Experts cite improved weather conditions and related decrease in natural gas demand as contributing to lower market prices

San Diego Gas & Electric Company (SDG&E) today provided customers with an update on natural gas prices. After a significant drop from unprecedented January natural gas commodity prices, market prices for March 2023 are currently trending closer to 2022 prices.

Improved weather conditions and a related reduction in natural gas usage have resulted in lower prices along the West Coast, according to the U.S. Energy Information Administration (EIA), which is charged with collecting, analyzing and disseminating independent and impartial energy information. In addition, the restoration of service to an out-of-state pipeline, which has been offline for two years, is expected to increase supply capacity to the Southwest by as much as 500 million cubic feet per day.

“Although natural gas market conditions are improving, we know the pain of high gas bills is not over. The unprecedented commodity price for natural gas in January is now hitting February bills,” said SDG&E Vice President of Customer Services Dana Golan. “We are here to help our customers with a variety of financial assistance and resources.”

SDG&E’s March natural gas commodity rates will be filed with the California Public Utilities Commission (CPUC) at the end of February. SDG&E does not set the price for natural gas. Instead, natural gas prices are determined by national and regional markets. Natural gas is purchased on behalf of residential and small business customers, and the cost of buying that gas is billed to those customers with no markup. Natural gas prices are updated monthly on customers’ bills.

The markets where SDG&E purchases natural gas remain volatile and sensitive to changing weather and maintenance updates.

What caused prices to spike in the first place?

According to the EIA, several factors contributed to higher natural gas commodity prices:

• 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
• Reduced interstate pipeline capacity to the West Coast because of pipeline maintenance activities in West Texas
• Low natural gas storage levels in the Pacific Region.

A detailed report about these market conditions can be found here.

SDG&E Offers a Variety of Assistance Programs

Recognizing the impact of unprecedented natural gas prices on families and businesses, SDG&E strives to provide customers with the resources and support they need. Customers are encouraged to take advantage of the following programs:

Financial Assistance:

• The Neighbor-to-Neighbor program, funded entirely by SDG&E shareholder dollars (not ratepayer dollars), provides eligible customers 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 to a few thousand dollars, depending on household income, size, and past due balances.

Bill Discounts:

• Income-qualified customers can save up to 30% through the CARE program and 18% on their electric bill through the FERA program.