After unprecedented highs due to West Coast market conditions, market prices for natural gas have dropped, resulting in a 68% decrease for SoCalGas core customers (residential and small businesses), when compared to prices seen in January. SoCalGas estimates that if a customer received a $300 bill for January usage, that same usage would result in a bill of about $135 for February usage.
While prices in the western region have significantly decreased from the prices seen in January, they remain higher than last year when the average SoCalGas residential bill for February usage was $99.
The core procurement rate reflects the price SoCalGas pays for natural gas for residential and business customers. That rate changes each month. SoCalGas does not set the price for natural gas. Instead, natural gas prices are determined by national and regional markets. SoCalGas buys natural gas in those markets on behalf of residential and small business customers, and the cost of buying that gas is billed to those customers with no markup.
Why Are Prices So High?
According to the US Energy Information Administration (EIA), a number of factors have contributed to higher natural gas commodity prices that customers are currently seeing.
- Widespread, below-normal temperatures on much of the West Coast, including Washington and Oregon;
- High natural gas demand for heating by customers in areas with below normal temperatures;
- Reduced natural gas supplies to the West Coast from Canada and the Rocky Mountains;
- Reduced interstate pipeline capacity to the West Coast because of pipeline maintenance activities in West Texas; and
- Low natural gas storage levels on the West Coast.
According to the EIA, the U.S. set a natural gas consumption daily record on Dec. 23, 2022, further exacerbating supply and demand woes.
“While we’re relieved that price have dropped significantly since last month, they remain higher than usual for this time of year,” said SoCalGas Senior Vice President and Chief Customer Officer Gillian Wright. “We know that many of our customers are feeling the impacts of high prices, and we hear their concerns. More than ever, we urge customers to take advantage of conservation tips, programs, and financial assistance that may be available for eligible applicants to provide some relief.”
Help is Available
Conservation is one way to help lower bills. SoCalGas recommends the following tips to reduce energy usage:
- Lowering your thermostat three to five degrees – if health permits – can save up to 10 percent on heating costs.
- Installing proper caulking and weather-stripping can save roughly 10 to 15 percent on heating and cooling bills.
- Washing clothes in cold water to save up to 10 percent on water heating costs.
- Considering turning down the temperature on your water heater, keeping in mind that most hot water heaters require a temperature of 120 degrees or higher.
- Limiting use of non-essential natural gas appliances such as spas and fireplaces.
SoCalGas’ free Ways to Save tool may also help customers find ways to save on natural gas bills, with a personalized savings plan that offers a household energy analysis, customized energy-efficiency recommendations, bill comparisons and energy usage comparisons. Ways to Save can be found at socalgas.com/WaysToSave. Customers can also sign up for weekly Bill Tracker Alerts to monitor natural gas consumption, take steps to reduce usage, and avoid bill surprises.
There are also a number of programs available.
Eligible customers may sign up for a Level Pay Plan (LPP), for example, which averages their annual natural gas use and costs over 12 months.
And there are financial assistance programs for eligible customers who are experiencing hardships:
- California Alternate Rates for Energy (CARE): Eligible participants can save 20 percent on their natural gas bill. socalgas.com/CARE
- Energy Savings Assistance Program (ESAP): Eligible customers can save energy and money through professional home improvements at no cost. socalgas.com/Improvements
- Arrearage Management Plan (AMP): Eligible customers can apply to have their past due balance forgiven. Learn more at www.socalgas.com/Forgiveness.
Recently, SoCalGas tripled its contribution to the Gas Assistance Fund, increasing its contribution to $1 million. This program helps income-qualified customers pay their natural gas bills with a one-time $100 grant.
Customers can visit socalgas.com/ManageHigherBills for more information on the factors that lead to higher bills and ways we can help.