State utilities expect natural gas bills lower than last winter

By Karen Gaudette Associated Press Writer
Wednesday February 28, 2001

SAN FRANCISCO — Natural gas prices are dropping nationwide, and two California utilities say their customers can expect substantially lower heating bills — a relief after gas bills exploded last winter by as much as 150 percent. 

Pacific Gas and Electric Co. and Southern California Gas Co. both said Friday that increased drilling for natural gas and a boost in underground storage mean their customers can expect October gas bills to fall by up to half from last year’s levels. Between them, the two utilities deliver natural gas to more than 20 million customers. 

“The indications are that we’re seeing a downward trend in natural gas prices,” said Christy Dennis, a PG&E spokeswoman. 

In PG&E’s territory, residential customers with average use can expect to pay $14.33 for around 30 therms of natural gas in October, down from $28.77 last year. PG&E did not have breakdowns based on home size, nor an exact bill forecast for the rest of winter. 

The average single family in Southern California Gas’s territory can expect to pay less than $60 per month for about 75 therms of natural gas, down from $80 for the same amount last winter. For apartment dwellers, that’s about $25 — as opposed to $35 during the same months last year, said Denise King, a spokeswoman for Sempra Energy, parent company of SoCal Gas and San Diego Gas and Electric Co. 

Those low prices likely will carry through the winter months of November through February, both utilities predicted. SDG&E, which serves 740,000 natural gas customers in San Diego and north Orange counties, did not have its forecast available Friday morning. 

Analysts said prices have reached their current lows — after being the nation’s highest last year — because inventories are high. 

The futures market for wholesale gas suggests prices will rise gradually over the next two years. Prices could climb again as early as next summer as more gas fired-power plants begin running, said Greg Haas, an equity analyst in the Houston office of the investment brokerage firm Raymond James. 

Several factors conspired to boost natural gas prices last winter. 

Unusually cold weather caused consumers to crank up the heat, boosting demand. Drought-like conditions in the Northwest meant California could import less electricity from hydroelectric dams, forcing natural gas-fired power plants to churn out more megawatts by burning more supply. 

In addition, the state Public Utilities Commission, PG&E, and other natural gas sellers have accused natural gas marketer El Paso Corp. of driving up gas prices by preventing competitors from moving California-bound natural gas along its pipeline. El Paso maintains it did nothing illegal. 

A Federal Energy Regulatory Commission judge will soon decide whether there was wrongdoing and advise FERC commissioners in early October whether California gas customers are due refunds.