Saturday, March 25, 2023

Newsom wants the federal government to investigate California’s high natural gas prices

Gov. Gavin Newsom joined the debate on Monday over rising natural gas prices affecting millions of California utility customers, asking federal regulators to look into whether fraud or market manipulation is taking place.

And locally, a few dozen protesters expressed their frustration outside the San Diego Gas & Electric headquarters, as a coalition of environmental, political and consumer groups called on the San Diego City Council to hold a hearing to find out whether Why SDG&E’s natural gas prices are up Prices hit a record high in January.

Investor-owned state utilities have pointed to a confluence of reasons for the spectacular increase in natural gas prices, such as unusually cold weather that caused Californians to turn on their heaters. But “those known factors cannot explain the scope and longevity of the price rebound,” Newsom said in a letter to the chairman of the Federal Energy Regulatory Commission, which oversees the transmission and bulking of electricity and natural gas in interstate commerce. Is.

The California Public Utilities Commission and California Energy Commission will hold a special hearing on Tuesday, but Newsom asked FERC to use its investigative resources to “assess whether the company engaged in market manipulation, anti-competitive behavior, or other unseemly activities.” Focus on.” Gas market in the west.

The price of natural gas, either as a feedstock or in bulk, tripled last month for the 905,000 customers with natural gas connections in SDG&E’s service area.

Bills for January have started arriving in customer mailboxes, and the utility warned that a typical residential gas customer should prepare for bills that will rise 114 percent compared to January 2022, from $105 to nearly $225 .

Last week, SDG&E announced a major drop in the price of natural gas and predicted it would reduce February bills to as low as $110 for the typical customer. But prices in the San Diego area will still be twice as expensive as in February 2022.

Price shocks were mobilized by Christine Brown, a customer of the power company, to demonstrate through the streets of Kearny Mesa in front of the SDG&E building.

“It’s ridiculous,” said Brown, a retired La Mesa businessman who helped organize the protest. “It’s like we live in a third world country. That’s what motivated us all to do this, because we don’t want to live in a regressive and regressive society. If it’s not water (Bill), it’s electricity . If it’s food (prices), it’s eggs. What else?

Brown stated that the protest was not affiliated with any political or energy group, stating that it was a community demonstration.

“We know it’s not just about SDG&E,” said Brown, who said her family of two has seen their bills rise from $90 to nearly $250. “We know this through cooperation with the CPUC (California Public Utilities Commission) and regulators and politicians and the pieces thrown at us.”

Amy Ley of Kearny Mesa held up a sign that read “Stop Ripping Us”, which drew honks from some passing motorists. He told her that his gas and electric bill had increased from $280 in December to $450 in January.

“The prices are outrageous,” said Le. “It is just shooting and impressing the whole world. It is difficult for us to pay so much and there are people who cannot afford it”.

Diane Brooks, who drove from San Marcos to join the protest, said she wanted more transparency. “We should be able to see the books,” he said.

Their neighbor, retired physician Leonard Mehlmauer, said their gas and electric bill is usually $350, but this month it hit $944. “I want to know what happened,” he said.

Craig Rose Day Public Power San Diego

In front of San Diego City Hall, Craig Rose of Public Power San Diego joins a coalition calling for SDG&E’s hearing on skyrocketing natural gas prices.

(Casey Alfred / The San Diego Union-Tribune)

“For those customers who are angry and upset, we understand,” said SDG&E spokesman Anthony Wagner. “We understand all of your feelings and know that we are in this together. Customers who have difficulties please contact us. They do not need to feel alone. We can help you with a solution because Together we get through it.

Around the same time, a group of seven gathered in front of City Hall. They say SDG&E didn’t do enough to protect customers and want the San Diego City Council to hold a public hearing on the price hike.

“I am a member of the community most affected by these high rates; The community that has to choose between heating or eating,” said Yousef Miller, executive director of Activists of San Diego and the North County Coalition for Equity and Justice.

The groups say the City Council should hold a hearing because the City of San Diego signed a 20-year franchise agreement with SDG&E through 2021 that keeps the company as the exclusive provider of electric and gas services within city limits Is.

“As far as we know, there hasn’t been a serious investigation into what happened,” said Craig Rose of Public Power San Diego, a group that wants cities to ditch SDG&E and create their own public power. Create an owned-and-operated city utility, such as the Los Angeles Department of Water and Power.

“We don’t have a lot of answers,” Rose said. “We have a lot of questions and … we think it’s up to the city to ask those questions.”

SDG&E sets its monthly wholesale price for natural gas through Southern California Gas, the nation’s largest natural gas distribution company. Both companies are subsidiaries of Sempra, a Fortune 500 energy giant based in San Diego.

SoCalGas and SDG&E officials say the increase in prices is due to a number of factors, including the downing of a pipeline that sends gas from West Texas to Southern California and an increase in demand due to cold weather.

He also cited a US Energy Information Administration report of low pipeline capacity and West Coast inventories below the five-year average. About 90 percent of California’s natural gas comes from outside the state.

The CPUC’s special hearing on natural gas prices is scheduled to last for four hours on Tuesday, February 7. The agenda includes an investigation into the cause of the sudden spike, an overview of the pipeline outage and the impact of higher natural gas prices on electric rates across California.

But groups seeking city council hearings say the increase in Southern California is higher than in other regions.

Pacific Gas & Electric—the investor-owned utility for northern and central California—projects residential energy bills from November 2022 through March 2023 to be 32 percent higher than the same months last year. This works out to about $79 more per month.

While storage levels on the West Coast are about a third below the five-year average, PG&E said levels at its residential and small business customers were near normal as of Jan. 27.

Rose of Public Power San Diego, citing an article in Tucson’s Arizona Daily Star, reports that most Southwest Gas customers in Arizona “will see an average monthly increase of less than $3 starting in February.” Rose also pointed to an executive at Portland General Electric in Oregon, who said that “due to precautionary financial practices to protect customers, including financial hedging, we have been able to keep this increase well below actual market growth.”

“I know gas markets are very regional,” said Rose, “but let’s ask for an explanation of why SDG&E growth is so in sync with everyone else, and as far as we know, it Is.”

SDG&E’s Wagner said, “We don’t have control of the natural gas market.” “This price is determined by the current market and what supports it. We are an intermediary company, which means San Diego Gas & Electric does not profit from the goods. If it’s a dollar, we pay that cost. transfer to their customer in dollars.

Since 1982, California has capped the profits made by electric companies on the amount of electricity they sell to customers. The cost of gas and electricity is provided without surcharge. Instead, the Public Utility Commission sets a predetermined amount that power companies can earn.

Other organizations requesting the City Hall hearing include Protect Our Communities Foundation, Democratic Socialists of America, SanDiego350, Hillcrest Indivisible and Utility Consumer Action Network.

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