SoCalGas rep explains price spike to Riverside County supervisors

The natural gas price spike forcing Inland Empire residents and others throughout California to dig deeper into their pocketbooks prompted a Southern California Gas Co. representative to offer a public explanation during the Riverside County Board of Supervisors’ meeting Tuesday.

“We have to purchase our gas on the commodities market, and unfortunately bad weather has made it more expensive to purchase,” SoCalGas spokeswoman Lea Petersen told the board. “On the open market, it costs more.”

Petersen pointed out that, in addition to the Arctic blast that recently gripped the U.S. interior, driving up demand for product, gas suppliers and speculators have been motivated by opportunities for “making more money by shipping natural gas to other countries,” leaving less available for domestic use.

European Union nations, which embargoed liquefied natural gas deliveries from Russia following the outbreak of hostilities with Ukraine, have been straining to find other sources, especially during the winter months, turning to U.S.-based sellers.

SoCalGas sent letters to customers earlier this month warning that eye-popping gas bills were in the mail, stemming from thermal unit costs doubling.

Energy market analysts have noted California has its own unique set of challenges with keeping the natural gas pipelines filled. The state’s predominant interest since the Global Warming Solutions Act was signed into law in 2006 has been expansion of renewable energy sources, mostly wind and solar.

According to the California Energy Commission, the state receives only about 10% of natural gas from in-state production, relying on deliveries from other parts of the country and Canada for the balance.

Former state Sen. Melissa Melendez, R-Lake Elsinore, this week blasted the state’s regulatory environment for discouraging production and increasing supplies, saying “taxes and regulations cause prices to be higher here.”

“Allow competition, and the prices come down,” she said.

According to the New York Mercantile Exchange, the prevailing spot price of natural gas, measured per 1 million British thermal units, has been steadily dropping over the last several weeks, which should eventually feed into the retail market, lowering household natural gas expenses.

Petersen said SoCalGas customers have options to get some pocketbook relief in the meantime, including via the company’s “level bill paying programs,” which can knock 20% off of monthly outlays.

Customers with questions or requests were encouraged to contact the company at 800-427-2200, or visit the web portal for more information, www.SoCalGas.com.

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