Home » Letter: Helping Customers Reduce Energy Costs as Natural Gas Prices Rise This Winter

Letter: Helping Customers Reduce Energy Costs as Natural Gas Prices Rise This Winter

Aaron Johnson, PG&E Bay Area Regional Vice President

by CC News
Pacific Gas and Electric Company

West Coast natural gas prices have been rising this winter, and PG&E wants our customers to know their energy bills are likely to rise as a result.

PG&E does not control the market prices we pay for natural gas, and we don’t mark up the cost of the energy we buy to serve our customers.

In late January, California average daily prices were five times higher than the U.S. benchmark and those in New York and Chicago.

Price increases are due largely to higher demand and tighter supplies, as customers use more natural gas for heating during cooler than normal temperatures, and as power plants use more natural gas to meet electricity demand.

PG&E customers have used more gas than the five-year average, with November usage 20% higher, December 10%, and January 10% higher.

As a result, residential gas and electricity bills could be 32% higher on average from November 2022 to March 2023 compared to the same time last winter, with most of the increase for energy supply costs.

PG&E works to limit price impacts by accessing the lowest-priced gas from three gas production basins, withdrawing gas from underground storage, and using financial hedging products to lock in lower prices.

We’re also working with regulators, policymakers and lawmakers to provide bill relief—including supporting the California Public Utilities Commission’s decision to distribute the annual April Climate Credit as soon as possible – a $91.17 credit for PG&E customers receiving gas and electricity. We also support the Governor’s call for a federal investigation into high gas market prices.

For energy tips and resources, visit www.pge.com/winter.

Aaron Johnson
PG&E Bay Area Regional Vice President


Editors Note

For those unaware, California imports 90% of its natural gas. Nearly 45 percent of the natural gas burned in California was used for electricity generation, and much of the remainder consumed in the residential (21 percent), industrial (25 percent), and commercial (9 percent) sectors.

When looking at the natural gas chart, prices are at 1992 levels at the moment after a recent spike.

The spike was due to high demand and low supply due to infrastructure repairs in Texas. There is also reduced natural gas storage capacity issues—such as the Aliso Canyon storage in Southern California being reduced from 86 Bcf to 34 Bcf in 2015. In November of 2021, it was increased to 41 Bcf.

Per the California Energy Commission, California continues to depend upon out-of-state imports for nearly 90 percent of its natural gas supply, underscoring the importance of monitoring and evaluating ongoing market trends and outlook. Natural gas has become an increasingly important source of energy since the state’s power plants rely on this fuel.

Natural gas provides the largest portion of the total in-state capacity and electricity generation in California. Tracking Progress provides additional information.

The Energy Commission determines estimates of natural gas supply, demand, and price as part of each biennial Integrated Energy Policy Report (IEPR) process. Staff’s outlook indicates a gradual rise in price over the next several years. The IEPR provides additional current and historical information and staff recommendation regarding the natural gas supply and demand.

 

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1 comment

Dana crawford February 11, 2023 - 10:04 pm

What?your fired! I can’t repeat the words I want to say right now.

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