SoCalGas bill (File Photos – socalgas.com)
The ads from Southern California Gas have said it plainly: “[January natural] gas prices will be shockingly high.”
By Briony James
There was no avoiding these ads, supposedly preparing the public for another round of rate hikes, even though the price of natural gas in other parts of the nation has dropped.
The company cites increased wholesale prices, western state availability, import from western Texas, and the unusually low SoCal temperatures. The East coast has seen less demand due to fair weather since Christmas and falling future prices on the stock exchange as well as increased storage, while the West Coast is seeing the opposite on all fronts. Rates here have more than doubled in December and tripled in January. Homeowners and consumer watchdogs are skeptical, to say the least.
The Consumer Watchdog, based in Los Angeles has noted increased export of natural gas to Europe, where stockpiling has been common as a result of the war in Ukraine. The US Energy Information Administration has noted that transit from West Texas have been ‘constrained’ and that low inventories on the West Coast and reduced pipeline capacity is adding to the price issue, making a normal bill of $130 jump well above $300. SoCal Gas is reluctant to indicate whether or not February’s prices will be any relief. It claims it is not making any profit from the price hike. However, the intent to build a large global export facility in Port Arthur, Texas by Louisiana Cameron, LNG, while also operating an export facility in Ensenada, Mexico, points to export to the European market, which relies heavily on natural gas.
Meanwhile, the American Gas Association claims that there is ample gas for the domestic market as well as exports while keeping prices affordable. To residents in Southern California, that seems a bit of a stretch.
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