LOS ANGELES — An Angeleno by way of Boston, Kate Movius is no stranger to high utility bills in the winter. Still, she was shocked to open her last statement from SoCalGas and find she owed $144 instead of the $50 she was expecting.
“I have never seen anything like this,” said Movius, who has lived in Highland Park for 21 years. “That little chart that shows your therms looked fake. It looked like it can’t be a real bill.”
Like so many other LA customers, Movius was accustomed to SoCalGas being the “relaxing utility bill you get” compared with, say, LADWP. But after posting to the social media site, Nextdoor, asking, “Did anyone else get a crazy SoCalGas bill?”, she realized she was not alone.
More than 300 people weighed in, reporting double, triple or even quadruple their usual bills, some of them as much as $700 for December.
There are several charges on a monthly SoCalGas bill beyond the cost of the natural gas itself. There is also a gas transportation charge, a state regulatory fee, a public purpose surcharge and, in Los Angeles, a city users tax. The increased bills customers experienced in December, however, were largely the result of increased commodity prices.
The price of natural gas increased 81% in December 2021 compared with a year earlier, according to the California Public Utilities Commission, which regulates and approves utility rates in the state. The higher commodity price resulted in an $11, or 17%, increase in the average SoCalGas bill for December compared with a year earlier, according to SoCalGas spokesperson Candice Lee.
SoCalGas charges by the therm, or energy content of 100 cubic feet of natural gas. Forty-seven therms is considered baseline usage. Therms above that baseline are charged at a higher rate.
While last month’s billing increase was entirely because of the higher commodity price for natural gas, Lee said, January bills are expected to be even higher — by about $32, or 32%. About $30 of the January spike is because of the increased commodity cost of gas. Lee said the price of natural gas is determined by regional and national markets and is passed directly to customers with no markup or profit.
“General volatility in the natural gas market resulting in seasonal high prices is caused by expanding global demand with supply being unable to keep up,” said California Public Utilities Commission spokesperson Terrie Prosper. “For SoCalGas, this is compounded by an outage on an El Paso interstate pipeline that brings gas from Texas to Southern California.”
According to the U.S. Energy Information Association, natural gas prices spiked early in 2021 “as a result of the cold snap in Texas, which significantly reduced natural gas inventory levels,” an EIA spokesperson told Spectrum News 1. “Natural gas prices then remained high throughout the year. Leading into December, natural gas storage levels were below the five-year average, which was contributing to those higher natural gas prices.”
Even though SoCalGas customers are paying more this winter, natural gas customers in the Western part of the U.S. are seeing “the lowest percentage increase of any region,” the EIA spokesperson said. The household cost of natural gas increased 21.1% for the Western part of the U.S compared with a 45.3% increase in the Midwest.
Energy prices increased more rapidly than other commodities in 2021, the EIA spokesperson said, “largely driven by increased demand during the economic recovery.”
Commodity costs, however, account for just 20% of an average residential customer gas bill, according to the CPUC. Effective January 1st, SoCalGas bills reflect two rate changes the California Public Utilities Commission approved in 2019.
Those changes include a 6% increase in rates to transport natural gas, which the CPUC estimates will increase an average residential SoCalGas bill by 14% — or $7.38 — in January. A second 21% rate increase reflects a new procurement price for natural gas that is expected to increase an average customer bill by $27.72 this month, the CPUC said.
“The rate changes will allow us to continue to upgrade our infrastructure, retain responsible well-trained employees and support the growth of diverse energy options,” according to the SoCalGas website.
SoCalGas is the country’s largest natural gas utility with almost 22 million customers in a 24,000-square-mile service territory that stretches from Central California to the Mexican border.
To lower their bills, the utility recommends customers lower their thermostats three to five degrees, wash clothes in cold water and install proper caulking and weather stripping, each of which yields an energy savings of about 10%. But with many customers already experiencing monthly bills that are hundreds of dollars more than what they expected this winter, that may not be enough to offset the SoCalGas increases.
SoCalGas has partnered with United Way of Greater Los Angeles on a Gas Assistance Fund that can provide customers with a one-time grant of up to $100. Low-income customers are also eligible for the utility’s California Alternate Rates for Energy, or CARE, program that can save 20% on their bills, as well as an Energy Savings Assistance program that provides no-cost home weatherization services.