Relief for California’s natural gas price pain is coming



By Ben Christopher | CalMatters

Perhaps the governor called a special legislative session for the wrong type of gas hikes.

In the face of wallet-busting gasoline prices across the state last summer, Gov. Gavin Newsom convened a special session of the state Legislature in December to tax the “excessive” profits of California oil refiners. But since then, prices at the pump have fallen back to their still-high-but-not-uncharacteristically-so California average, according to AAA.

In the meantime, Californians are getting hammered with the soaring cost of natural gas. Wholesale prices for the home-heating, water-boiling, climate-warming commodity rose 63% since October, even while prices nationwide were cut in half, Bloomberg reports.

And even that vertiginous average conceals much higher spikes in some locales.

Andra Bard, a Santa Monica resident, whose typical bill of $68 clocked in at $330 last month: “It’s just shocking…This can’t be sustainable.”

But lower bills may be on the way.

With some of the supply bottlenecks easing up, utilities are already promising a steep reduction in prices.

On Thursday, Feb. 2, the state’s Public Utilities Commission voted unanimously to offer Californians some financial relief by speeding up the rollout of an annual bill-reducing credit.

The California Climate Credit, meant to compensate households for higher energy bills that result from the state’s emission-reducing cap-and-trade program, had been scheduled to go out in April from the natural gas companies. But the utility commission’s public advocate sought an emergency order to get the money out this month, to help cover astronomically high January bills.

Now approved, the credit is expected to give customers roughly $50 each. Pacific Gas & Electric, San Diego Gas & Electric and SoCal Gas all supported the move. So did state Senate Republicans, who wrote the CPUC on Monday urging them to send out the credit “as soon as possible.”

Combined with a similar credit on electricity bills, the commission estimates a total of $1.3 billion in relief.

“Natural gas prices throughout the West have risen to alarming levels this winter,” said Commission President Alice Reynolds. “Advancing the California Climate Credit will provide immediate relief to California families struggling to pay their bills while we examine this critical issue and explore longer-term solutions to volatile natural gas prices.”

The utility commission is set for a broader discussion on natural gas prices next Tuesday.

Those prices began their eye-watering ascent along the West Coast in December. Though some consumer advocates are calling for an investigation into possible market manipulation, analysts at the federal Energy Information Administration laid the blame on that familiar duo, supply and demand.

—High demand: Unusually cold weather has pushed Californians to throttle their thermostats.

—Low supply: Infrastructure repairs in Texas and high gasoline demand in Canada resulted in fewer imports to California, which gets almost 90% of its natural gas from out of state. Lower-than-normal stockpiles in Northern California reduced the available slack in the system.

High natural gas prices cast painful economic ripples: Much of the power that California uses during peak hours comes from gas-powered plants. That means higher natural gas prices might also be spilling over onto your electricity bill.





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