The Long Beach Utilities Department will create a fund to offset residents struggling to afford soaring natural gas prices — which tripled from December to January — the City Council decided during a special meeting on Wednesday, Feb. 1.
Long Beach Utilities — the city’s independent gas provider — alongside energy giant Southern California Gas Company, a subsidiary of Sempra Energy that serves more than 21.8 million customers in Central and Southern California, initially warned customers about the projected natural gas cost spike in early January.
“Residents and businesses in Long Beach, Signal Hill and throughout Southern California will see a drastic increase in their natural gas bills this month as global market prices hit a 20-year high,” the Long Beach Utilities Jan. 4 news release said. “This follows already higher-than-average bills in December, when the price of gas doubled from November. The price tripled from December to January.”
Though gas bills tend to increase slightly during the winter, this year’s unprecedented price hikes were largely attributed to a slew of interconnected reasons including the California drought, unexpected severe cold snaps across the country, and Russia’s war in Ukraine, and reduced natural gas storage reserves on the West Coast.
Though both companies have said they do not make a profit off of the price hikes, many Southern California residents have been dealt nearly two months of unaffordable natural gas bills — putting an additional strain on already financially-burdened groups, including those with disabilities, seniors, and fixed-income individuals.
“We have a crisis as it relates to high natural gas bills here in Long Beach and across California — it’s a short-term, temporary spike but impactful nonetheless,” Mayor Rex Richardson said during the meeting. “Nonetheless, we know that families are struggling to make ends meet (as) folks are still working to recover from the impacts of the COVID-19 pandemic.”
Jane Duane, a senior who lives alone in Seal Beach, said her January bill from SoCalGas totaled $461.91 — despite her efforts to offset her natural gas usage by reducing her thermostat to 65 degrees and doing laundry less often.
“It’s very sad because it’s putting stress on people that don’t need it,” Duane said in a Tuesday interview, noting that her bill was about $200 more compared to the same time last year. “I’m speaking for other seniors, which I’m mainly doing because I am financially okay — but I am also far from being on the wealthier side.”
The Long Beach City Council’s Wednesday evening decision, meanwhile, will attempt to offset costs for individuals like Duane.
Long Beach’s revenue from its 5% utility users tax on natural gas — which is applied to every local customers’ total gas bill amount at the end of each month and adds to the city’s General Fund — has also seen an unexpected rise along with the prolonged bill hikes.
City staff estimate that Long Beach’s UUT revenue could increase by $1.5 million more than initially anticipated due to the unprecedented two-month price increases, according to a Feb. 1 staff report. With that extra money, Long Beach Utilities will establish a financial relief fund for those most burdened by the additional costs.
“Essentially we will take any unexpected UUT — anything that is abnormal that is being generated because of the gas spike — (we will use to) create a program in our utilities department,” City Manager Tom Modica said.
The City Council’s OK allow the City Manager’s Office to work with the Utilities Department and the Utilities Commission , who are expected to call their own special meeting in the near future to establish the details of the financial assistance program.
In the meantime, there appears to be some slight relief on the horizon — with Long Beach’s gas prices expected to drop by 66% throughout February, according to LB Utilities general manager Christopher Garner.
“Even though the price is still high, bills are still going (probably) to be a little less than they were in December,” Garner said Wednesday. “But in Long Beach, we will have the lowest or near lowest gas utility bill for a single family home in the state of California in February.”
SoCalGas prices are also set to drop about 68% in February, according to a Jan. 31 news release. If a customer had a $300 bill in January, that same usage will cost about $135 in February, for example.
Both companies, meanwhile, have advised natural gas users to lower their thermostats three to five degrees — which can result in up to a 10% reduction in heating costs. Washing clothes in cold water, limiting hot showers, turning down the temperature on your water heater, and limiting use of non-essential natural gas appliances may also help slightly.
Long Beach Utilities is also reviewing their current strategies to help mitigate the impacts on consumers by renegotiating some of their local gas supply contracts and using $1.3 million in reserves to offset customer costs, the department said previously.
There are several resources currently available through LB Utilities to help manage higher costs, including payment plans and reduced rates for seniors, those with disabilities and other income-qualified customers. SoCalGas has similar assistance programs available for its customers. More information about those programs available on both companies’ websites.
