inflation /

California Home Heating Prices Spike as Natural Gas Prices Double

Some state residents see heating bills approach $1,000 per month

California residents are having their pocketbooks squeezed by surging energy costs as the price of natural gas used to heat homes has doubled since last year.

Natural gas consumption has hit record levels, partly due to increased natural gas use in power plants generating more electricity, according to the U.S. Energy Information Administration (EIA).

The agency says that more natural gas is being used to generate electricity to make up for the decrease in coal-fired power generation as Americans now feel the cost of climate policy pushing the U.S. away from fossil fuels.

California-based TV Show host Kim Iversen posted an image on Twitter of a heating bill for her 88-year-old neighbor, showing a massive jump in the cost to heat her home.

A year ago, the home heating cost was $446.04. Last month’s bill was $632.30, while her projected cost for next month is $927.86.

Southern California Gas Company (SoCalGas) called January bills “shockingly high,” informing its customers that gas market prices rose 128 percent between December 2022 and January 2023.

“We understand that our customers are starting to feel the pain caused by large changes in the natural gas market,” Senior Vice President and Chief Customer Officer Gillian Wright told customers in an online statement. “And we also recognize that we owe it to our customers to provide them with as many tools and tips as possible to help them find ways to prepare for colder weather and higher winter bills, including financial assistance in some cases.”

SoCalGas told its customers that if their peak winter bill last year was around $65, they can expect to see prices closer to $160 this year. The company also advised that if a person’s bill was about $130 last winter, they can expect to see bills around $315 this year.

California’s surge comes as other parts of the U.S. are seeing natural gas prices plunge to the lowest levels in nearly 18 months. “It’s the exact opposite of what’s happening in California today,” Robert Yawger, managing director and energy futures strategist based in New Jersey at investment firm Mizuho Securities, told the LA Times.

The Times also reported that the spike in California’s natural gas prices have been impacted by constraints in gas deliveries and reduced pipeline capacity.

Last summer, California regulators revised the state’s building code to curb gas-fueled water and space heating in new homes, in a bid to reduce natural gas usage to help mitigate perceived effects of climate change. The rule change from the California Energy Commission requires family homes to be constructed “electric ready” with electric appliances.

According to the EIA, about 36 percent of U.S. electricity is still generated by natural gas.

To help ease the financial cost of rising prices, SoCalGas has made a $1 million contribution to the Gas Assistance Fund to help people struggling with winter bills. The fund provides relief on a first-come, first-serve bases to SoCalGas customers, allowing them to reduce the amount of their gas bill up to $100 for a single month.

“We know that these higher prices have a real impact on our customers,” Wright said. “But we want them to know that there is help. We have valuable information on how to conserve energy, programs to assist with managing your energy usage and an unprecedented contribution to our Gas Assistance Fund, which will help our most vulnerable customers pay their bills.”

California has been on the front lines in the war against climate change, with state authorities pledging to cut fossil fuels by 2030, including ending the construction of new gas-burning power plants, which may potentially help the climate, but put the state as higher risk of blackouts, according to the Washington Post.

State officials are also seeking to ban non-electric vehicles by 2035, transitioning to an all-electric future.

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