provide more predictability by implementing things like price ceilings for customers. That would require a vote by the commission, and Garner said it’s something that could be in front of them to consider in the future.