A combination of maintenance issues, restrictions placed on the Southern California Gas Company’s Aliso Canyon storage facility and an increase in the wholesale price of natural gas led to dramatic increases in Long Beach customers’ bills last month.
Long Beach, like much of the state, imports nearly all of its natural gas from out of state pipelines, so any disruption to those lines can create supply issues. The issue was exacerbated by a doubling of the cost of natural gas from December 2018 from December 2017.
The sticker shock from residents led to heated social media posts and emails to City Council members, which prompted a presentation at Tuesday’s meeting to explain the spike.
While rates have returned to more normal levels, the damage for some residents has already been done, leaving them with gas bills of several hundred dollars in some cases.
The presentation to clarify what happened was called for by Councilwoman Suzie Price, who represents the Naples and Belmont Shore area. She said that the unexpected increases in rates has led to dismay among residents and questions over why it happened.
Long Beach Director of Energy Resources Bob Dowell explained that a number of issues played into the price increase and communication to customers wasn’t as effective as it could have been.
The combination of infrastructure issues led to a significant drop in the amount of gas able to be delivered to the region, Dowell said, adding that SoCal Gas is “up against significant hurdles to meet demand for the L.A. basin.”
Compounding the problems, the cost of gas spiked on Dec. 1 to over $13 per deal therm (roughly a 1,000 cubic feet of natural gas). The price was more than double what customers paid in December 2017 and $8 higher than what they paid in November 2018.
Prices have since dipped back down to about $4.70 per deal therm. The energy resources department updates the wholesale price of natural gas on the first of each month on its website and is encouraging residents to be more mindful of rates so they can adjust their usage accordingly.
Dowell said the average customer saw an increase in their bills of about $34, but he acknowledged that households using more gas during the month of December would’ve seen larger increases. Despite only hearing complaints from about 1 percent of customers, Dowell said the impact was much wider.
“I can guarantee you that every customer was impacted and that’s the concern for us,” Dowell said. “Just because they didn’t call doesn’t mean they didn’t see a high bill.”
The gas company has about 154,000 customers in Long Beach. Getting information to them, and ensuring they read it, can be challenging, he said. Using social media and email could alienate those who don’t use them or are enrolled in autopay.
And depending on when a customer’s billing cycle begins, the information could be timely—if their cycle starts at the beginning of the month—or too late to adjust usage before incurring higher costs.
The gas company currently includes inserts or special messages on customers’ monthly bills, but Price said that it could be helpful to make important announcements like spikes in gas prices more prominent.
“I’ll be honest with you, I look at that bill every month and I’ve never read the special message that you have on the bottom,” Price said. “I just saw right now that you have something on there about tree recycling. Never knew that was on there.”
Trash and recycling rates
While the increase to Long Beach residents’ gas bills was seasonal, the higher rates that they will be paying for trash and recycling services was made permanent Tuesday night.
Citing the increased costs to recycle materials, upgrade its fleet and expand its services, the city’s Environmental Services Bureau announced it would raise rates twice in 2019. An increase of $2.41 is expected in March and another increase of $2.47 is expected to follow in October, which will bring the average monthly bill to $28.99.
A special hearing by the City Council was held early Tuesday afternoon to determine if a majority protest existed among the over 117,000 customers in Long Beach which received notices of the proposed increases last year.
Blocking the rates would have required 58,550 customers to object to the rate increases. The city received 138 protests.