California’s three principal gas distributors are gearing up fora major customer education program this fall in the face ofincreased wholesale gas prices ranging from 35% to 50%. It hascaused the companies to dust off conservation and low-incomeassistance programs from previous years.
Pacific Gas and Electric Co., which is estimating that theaverage gas bills will shoot up by 50% this winter, earlier inSeptember started what it calls the “Conserve and Save” publicawareness program, including energy audits, a toll-free telephonehotline, extra time to pay monthly bills and billing assistance anddiscounts for eligible low-income families within 150% of thefederally established poverty level.
The PG&E utility estimates translate into averageresidential monthly bills going from $50 to $75 (50% increase);small commercial, $330 to $460 (39%); and large industrials jumpingfrom $13,000 to $19,300 (48%).
“We want to give our customers as much information as possibleso they can start to plan,” said a San Francisco-based PG&Eutility spokesperson. “We don’t like high prices any more thananybody, but we feel that if people have the information up frontthey can decide if they want to do something, such as putting asidemoney in their budgets or getting on a balanced payment plan.”
About 8% (323,000) of the eligible residential customers are onthe balanced payment plan, said the spokesperson, who saidcustomers are referred to a number of company and community-basedprograms when they are eligible.
“People working in the industry have been aware of the priceincreases in the wholesale market, but customers haven’t been usinggas and aren’t aware of it at this point.”
In the southern half of the state where temperatures tend to bemilder and winter gas bills on average smaller than in the PG&Eterritory, Southern California Gas Co. saw its weighted averagecost of gas jump 44 percent between Aug. 1 and Sept. 1 (39.3 centsto 56.5 cents/therm). Company officials are expecting the prices tostay high throughout the winter, so like the PG&E utility,SoCalGas is developing an information campaign, includingadvertising, newsletters and bill inserts.
“Gas production hasn’t kept pace with demand,” said Anne Smith,a SoCal vice president, quoted in an internal newsletter for thegas utility’s employees. “When oil and gas prices were low in 1998,exploration and production companies cut back their drillingactivities. But, natural gas consumption has been increasing.”
SoCal’s parent company, Sempra Energy, has been putting outestimates that gas costs will be up by at least 40%, and the SanDiego-based company, which also owns San Diego Gas and Electric, isconcerned about customer unrest like occurred this summer oversky-high electricity bills caused by a wholesale price run-up thatremains.
Under an incentive ratemaking process, SoCalGas buys gas for itssmallest customers on the wholesale spot market and in most caseshas been able to keep its weighted average cost of gas below theCalifornia-Arizona border price, which has been among the highestin the nation this year. In addition to the utility tradingoperation, the gas utility, as the nation’s largest, maintains 70Bcf of gas in underground storage for its core (residential/smallbusiness) customers and has access to more than 1 Bcf/d ofinterstate pipeline capacity.
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