LOS ANGELES — As temperatures dip into the 40s this week, Southern Californians should brace for higher heating bills.
“With cold weather, natural gas usage goes up because people want to stay warm,” said Don Widjaja, SoCalGas vice president of customer solutions. “And then there’s the other side of the coin: the price of natural gas. Because of the situation globally with Ukraine, we expect our typical customer this winter season will experience an increase of about 25% in their bill compared with a year ago.”
Natural gas prices are 66% higher this year compared with 2021, according to a new winter forecast from the U.S. Energy Information Administration released Tuesday. The EIA attributes the increase to geopolitical risks associated with Russia’s invasion of Ukraine, lower-than-average global natural gas and coal supplies, rising liquified natural gas exports and continued high demand for natural gas in the U.S. electric power sector.
The agency expects natural gas prices will begin declining after January, largely because of increases in U.S. production. Still, the forecast said “the possibility of price volatility remains high.”
Commodity costs account for about 20% of an average residential customer gas bill, according to the California Public Utilities Commission, which regulates and approves utility rates in the state. The rest is largely due to the cost of delivering gas to customers, including infrastructure, and so-called public purpose charges subsidizing programs that help offset natural gas costs for lower-income customers.
While the price of natural gas is determined by regional and national markets and passed directly to customers with no markup or profit, those prices are expected to be significantly higher than normal this December.
The cost of a therm of natural gas energy this month is 62% higher than it was a year ago, according to the CPUC. Future natural gas prices are also trending higher than the last two winters. A typical SoCalGas customer should expect bills of $132 in December, $127 in January and $110 in February if winter weather is average, or $151 in December, $144 in January and $123 in February for a winter that is colder than normal.
To help customers lower their bills, SoCalGas recommends they lower their thermostats three to five degrees, turn down the temperature on their water heaters, wash clothes in cold water and install proper caulking and weather stripping — each of which yields an energy savings of about 10%, according to independent studies.
The utility also offers rebates to upgrade old appliances with models that are more energy efficient. Customers who would like personalized recommendations on how to save on their natural gas bills can fill out a Ways to Save energy profile on the SoCalGas website.
Low-income SoCalGas customers are 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. Customers with qualifying medical conditions may also be eligible for medical baseline rates that provide more gas at a lower price.