Relief should be coming: Heating bills expected to come down
The run-up in natural gas prices that sent home heating bills through the roof last month has begun settling down, meaning residents who froze through January might consider turning up their thermostat just a little.
Although the West Coast is still paying more than double what the rest of the country is paying for natural gas, the supply constraints that contributed to unprecedented high prices are easing as part of a sunnier outlook for consumers.
“The good news is that prices are trending lower in the past couple weeks. They are still high compared to Henry Hub (the national benchmark), however,” staff at the California Energy Commission said by email Wednesday.
West Coast spot-market prices that peaked at more than $53 per million British thermal units on Dec. 22 settled Wednesday below $12, according to the U.S. Energy Information Administration. Nowhere east of the Rockies were prices greater than $4.85.
Southern California Gas Co. issued a news release Tuesday saying the utility’s February procurement prices would be 68 percent lower in February than in January. It said residential and small-business customers that got a $300 bill in January can expect this month’s total to come in around $135, which it noted was still relatively high.
“While we’re relieved that prices have dropped significantly since last month, they remain higher than usual for this time of year,” Socalgas Senior Vice President Gillian Wright stated. “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.”
A spokesman for Pacific Gas and Electric Co. said by email spot prices that set the forward pricing customers pay have been lower in January than December “but they continue to be higher than the rest of the country.” The spokesman, Denny Boyles, added abnormally high prices will continue to keep bills relatively high, depending on weather and usage.
Improvements to supply are the main factor driving prices lower, along with somewhat warmer weather, energy commission staff explained. They pointed to good news along El Paso Natural Gas Co. LLC’S Line 2000, whose closure for maintenance was
widely blamed for contributing to December’s price spike, along with abnormally low temperatures and unusually short inventories of natural gas across the West Coast.
On Jan. 25, El Paso announced it had finished work on the natural gas pipeline. It said it filed a request with regulators that same day to lift a pressure restriction so it could return the conduit to commercial service.
The energy agency said it remains concerned about the impact high natural gas prices are having on Californians. Staff said the commission is working with the California Public Utilities Commission to cushion the impact of price spikes.
PG&E and Socalgas don’t control market prices and they don’t mark up the cost of energy. Commodity prices are a pass-through expense for the utilities, which instead make most of their money charging interest for investments intended to keep their systems safe and reliable.
In a news release last week, PG&E noted CPUC was scheduled Thursday to consider issuing an annual climate credit early instead of waiting until April, potentially resulting in a bill credit of $91.17. The utility said it supports the idea.