Most Long Beach residents received an unwelcome surprise in their mailbox this month—huge spikes in their natural gas bill, ranging from $300-800 bills in some cases.
Long Beach Utilities addressed the City Council Tuesday night to explain the cause of the dramatic increases and share its plans for mitigating the costs to residents. The average gas bill for a single-family home in January 2022 was $60. That price has now risen to roughly $250.
“We want to make sure that we don’t sugarcoat this. This is a crisis and we want to make sure the public knows that,” said Chris Garner, general manager for Long Beach Utilities.
The increase coincided with the City’s transition to combine gas, water and sewage under one department, Long Beach Utilities, which oversees the operations and purchasing of natural gas. Voters approved the change in November, 2022.
Long Beach gas bills are broken up into five categories
- $5.10 fee for a daily service charge
- 74 cents per therm (the quantity of heat it takes to increase temperatures by one-degree Fahrenheit) of Tier I usage
- $1.07 per therm of Tier II usage
- Assembly bill 32, Global Warming Solutions Act fee, which rises and falls with the price of gas
- Cost of gas, set by the market price index
Garner said that the increase is due to the “largest price we’ve ever paid” for imported natural gas from West Texas, the Rocky Mountains and Canada. This price follows the market price index for all of California, and doubled from November to December, then tripled from December to January, sitting at $47 per 100 cubic feet of natural gas as of Jan. 3.
Market prices have increased throughout California due to colder weather than usual, repairs to the interstate pipelines which transport natural gas across the country and the ongoing drought, which has reduced the supply of hydroelectricity.
Garner said that Long Beach Utilities “is not making a single dime” off the natural gas price increases, explaining that SoCal Gas—California’s main natural gas supplier—saw similar increases. Since the start of January, natural gas prices have dropped by about 50%, “which is still much higher than usual,” Garner said.
Long Beach only gets 5-10% of its gas locally, and California’s natural gas reserves are at a five-year low, according to Garner.
In order to prepare for future increases, Garner said the department is looking into purchasing more gas locally and from reserves, which is lower than market rate prices. Utilities applied $1.3 million from its reserves in January in hopes of mitigating the impact on residents.
The department will also look into buying cheaper gas during warmer months and keeping it in local storage, as well as negotiating local gas contracts and price hedging.
“We’re at the end of the pipeline system,” Garner said. “We have a huge demand in California and you combine that with having to import 90% of our gas supply, we’re pretty much captive to the marketplace.”
Residents who saw large increases in their bill and may struggle to pay it can call Long Beach Utilities at 562.570.5700 to sign up for a payment plan, which can span as long as three years. Seniors and disabled residents also qualify for a 20% discount on their bill, which they can sign up for by calling Long Beach Utilities.
Long Beach has a moratorium on gas shutoffs, so no resident should be in danger of losing their natural gas supply in their homes.
Resident Dave Shukla urged the City Council to automatically apply the discounts to seniors and disabled residents, who may not be aware of the program.
“Don’t wait for low-income people to call you,” Shukla said.
Councilmember Al Austin asked if the utility user’s tax, which is applied to resident’s gas, water, electricity and phone bills, can be refunded back to customers instead of going into the City’s general fund. The four utility taxes make up 7.8% of Long Beach’s general fund, roughly $38.9 million.
City Manager Tom Modica said that staff would have to look into that possibility and report back to city council.
