Ventura County Star – Major Questions for California’s Gas Companies

By Tom Elias, VENTURA COUNTY STAR

February 20, 2023

https://www.vcstar.com/story/opinion/2023/02/20/major-questions-for-californias-gas-companies/69924242007/

Anytime one of California’s big privately owned utility companies doubles, triples and even quadruples the bills of its customers (compared with year-ago levels), it’s sensible to ask why. And to wonder whether that company is making windfall profits.

So it is today, when the nation’s biggest natural gas utility, Southern California Gas Co., over the last two months more than tripled charges to most of its 21.8 million customers. Similar increases were inflicted upon gas customers of SoCalGas’ sister company, San Diego Gas & Electric, which serves 3.7 million gas meters. Both are subsidiaries of San Diego-based Sempra Energy.

For gas, these companies even serve customers in many cities with municipally-owned electric utilities, like Los Angeles.

To all appearances, the gas price hikes have been far more severe in Southern California than north state areas served by Pacific Gas & Electric. Here’s a key question: what part does the corporate positioning of SoCalGas and SDG&E play in this?

For PG&E, SoCalGas and SDG&E all get their gas from essentially the same sources: Drilling and fracking operations in the Mountain West, Texas, Oklahoma and western Canada. But where the price per therm topped out at about $2.30 in Northern California this winter, it has reached well over $3.40 in areas served by the Sempra-owned utilities.

A therm is a unit of energy equal to 100,000 BTUs. One BTU, or British thermal unit, is the quantity of heat required to raise the temperature of one pound of water by one degree.

SoCalGas has firmly maintained through the winter that its price hikes are purely the result of higher than usual wholesale gas prices, that the company has simply passed those charges along to customers. That may be literally correct.

But the claim raised eyebrows at California’s most effective consumer advocacy group, the Los Angeles-based Consumer Watchdog. The group put out a brief video contending Sempra’s utilities bought much of their recent supplies from the company’s own trading arm, which reaped large profits. 

At the same time, Consumer Watchdog claims SoCalGas and SDG&E were derelict in other areas and that the state Public Utilities Commission (PUC) must investigate its actions. Similar calls for a thorough probe of the price hikes came from California’s Democratic U.S. senators, Dianne Feinstein and Alex Padilla, who called on the Federal Energy Regulatory Commission to step in.

Said Feinstein, “These sky-high and unpredictable rates have had grave effects on my constituents. … Many faced the difficult circumstance of having to pay higher heat and electricity prices at the expense of other necessities such as food or housing costs, or choosing to forego heating and the use of home appliances.”

Consumer Watchdog President Jamie Court maintains that whoever investigates must ask at least a few questions: Why did Sempra’s utilities fail to hedge contracts or have long term contracts necessary to deliver gas at cheaper off-season rates rather than having to buy at the height of the spot market in mid-winter?

He also asks why SoCalGas, for one, depleted its usually heavy inventories of gas in November and early December, when its per-therm prices were significantly lower and wholesale prices also far lower, rather than setting itself up to have need at the height of the market?

And he wondered how much parent company Sempra made from spot market transactions with its own companies in Southern California.

All are reasonable questions for which consumers need well-documented answers.

One other question also should be raised, given the way that California utilities like PG&E and Southern California Edison long have made up for penalties assessed against them for wrongdoing by raising rates after a bit of time has passed.

This is it: Are the winter’s huge price increases actually a way for SoCalGas to recoup all or most of the $1.8 billion it had to pay in damages for the 2015-16 leaks from its Aliso Canyon storage facility in the hills above the Porter Ranch section of Los Angeles?

And here’s a mandate for the PUC: Get solid answers to all these questions before ever granting another rate increase to either SoCalGas or SDG&E.

Latest Energy Videos
Video thumbnail
Who is Behind SB 540?
02:29
Video thumbnail
ABC 7: Controversial CA Energy Bill Moves Forward
08:15
Video thumbnail
KCBS-LA (CBS) - Los Angeles, CA: Late-Night Vote Can Spike Gas Prices
02:26
Video thumbnail
KCAL-LA - Los Angeles, CA: How Will Phillips 66 Closing The Refinery Impact Consumers At The Pump?
03:04
Video thumbnail
KCBS-LA (CBS) - Los Angeles, CA: Phillips 66 To Close Refinery
03:01
Video thumbnail
KGO-SF (ABC) - San Francisco, CA: Controversy Over SF's Bottle Bank Pilot
04:40
Video thumbnail
KTLA-LA (CW) - Los Angeles, CA: Newsom Signs Gas Law Aimed At Preventing Spike In Gas Prices
03:14
Video thumbnail
KNBC-LA (NBC) - Los Angeles, CA: New CA Law Aims To Protect Gas Price Spikes
02:14
Video thumbnail
KTTV-LA (FOX) - Los Angeles, CA: New Laws On Oil And Gas In California
03:04
Video thumbnail
Consumer Alert: Newsom Takes on Gasoline Price Spikes
00:31
Video thumbnail
KCBS-LA (CBS) - Los Angeles, CA: Chevron Moving Headquarters to TX
03:03
Video thumbnail
KGTV-SD (ABC) - San Diego, CA: Californians Overcharged For Gas in 2015
01:55
Video thumbnail
KTXL-SAC (FOX) - Sacramento, CA: Oil Windfall Profits Law Under Microscope
06:06
Video thumbnail
KGTV-SD (ABC) - San Diego, CA: Watchdog Blames Oil Industry For High Prices
02:26
Video thumbnail
KGTV-SD (ABC) - San Diego, CA: Who's To Blame For Recent Spikes In Gas Prices?
02:16
Video thumbnail
Support Oil Driller Accountability, AB 3155
00:54
Video thumbnail
Consumer Alert: The Buck Stops This Summer
01:29
Video thumbnail
New Consumer Alert Exposes Deceptive Oil Industry Attack On Governor Newsom
01:39
Video thumbnail
KOVR-SAC (CBS) - Sacramento, CA: Signs Fueling Debate Over Gas Tax
02:24
Video thumbnail
Consumer Alert: More Deceptive Big Oil Ads Targeting California
01:31
Video thumbnail
KGO-SF (ABC) - San Francisco, CA: CRV Fee on Alcohol Starts On January 1st
02:31
Video thumbnail
Consumer Alert: Deceptive Oil Ads
01:38
Video thumbnail
Consumer Alert: Big Oil’s BS Mailer
01:52
Video thumbnail
KABC-LA, CA: Lawmakers Should Prevent Refineries from Selling Expensive Summer Blend of Gas Overseas
02:58
Video thumbnail
KPIX-SF (CBS) - San Francisco, CA: California Gas Prices Are Soaring Again
00:32
Video thumbnail
KCAL-LA - Los Angeles, CA: Gas Prices Skyrocketing
02:52
Video thumbnail
KTLA-LA (CW) - Los Angeles, CA: So Cal Gas Prices Nearing $6 a Gallon
03:20
Video thumbnail
Spectrum News 1 (San Fernando Valley) - Los Angeles, CA: Controversy Over Gas Storage Facility
03:50
Video thumbnail
KFMB-SD (CBS) - San Diego, CA: Gas Tax Increase Takes Effect July 1st
03:23
Video thumbnail
CBS 8 - Los Angeles, CA: What You Need to Know About Gas Prices
02:02
Video thumbnail
KGO-SF (ABC) - San Francisco, CA: BottleBank Update, Is It Really Effective?
02:39
Video thumbnail
Senator Portantino, Shame on You
01:18
Video thumbnail
Senator Portantino: Protect Our Communities From Oil Drillers
00:51
Video thumbnail
KERO-BFL (ABC) - Bakersfield, CA; Oil Drilling Near Homes Can Cause Health and Safety Concerns
03:06
Video thumbnail
KNBC - LA, CA; Consumer Watchdog's Liza Tucker On New Concerns With Santa Susana Field Lab Clean Up
04:09
Video thumbnail
(ABC) - LA, CA; SoCal Edison's New Income Based Proposed Charges Might Not Be As Stable As They Seem
02:40
Video thumbnail
(CBS)-Fresno, CA; Victory For Californians As Bill Passes That Will Regulate Profits Of Oil Refiners
02:17
Video thumbnail
CNBC - Jamie Court Speaks About The Bill That Would Penalize Oil Refineries For Price Gouging
06:39
Video thumbnail
KXTV(ABC) - Sacramento, CA; Governor Newsom Announced A New Deal With Lawmakers To Take On Big Oil
02:56
Video thumbnail
KNBC-LA (NBC) - Los Angeles, CA; Holding Utility Companies Accountable For Power Outages
02:01
Video thumbnail
Consumer Watchdog at CA Senate Energy Cmte 2 22 23
50:54
Video thumbnail
KFMB CW - San Diego, CA; Oil Companies Need to be Held Accountable for High Gas Prices
02:42
Video thumbnail
KTTV (FOX) - Los Angeles, CA; Recap Of Jamie Court's Testimony At The Senate Hearing For Gas Prices
05:07
Video thumbnail
KGTV(ABC) - SD, CA; Jamie Court Will Testify at the Price Gouging Hearing for Rising Gas Prices
01:17
Video thumbnail
KTTV-LA (FOX) - Los Angeles, CA; SoCal Gas Bill Sticker Shock
04:24
Video thumbnail
Spectrum News 1 - Los Angeles, CA; Who Is SoCal Gas Buying Their Gas From?
09:18
Video thumbnail
Why SoCal Gas is at Fault For Doubling Your Natural Gas Bill
01:43
Video thumbnail
KNBC - Los Angeles, CA; Spike In Natural Gas Prices
02:32
Video thumbnail
KCBS - Los Angeles, CA; New Year, New Pain At The Pump
03:02
Latest Energy Report

Subscribe to our newsletter

To be updated with all the latest news, press releases and special reports.