San Diego Gas and Electric’s (SDG&E) customers will see lower prices in March as the cost of the commodity continues to fall.
SDG&E officials said the cost of natural gas in Southern California is down for the second straight month after reaching record territory in January.
“This substantial reduction in gas prices is wonderful news for customers,” said SDG&E vice president of customer services Dana Golan. “We understand the unprecedented volatility in gas markets across the Western U.S. has been difficult.”
The March price was set at $.60 a therm which is significantly lower that the $3.45 customers paid in January. The price in February was $1.11.
Typical residential gas bills in the utilities service would be about $83 for the month. That same amount of natural gas cost $225 in January.
“Historically, as we get out of January, into February, March, April and May, usage of gas in order to heat your home goes down,” said Anthony Wagner of SDG&E. “So the less you use actually depresses the supply and the demand of the market.”
Wagner said commodity prices, which SDG&E passes along to customers at the same price that they pay for it on the open market, drove the price spike.
The utility said rates also include the costs of delivering natural gas, which includes pipeline and storage costs.
And customers are charged for public purpose programs, such as California Alternate Rates for Energy (CARE) and Family Electric Rate Assistance Program (FERA).
“Everybody pays into lowering the cost for people who can afford gas and electricity the least,” Wagner said.
Customers are also getting an early credit from California regulators. Last month they approved moving natural gas credits from April and electricity credits from the summer to February and March.
The state raises money from the sale of pollution permits and those funds pay for credits — a benefit from the state’s cap and trade program.
SDG&E is also making available $16 million to help customers who are having trouble paying their utility bills.
The price jumped so high in the first month of the year that the California Public Utilities Commission (CPUC) held a hearing to explore the causes of the price spike.
“Customers are really hurting here,” said Alice Busching Reynolds, the president of the CPUC during the hearing earlier this year. “People have experienced severe 'sticker shock' on their energy bills.”
Testimony indicated high demand caused by cold weather, low supplies and some pipeline issues contributed to the high prices.
CPUC officials said, however, they would work with federal energy regulators to find out if there was any market manipulation or other reasons for the increase.
California had the highest natural gas prices in the nation in January.
A local group, Public Power San Diego implored city officials to look into the situation saying SDG&E was warning of high prices last fall, but the actual prices were higher than the utility expected.
SDG&E has an estimated 3.7 million customers in its service area. About 900,000 of them have natural gas hookups.
