Average natural gas bills in February expected to decrease by $115

After hitting historic highs this winter due to unprecedented market conditions in the western United States, San Diego Gas & Electric announced today that the February natural gas commodity price has declined by 68% percent compared to January 2023, plunging from $3.45 per therm to $1.11 per therm.

The typical residential customer’s gas bill (commodity plus delivery charges and other mandated fees and taxes) is expected to decrease to ~$110 in February, from ~$225 in January.

“Lower gas prices are certainly welcome news, but we recognize many of our customers still need support to deal with higher gas bills, and we’ve developed solutions to ease the financial strain,” said SDG&E Vice President of Customer Services Dana Golan. “We are here to help and encourage customers to take advantage of our assistance programs, bill discounts and energy efficiency programs that can help provide additional bill savings.”

High natural gas demand caused by cold weather coupled with the partial closure of a major third-party pipeline that provides gas to the West and limited gas storage in California has caused extreme volatility in gas prices.

SDG&E does not set the commodity price for natural gas. Instead, natural gas commodity prices are determined by national and regional markets. SDG&E buys natural gas in those markets on behalf of residential and small business customers, and the cost of buying that gas is billed to those customers with no markup, meaning SDG&E does not profit from the movement of gas commodity prices.

Assistance Programs 

SDG&E customers are encouraged to take advantage of a variety of assistance programs, including bill discounts, debt relief, payment plans and energy efficiency programs. The Neighbor-to-Neighbor program, funded entirely by SDG&E shareholder dollars (not ratepayer dollars), provides eligible customers with up to $300 to offset their outstanding bills. The federally funded Low-Income Home Energy Assistance Program (LIHEAP) offers financial help ranging from a few hundred dollars to a few thousand dollars, depending on household income, size, and past due balances. Learn more at sdge.com/assistance.

Winter Energy Savings Resource

SDG&E began alerting customers about rising gas prices and rate changes in October so they could be better prepared this winter and has created a dedicated webpage with tools and tips to help customers cut their winter energy bill. Check it out at Energy Management - Winter | San Diego Gas & Electric (sdge.com).

Why Are Prices So High?

According to the U.S. Energy Information Administration (EIA), a number of factors have contributed to higher natural gas commodity prices that customers are seeing in bills this month. 

• Widespread, below-normal temperatures on much of the West Coast, including Washington and Oregon;
• High natural gas demand for heating by customers in areas with below normal temperatures;
• Reduced natural gas supplies to the West Coast from Canada and the Rocky Mountains;
• Reduced interstate pipeline capacity to the West Coast because of pipeline maintenance activities in West Texas; and
• Low natural gas storage levels on the West Coast.

According to the EIA, the U.S. set a natural gas consumption daily record on Dec. 23, 2022, further exacerbating supply and demand woes.