Core Ratepayers Face High Winter Gas Bills

By Published On: September 16, 2005

The state’s three investor-owned gas utilities plan to significantly increase their residential and small business customers’ bills this winter. The economic havoc wrought by Hurricane Katrina is blamed for the rise. Given current gas prices, Pacific Gas & Electric estimates it will increase gas bills by 40 percent. SoCal Gas expects to raise small ratepayers’ gas bills by 32 percent. San Diego Gas & Electric anticipates increasing gas rates for households and small businesses this winter by between 27 and 34 percent. Gas prices and core customer rate increases are a “moving target,” noted Christy Dennis, PG&E spokesperson. “As we get closer to the heating season, we will reevaluate,” added Denise King, spokesperson for SoCal Gas, which serves 19 million customers. While utilities have gas in storage to help mitigate price volatility, Dennis said that September is the end of the year’s storage buying season—and it appears that gas rates are at their height because of damage to infrastructure in the Gulf caused by the hurricane and floods. High gas prices are “a national phenomenon, but fortunately we are not as hard hit as some areas,” Dennis added. The utilities buy fuel daily, weekly, monthly, and long term. None of the three buys fuel from the Gulf region directly. SoCal Gas, for example, buys its gas from the Permian Basin and Rocky Mountains, supplies of which are affected by the mess in the Gulf states. Rate increases for PG&E core customers could exceed energy crisis rates, Dennis warned. During 2000-01, gas went as high as $1.41/ therm. Monthly gas prices this winter could hit $1.50/therm. The current price is $1.25/therm for customers who fall below baseline usage levels and $1.47/therm for customers who exceed 130 percent of baseline. More significant, however, is that gas usage increases significantly in the winter months. PG&E and SoCal Gas households use an average 70 therms a month during winter. San Diego households use about 50 therms a month when the temperature drops. On September 6, SoCal Gas and SDG&E requested the California Public Utilities Commission to allow them to use 2006 efficiency funds to lessen the rate hike. They did not request a specific amount but asked for permission “to start drawing on the funding to keep rebates flowing,” King said. PG&E asked the CPUC September 14 to authorize it to tap into $3 million of the $36 million 2006 residential energy-efficiency pot to offset some of the rate hike. Current funds for appliance rebates—for water heaters, furnaces, and clothes and dish washers—dried up earlier this year. Efficiency rebates for larger commercial and industrial customers are still available. PG&E is also asking the CPUC for more flexibility in its hedging to allow it to buy more supplies when costs are lower.

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