San Diego Gas & Electric Wednesday cited a dramatic increase in U.S. natural gas prices due to the war in Ukraine and unusually cold weather as a major reason ratepayers will likely see a large jump on their bills this month.
New gas and electric rates went into effect Jan. 1. According to SDG&E, the cost per therm of natural gas more than doubled over the past year, increasing from $2.36 in January 2022 to $5.11 in January 2023.
A therm is defined as 100,000 BTUs of energy, and SDG&E customers average 24 therms a month over the course of a year, with higher levels in the winter and lower in the summer.
The increase means residents who had a peak winter gas bill of about $105 last January can expect the January 2023 bill to be around $225. Customers who are enrolled in the CARE bill discount program could see their January gas bills increase from around $60 to $130.
Natural gas is not just used for heating and cooking, it’s also used to generate 40% of the country’s electricity. A typical SDG&E residential customer who receives both electric delivery and electric generation as a bundled service from SDG&E may see their average monthly electric bill increase by around $25 from $160 to $185 starting this month, according to the utility.
“We understand the challenges customers are facing as the cost of goods and services across the board continues to increase,” said Dana Golan, SDG&E vice president of customer services. “While not good news, we want to make sure our customers are prepared for significantly higher winter bills, and more importantly, that there are tools and resources, including financial assistance available, given the severity of natural gas market conditions.
“Please know that we are here to help and work with our customers who may be struggling financially,” she said.
According to the utility, more than 90% of the increase in the overall gas rate is driven by the market price for gas — the amount SDG&E pays suppliers to buy the gas on behalf of its customers.
SDG&E stressed that there is no markup of the commodity cost for gas or electricity — it is passed directly through to customers and the utiliyt does not make a profit from rising prices.
So if SDG&E pays $1 more for natural gas in the commodity market, that’s what SDG&E customers pay. SDG&E began alerting customers about rising gas prices and anticipated rate changes in October so they could be better prepared.
The reasons for the spike in prices are varied, according to the U.S. Energy Information Administration, including the war in Ukraine; widespread, below-normal temperatures; high natural gas consumption; reduced natural gas flows; pipeline constraints, including maintenance in West Texas; and low natural gas storage levels in the Pacific region.
The utility offered some suggestions for relief and how to save money these winter months, including a variety of assistance programs, including bill discounts, debt relief, payment plans and energy efficiency programs.
Some tips to reduce costs include:
- Using caulk and weather-strip around drafty doors and windows, using a door sweep, door sock or towel at the bottom of doors with a gap;
- Checking furnace filters once a month and replace them regularly. A dirty air filter can increase your energy costs and cause problems with your equipment;
- Using warm water instead of hot water to cut a washing machine’s energy use in half; using cold water will save even more; and
- Lowering the thermostat water heaters to 120 degrees, if possible.
Customers can visit sdge.com/MyEnergy for bill-saving and energy management resources.
City News Service contributed to this article.