Southern California Gas Co. (SoCalGas) will use $10 million in shareholder funding to help customers with bill assistance and to bolster community resources for those who may be struggling financially.
The company committed $5 million in shareholder funding to the Gas Assistance Fund, a program administered by the United Way that provides income-qualified customers with one-time grants to help pay their natural gas bills.
The contribution is the largest in the fund's 40-year history and will help the United Way expand access to the program to thousands of additional Southern Californians this winter.
SoCalGas also announced it will contribute to its Fueling Our Communities program and a Restaurants Care Resilience Fund.
Expanded Access to Gas Assistance Fund
SoCalGas's latest contribution to the Gas Assistance Fund will help the United Way expand income eligibility for the program and increase the grant amount available to each qualified customer from $100 to up to $400 for the remainder of the 2023 program.
Additionally, income-eligible older adults (55+) and those facing certain financial hardships may be eligible for extra grant funding.
Market Conditions Improve
After a significant drop in February from January's unprecedented natural gas commodity prices, market prices for March 2023 usage are currently forecasted to be significantly lower than February's prices.
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.
Consistent with regulatory requirements, SoCalGas will file March core procurement prices (rates) with the California Public Utilities Commission (CPUC) at the end of February.
The core procurement rate reflects the price SoCalGas pays for natural gas for residential and business customers. That rate changes each month.
SoCalGas does not set the price for natural gas. Instead, natural gas prices are determined by national and regional markets. SoCalGas buys natural gas in those markets on behalf of residential and small business customers, and the cost of buying that gas is billed to those customers with no markup.
What Caused Prices to Spike in January?
According to the US Energy Information Administration (EIA), a number of factors have 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 and the Rocky Mountains;
- Reduced interstate pipeline capacity to the West Coast because of pipeline maintenance activities in West Texas (the out of state pipeline mentioned earlier in this news release); and
- Low natural gas storage levels on the West Coast.
According to the EIA, the U.S. set a natural gas consumption daily record on Dec. 23, 2022, further exacerbating supply and demand challenges.