Utility says gas costs for December will shoot up by 65%.
The Fresno Bee
Hang on to your wallet and lower your thermostat — again.
Pacific Gas and Electric Co., after calculating its natural gas rates for December, now says that household bills for California’s most common heating fuel will surpass the dismal forecast it issued two months ago.
Instead of increasing about 50% above last year’s charges, average residential bills in December will be about 65% higher than for the same month last year, according to PG&E calculations made public this week.
In the Sacramento region, where an average customer uses about 70 therms of natural gas each month during the winter heating season, an average bill will rise to about $77 in December — from about $47 last December.
“This is higher even than we expected,” utility spokeswoman Staci Homrig said. In September, PG&E had warned that an average Sacramento bill could reach $67 in January.
A consumer group, meanwhile, outraged at spiraling electric bills, wants to put a ballot initiative before voters that would reverse the 1996 law deregulating California’s power industry.
Harvey Rosenfield of the Foundation for Taxpayer and Consumer Rights said Tuesday the initiative would place electrical utilities under the authority of a citizens’ review board and set up a public agency to operate the state’s power grid.
Utilities denounced the plan, saying it would create a new bureaucracy but do little to develop energy supplies.
Nationwide shortages of natural gas, coupled with limited pipeline capacity to feed California’s growing appetite for energy, have driven wholesale gas rates to repeated record highs.
For years, oil and gas well “drilling just didn’t keep pace with how demand was growing,” said Bill Wood, chief natural gas forecaster for the state Energy Commission.
“We were fortunate to enjoy low prices for the last 10 years, and now it’s time to pay Peter,” he said. Wood expects wholesale costs to drop a little next winter as more supplies are tapped, and to fall even more the year after.
But while prices nationally are about double what they were a year ago, prices for delivery at the California border are more than four times higher than last year. And debate about the cause is growing.
Wood said it may be partly because of higher demand this year from California’s power plants. Others blame too little pipeline space and aggressive pricing by pipeline operators.
Michael Shames, head of the Utility Consumer Action Network, said he’s begun to doubt predictions about costs dropping in 12 to 18 months, because the current price spikes have been so much steeper than anyone foresaw.
“It is wild, what you’re seeing today. It’s pretty phenomenal,” he said, and regulators should be looking much harder into whether markets are being manipulated.
“I’m quite convinced that we’re seeing gouging on the transmission end. We’re seeing pure, unadulterated greed,” Shames said.