Strong demand, tight supply bring forecast of high heating bills
Her four-sentence warning last week about skyrocketing heating bills got northwest Bakersfield resident Donna England Little quite a bit of notice on social media. Maybe it was the kicker: “Brace yourselves friends!”
Neighbors around the city shared their reactions. Kristin H. wrote she “about had a stroke” when this month’s gas bill quintupled to almost $500. Karen C. was glad for the heads-up and announced plans to keep electric blankets and throws on hand.
Angelica Soliz responded with an uncomfortable truth: “I’m going to have to go to the laundromat soon to dry our clothes.”
Believe it: A spike in natural gas prices across the West has brought warnings of peak heating bills close to 150 percent above last year — and no shortage of advice for anyone looking to head off a high gas bill.
Pacific Gas and Electric Co. and Southern California Gas Co. have posted notices offering help while emphasizing they are neither responsible for the jump in prices nor do they benefit from them financially.
The main culprit, spot market prices at major western trading hubs, jumped in December to their highest in 23 years, ranging around six to nine times greater than the national benchmark, according to data from the U.S. Energy Information Administration.
A Dec. 21 update from the agency blames the price jump on factors that have impacted supply and demand at the same time.
On the demand side, it said temperatures have fallen below normal, pushing residential and commercial gas use up 23 percent during the first three weeks of December. At the same time, consumption in electrical power generation surged 14 percent.
Supply did not keep up, the EIA noted: With Western storage inventories down 25
percent from a year earlier, deliveries from west Texas slowed due to pipeline maintenance. Meanwhile, shipments of gas through the Rockies were down 9 percent during the first three weeks of December as compared with the second half of November, the agency reported. Canadian exports to the West, meanwhile, were off 4 percent.
PG&E and SoCalGas, in recent communications to customers, acknowledged a responsibility to keep prices as low as possible while ensuring safe and reliable service. Both utilities pointed ratepayers to programs that
can even out bills over the course of a year, as well as flexible payment options.
“PG&E recognizes our responsibility to serve our customers safely and reliably while keeping their energy bills as low as possible,” Vincent Davis, PG&E vice president, customer operations and enablement, said in an online post. “We’re here to help all our customers save money by working with them to find the best rate plan for their household or business, sharing free and low-cost actions to help them reduce energy usage and better manage monthly bills, and offering
assistance programs for income-eligible customers.”
The San Francisco-based utility said it was doing its best to control prices by buying gas at the lowest price it can, tapping storage when prices are highest and using hedges to lock in rates over a longer period.
The company advised its residential customers to keep their vents clear of furniture and other obstacles, wash in cold water, close blinds at night for added insulation and lower temperature settings on water heaters.
SoCalGas gave its customers a similar set of statements.
“We understand that our customers are starting to feel the pain caused by large changes in the natural gas market,” Senior Vice President and Chief Customer Officer Gillian Wright said in a notice sent to customers. “And we also recognize that we owe it to our customers to provide them with as many tools and tips as possible to help them find ways to prepare for colder weather and higher winter bills, including financial assistance in some cases.”
The company encouraged customers to sign up for weekly bill-tracking alerts for monitoring consumption and cutting use, among other measures.
It specifically recommended lowering the thermostat, installing proper caulking and weather stripping, and limiting use of gas-burning appliances such as fireplaces, spas and pool heaters.