Experts cite improved weather conditions and related decrease in natural gas demand as contributing to lower market prices
San Diego Gas & Electric Company (SDG&E) today provided customers with an update on natural gas prices. After a significant drop from unprecedented January natural gas commodity prices, market prices for March 2023 are currently trending closer to 2022 prices.
Improved weather conditions and a related reduction in natural gas usage have resulted in lower prices along the West Coast, according to the U.S. Energy Information Administration (EIA), which is charged with collecting, analyzing and disseminating independent and impartial energy information. In addition, the restoration of service to an out-of-state pipeline, which has been offline for two years, is expected to increase supply capacity to the Southwest by as much as 500 million cubic feet per day.
“Although natural gas market conditions are improving, we know the pain of high gas bills is not over. The unprecedented commodity price for natural gas in January is now hitting February bills,” said SDG&E Vice President of Customer Services Dana Golan. “We are here to help our customers with a variety of financial assistance and resources.”
SDG&E’s March natural gas commodity rates will be filed with the California Public Utilities Commission (CPUC) at the end of February. SDG&E does not set the price for natural gas. Instead, natural gas prices are determined by national and regional markets. Natural gas is purchased on behalf of residential and small business customers, and the cost of buying that gas is billed to those customers with no markup. Natural gas prices are updated monthly on customers’ bills.
The markets where SDG&E purchases natural gas remain volatile and sensitive to changing weather and maintenance updates.
What caused prices to spike in the first place?
According to the EIA, several factors contributed to higher natural gas commodity prices:
- Widespread, below-normal temperatures on much of the West Coast, including Washington and Oregon
- High natural gas demand for heating by customers in areas with below-normal temperatures
- Reduced natural gas supplies to the West Coast from Canada
- Reduced interstate pipeline capacity to the West Coast because of pipeline maintenance activities in West Texas
- Low natural gas storage levels in the Pacific Region.
A detailed report about these market conditions can be found here.
SDG&E Offers a Variety of Assistance Programs
Recognizing the impact of unprecedented natural gas prices on families and businesses, SDG&E strives to provide customers with the resources and support they need. Customers are encouraged to take advantage of the following programs:
- The Neighbor-to-Neighbor program, funded entirely by SDG&E shareholder dollars (not ratepayer dollars), provides eligible customers up to $300 to offset their outstanding bills.
- The federally funded Low-Income Home Energy Assistance Program (LIHEAP) offers financial help ranging from a few hundred to a few thousand dollars, depending on household income, size, and past due balances.
- Income-qualified customers can save up to 30% through the CARE program and 18% on their electric bill through the FERA program.
- Log into MyAccount to sign up for Energy Alerts, set payment reminders, and more.
- Customers who wish to have more predictable bills – even out high-bill months with low-bill months – are encouraged to sign up for SDG&E’s Level Pay Program.
Energy Efficiency Savings
- The Energy Savings Assistance (ESA) program offers no-cost energy-efficiency home upgrades to income-qualified renters and homeowners.
- Through the Golden State Rebates program, SDG&E customers can take advantage of incentives of $20-$500 to purchase high-efficiency water heaters, smart thermostats and room air conditioners.
For Information about additional customer assistance programs, please visit sdge.com/assistance.
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions with respect to the future, involve risks and uncertainties, and are not guarantees. Future results may differ materially from those expressed or implied in any forward-looking statement. These forward-looking statements represent our estimates and assumptions only as of the date of this press release. We assume no obligation to update or revise any forward-looking statement as a result of new information, future events or other factors.
In this press release, forward-looking statements can be identified by words such as "believes," "expects," "intends," "anticipates," "contemplates," "plans," "estimates," "projects," "forecasts," "should," "could," "would," "will," "confident," "may," "can," "potential," "possible," "proposed," "in process," " construct," "develop," "opportunity," "initiative," "target," "outlook," "optimistic," "maintain," "continue," "progress," "advance," "goal," "aim," "commit," or similar expressions, or when we discuss our guidance, priorities, strategy, goals, vision, mission, opportunities, projections, intentions or expectations.
Factors, among others, that could cause actual results and events to differ materially from those expressed or implied in any forward-looking statement include risks and uncertainties relating to: decisions, investigations, regulations, issuances or revocations of permits or other authorizations, renewals of franchises, and other actions by (i) the California Public Utilities Commission (CPUC), U.S. Department of Energy, and other governmental and regulatory bodies and (ii) the U.S. and states, counties, cities and other jurisdictions therein in which we do business; the success of business development efforts and construction projects, including risks in (i) completing construction projects or other transactions on schedule and budget, (ii) realizing anticipated benefits from any of these efforts if completed, and (iii) obtaining the consent or approval of partners or other third parties, including governmental and regulatory bodies; civil and criminal litigation, regulatory inquiries, investigations, arbitrations and other proceedings, including those related to the natural gas leak at the Aliso Canyon natural gas storage facility; changes to laws and regulations; cybersecurity threats, including by state and state-sponsored actors, by ransomware or other attacks on our systems or the systems of third-parties with which we conduct business, including to the energy grid or other energy infrastructure, all of which have become more pronounced due to recent geopolitical events, such as the war in Ukraine; failure of our counterparties to honor their contracts and commitments; our ability to borrow money on favorable terms or otherwise and meet our debt service obligations, including due to (i) actions by credit rating agencies to downgrade our credit ratings or place those ratings on negative outlook and (ii) rising interest rates and inflation; the impact on our cost of capital and the affordability of customer rates due to volatility in inflation, interest rates and commodity prices and our ability to effectively hedge these risks; the impact of energy and climate policies, laws, rules and disclosures, as well as related goals and actions of companies in our industry, including actions to reduce or eliminate reliance on natural gas, any deterioration of or increased uncertainty in the political or regulatory environment for California natural gas distribution companies and the risk of nonrecovery for stranded assets; the pace of the development and adoption of new technologies in the energy sector, including those designed to support governmental and private party energy and climate goals, and our ability to efficiently incorporate them into our business; weather, natural disasters, pandemics, accidents, equipment failures, explosions, acts of terrorism, information system outages or other events that disrupt our operations, damage our facilities or systems, cause the release of harmful materials, cause fires or subject us to liability for damages, fines and penalties, some of which may not be recoverable through regulatory mechanisms, may be disputed or not covered by insurers, or may impact our ability to obtain satisfactory levels of affordable insurance; the availability of natural gas and natural gas storage capacity, including disruptions caused by limitations on the withdrawal of natural gas from storage facilities; the impact of the COVID-19 pandemic on capital projects, regulatory approvals and the execution of our operations; changes in tax and trade policies, laws and regulations, including tariffs, revisions to international trade agreements and sanctions, such as those that have been imposed and that may be imposed in the future in connection with the war in Ukraine, which may increase our costs, reduce our competitiveness, impact our ability to do business with certain counterparties, or impair our ability to resolve trade disputes; and other uncertainties, some of which are difficult to predict and beyond our control.
These risks and uncertainties are further discussed in the reports that the company has filed with the U.S. Securities and Exchange Commission (SEC). These reports are available through the EDGAR system free-of-charge on the SEC's website, http://www.sec.gov, and on Sempra's website, http://www.sempra.com. Investors should not rely unduly on any forward-looking statements.
Sempra Infrastructure, Sempra Texas, Sempra Mexico, Sempra Texas Utilities, Oncor Electric Delivery Company LLC (Oncor) and Infraestructura Energética Nova, S.A.P.I. de C.V. (IEnova) are not the same companies as the California utilities, San Diego Gas & Electric Company or Southern California Gas Company, and Sempra Infrastructure, Sempra Texas, Sempra Mexico, Sempra Texas Utilities, Oncor and IEnova are not regulated by the CPUC.