With natural gas wholesale prices at a 2 1/2 year low, Pacific Gas and Electric Co. and Southern California Gas Co. separately are telling their more than nine million customers this week that they can expect much lower monthly utility bills this winter. For the immediate winter, supply and prices should be fairly stable, according to both national and state reports.

Longer term, a draft natural gas infrastructure report from the California Energy Commission, however, continues to raise warnings about: 1) the state’s ability to transport and store interstate supplies through its in-state system, particularly in the southern half of California; and 2) too much reliance on natural gas-fired plants for new electricity supplies.

The PG&E utility announced Thursday it expects a “significant decrease” in gas bills for customers. The continuing drop in wholesale gas prices is expected to decrease customers’ bills by more than 50% this October versus a year ago, the utility said in a media announcement. The average residential bill for October 2001 should be $14.33 compared to $28.77 in October 2000.

“The downward trend in market prices, for PG&E gas utility customers, is the result of an abundant supply, ample gas in storage (locally and nationwide), a decrease in demand, and adjustments from prior months,” the utility said. “During the summer months, (the utility) sought the best market prices, mainly from Canada, and began filling its underground storage facilities.”

SoCalGas officials are telling customers the rates should be much lower than last December when spot prices were about 80% higher than they are now.

Unlike private-sector utility electricity customers whose rates are frozen, natural gas retail utility rates vary monthly with the market, so last winter an average residential bill was running about $80/month. This winter, SoCalGas said, the average bill should be under $60/month.

The basic commodity cost for residential customers’gas for next month will be 15.9 cents/therm, compared with 57.04 cents/therm last October, according to SoCalGas. Transmission costs remain about 40 cents/therm.

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