Utility regulators are already looking ahead to California’s winter in an effort to determine if natural gas prices will spike into record territory like last year.
The California Public Utilities Commission gathered with industry officials on Thursday for a briefing on the regional natural gas market.
Customer bills soared in January when natural gas prices in those markets climbed into record territory. The cost of the commodity more than doubled from the year before.
In San Diego, the price of a thermal unit, used to measure a specific quantity of natural gas, hit $5.11 in January. That was more than twice the price the year before.
Utility officials said unusually cold weather conspired with pipeline repairs and low inventories to push prices up.
The natural gas market looked significantly different this year.
“Currently there’s much more supply availability in the west compared to last year,” said Ray Sasaki of Southern California Gas, a Sempra Energy subsidiary. “Most of the pipeline outages have been resolved and that’s a huge deal, especially with the return of El Paso line 2000.”
Market watchers are hopeful that it will push prices down significantly from last year’s record-high rates at a time when gas use in San Diego is highest.
National Weather Service forecasters predicted California will have a moderate winter this year, but a strong El Niño could change that. Utility officials just do not know.
“It is difficult to quantify, but the main point is that these uncertainties are translating into elevated prices,” Sasaki said
But national observers are optimistic that bills will not rise at the same pace this year as they did last year.
They see healthy supplies and reserves, two crucial factors that influence price.
“They (supplies and reserves) are up by 9% percent overall, but in the West they’re up by 14%,” said Mark Wolfe, the executive director of the National Energy Assistance Directors Association.
But overall Energy prices remain high and consumers might struggle to pay high bills in the winter when it is cold, and in the summer when it is hot.
“Families are saving, maybe, some money on their natural gas bill. They still have to deal with outstanding cooling bills from summer. And many are behind,” Wolfe said.
San Diego Gas & Electric offered customers several shareholder funded initiatives to offer relief from overdue bills, but the company said about a quarter of their customers were late paying their bills last year.
The Utility Reform Network (TURN) is calling on California’s utilities to do a better job of preparing customers for higher bills if they see a price spike coming.
TURN argues San Diego’s fortune 500 energy company could have done much better.
“Sempra — the parent company of SDG&E that buys all this gas — did a very poor job,” said Mark Toney, executive director of TURN. “They failed last year to do proper management to keep the prices down. Winter comes every year, and every year there needs to be good management of buying ahead of time, storing the right amount of gas.”
Toney gave Pacific Gas and Electric higher marks for minimizing the cost to consumers by buying natural gas in the summer, when prices were cheaper, and by having more of the fuel in storage in the winter.
