LOS ANGELES — As a winter storm bears down on Southern California, inspiring customers to crank the heat and add to already burdensome winter bills, SoCalGas is taking steps to increase rates.
On Friday, the natural gas utility for 22 million customers in the southern part of the state said it will hold a public forum on its application to raise prices starting in 2024.
The utility filed its application with the California Public Utilities Commission in May 2022, before the recent spike in natural gas costs. Still, the requested increases are likely to draw outrage as SoCalGas seeks to increase revenues by 20.2%, or $738 million, compared with 2023 levels in 2024.
The application requested further increases of 6.7% in 2025, 5.6% in 2026 and 7.7% in 2027.
As the regulatory agency that oversees utility rates in the state, the CPUC will consider the proposal over the next few months.
If approved, customers will see the new prices starting on Jan. 1, 2024. SoCalGas said an average residence using 36 therms per month would see an increase of about $8.28 or 13.2% per month in 2024 compared with 2023, though it cautioned individuals’ costs may vary.
Many customers are already struggling with bills that have more than doubled this winter.
Natural gas prices in 2022 were 66% higher than in 2021, according to the U.S. Energy Information Administration.
Commodity costs account for about 20% of an average residential customer gas bill, according to the CPUC. The rest is largely because of the cost of delivering gas to customers, including infrastructure, and so-called public purpose charges subsidizing programs that help offset natural gas costs for lower-income customers.
While the price of natural gas is determined by regional and national markets and passed directly to customers with no markup or profit, prices have been significantly higher than normal lately because of a colder-than-average winter, geopolitical risks associated with Russia’s invasion of Ukraine and high demand for natural gas in the U.S. electric power sector.
In a notice it sent to customers Friday, SoCalGas said it is requesting the rate increases to invest in its gas delivery system and technologies that advance clean energy, enhance safety and reliability, meet regulatory and compliance requirements and maintain its workforce.
SoCalGas is holding two virtual public participation hearings about its proposed rate increases on March 6 and March 15.
