Natural gas bills for San Francisco-based Pacific Gas and Electric Co. (PG&E) customers are projected to drop an average of 9.2% this January, compared to the same month last year. The combination utility told local Bay Area news media that the lower bills are the result of warmer weather and lower fuel costs.

However, on the electric side PG&E customers on average are facing a 2.9% rate increase that was effective Jan. 1. The average January power bill will be about $77, according to the utility, and adding in the monthly natural gas charges results in an average combined bill this month for residential customers of about $165.

In the traditional peak month for natural gas bills, January charges will average about $88 for residential gas customers, compared with charges last January of about $97 on average.

PG&E told news media that average wholesale gas prices were about 50% lower last year when it was storing gas supplies for this winter, compared with the same period in 2008. The utility attributed a lot of the decrease to the increased domestic gas supplies being obtained economically from shale gas, along with a greater diversity of sources of supply, according to a utility spokesperson.

Retail utility gas bills might have been even lower this month, PG&E said, if not for increases in the cost of transmission and distribution of supplies, and the increased cost of subsidizing low-income customers.

The utility also offers all residential and small business customers credits on their monthly gas bills for lowering their use on a temperature-adjusted basis by 1% to more than 10%. For each 1% decrease, customers get decreases of 1% on their bills up to a 10% reduction. So if a customer lowers usage by 5%, he/she gets a 5% credit on their subsequent bill. Reductions of more than 10% for any one month result in a 20% credit subsequently.

PG&E said 2.3 million of its 4.3 million natural gas customers earned credits on their bills during the winter months last year.

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