NGI The Weekly Gas Market Report
With electricity price shock still very much on their minds, California’s three major investor-owned gas utilities are already gearing up for potential similar shock surrounding natural gas bills this winter as gas futures prices are hovering twice as high as they were a year ago. Wednesday natural gas futures hit another all-time high, topping $5.
“We’re putting together a plan right now and should be rolling it out in the next few weeks,” said a San Francisco-based spokesperson for Pacific Gas and Electric Co. “From what we are hearing from the industry analysts, it sounds like the wholesale gas prices are going to be significantly higher, which will definitely have an impact.”
The PG&E Corp. combination utility is currently assessing how high the average residential and small business gas bills might be, trying to make educated guesses on future wholesale prices that have remained at record levels all summer in the midst of the electricity crunch.
Sempra Energy’s two utilities, Southern California Gas Co. and San Diego Gas and Electric Co., are both preparing winter high-bill communications efforts, too. Sempra is expecting increases of at least 30% this winter, which would increase average SoCalGas residential bills to $72 monthly, compared to $54 last winter; and $58 monthly, from $44 last year, for SDG&E.
The San Diego utility last spring spent $1 million in advertising and promotion to forewarn its electricity customers about the prospect of high summer power bills, but when the price spikes first emerged in June the communications effort appeared to have had little effect in dampening the outcry from consumers and state officials.
The PG&E gas utility spokesperson said it is still undetermined if it will apply advertising to the gas bill campaign since the company has experienced “significant advertising budgetary cuts” this year. “It will definitely include news media, direct customer contact, call center information and billing inserts.”
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