SAN DIEGO — San Diego Gas & Electric (SDG&E) customers could see a major dip in their gas bills next month after prices for the commodity hit historic highs during December and January.
The February wholesale price for natural gas is set to drop by about 68% this month compared to January, according to SDG&E, plummeting to about $1.11 from $3.45 per therm.
With this change, SDG&E says gas bills for typical residential customers are expected to be about $100 less this month than last.
The steep gas prices over the last couple of months have been largely driven by high demand caused by particularly cold weather in California coupled with a diminished supply of natural gas, given a partial closure of one of the region’s major third-party pipelines and limited storage in California.
Natural gas storage inventories for states along the Pacific were about 30% below the previous five-year average in December, according to the U.S. Energy Information Administration.
Meanwhile, natural gas consumption nationwide hit a record high nationwide in December of last year as a winter storm swept the country, with nearly 141 billion cubic feet of gas used in a single day based on data from the USEIA. The previous record in consumption was 137.8 billion cubic feet used in a single day back in January 2018.
As the majority of western states’ natural gas supply comes in from other parts of the United States and Canada according to the energy administration, lower-than-normal natural gas deliveries put additional pressure on the energy source as demand increased, pushing prices up.
In December, natural gas deliveries to the region were down by about 4% from November, according to the USEIA.
Notably, during this time, the Permian Highway Pipeline out of West Texas underwent a partial closure for maintenance, decreasing natural gas flows westbound from the supplier by about 3%.
While the dip in prices will bring some relief for SD&GE customers, overall natural gas costs are still elevated in the West, as temperatures remain below average.
“Lower gas prices are certainly welcome news, but we recognize many of our customers still need support to deal with higher gas bills, and we’ve developed solutions to ease the financial strain,” SDG&E Vice President of Customer Services Dana Golan said in a press release. “We are here to help and encourage customers to take advantage of our assistance programs, bill discounts and energy efficiency programs that can help provide additional bill savings.”
People can learn how to cut on their winter energy bill at the SDG&E website.
SDG&E encourages customers experiencing financial difficulty to take advantage of assistance programs, including bill discounts, debt relief and payment plans.
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