California warns of ‘shockingly high’ gas bills as gas prices soar

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Southern California Gas (SoCalGas) has warned its American customers that new gas rates will result in "shockingly high" bills.

SoCalGas, the primary provider of natural gas to Los Angeles and Southern California, announced in a statement that anyone who heats their home with natural gas will most likely see a January bill that is more than double the rate they paid a year ago.

“There’s no easy way to put this: January bills are likely to be shockingly high,” the company said in a statement.

According to the statement, customers can expect to pay 128 percent more in January than they did the previous month. Those who paid around $65 per month last winter should expect bills closer to $160 this year. Those who pay around $130 per month could see their charges increase to $315, according to SoCalGas.

The increases are the result of SoCalGas paying a higher wholesale price for natural gas, which is then passed on to its customers. According to SoCalGas, that price, set by national and regional markets, increased 2.5 times over December's price and is up more than 300 percent from January 2022.

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The company stated that it will make every effort to ensure that low-income customers pay their gas bills, blaming the rising bills on national cold waves and market prices. “While we don’t set these prices (they’re set by regional and national markets), nor does SoCalGas actually profit from rising prices, we want our customers to know that we understand that this may be a shock and a hardship for some,” the statement read.

Natural gas price increases have pushed up electricity bills across the United States. According to the company, this has a direct impact on electricity bills. Because natural gas accounts for approximately 22% of the company's electricity production, when gas prices rise, so do electricity prices.

The cold front that hit North American countries has also pushed up gas prices, as increased demand for gas during extremely cold temperatures has caused prices to skyrocket. Meanwhile, pipeline maintenance in West Texas has contributed to a reduction in supplies from the West Coast to the Rocky Mountains, according to the US Energy Information Administration.

According to the energy information agency, Southern California's natural gas storage is now 25% lower than it was last year, resulting in SoCalGas paying about 227 percent more to buy natural gas this month than in December.

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Although colder winters cause price increases in the United States, "[natural] gas prices don't just double overnight because it's a little colder than last year," according to Jamie Court of Consumer Watchdog.

Court stated that prices are rising in part due to the natural gas supply that has been shipped in the form of liquefied natural gas to Europe, which had been stockpiling in the face of natural gas cutoffs from Russia since that country launched a war on Ukraine in February.

“This is about all the LNG we are exporting to Europe,” Court said. “They’re selling our natural gas to Europe because they get a higher price.” The resultant inventory shortages lead to higher prices for US consumers, he said — and the companies can put on the squeeze because “consumers really need it.”