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Bay Area residents face sticker shock as energy prices spike

In an aerial view, a PG&E electrical substation is visible in front of the San Francisco skyline on Jan. 26, 2022. | Justin Sullivan/Getty Images

Get ready for hefty bills after PG&E announced that customers should expect their energy costs to rise about 24% this winter as compared to last. 

Due to statewide policy changes that went into effect on Jan. 1, customers will see a 3% increase in their electricity bill—but the utility says that high demand and low supply of natural gas on the West Coast will drive up prices much higher. Come February, average users can expect their gas bills to be up about $44 per month compared to last year, and electricity up about $23 per month.

“PG&E recognizes our responsibility to serve our customers safely and reliably while keeping their energy bills as low as possible,” PG&E Vice President Vincent Davis said in a statement about the expected bill increases.

The utility points to natural gas “spot” prices that, by the end of the year, were nearly nine times higher in California than the national benchmark, according to the latest data from the U.S. Energy Information Administration (EIA). Meanwhile, gas demand is outpacing supply. Gas prices are especially high in the state for a few reasons, the EIA reported last month, including reduced flows from Canada and West Texas stunting PG&E’s already-low natural gas inventories.

While neither PG&E nor the San Francisco Public Utilities Commission was able to share meter data yet on the impacts of the last two weeks of torrential rain, the utility said colder weather tends to bring higher usage, driving up prices for customers. 

In November, PG&E customers used about 26% more natural gas than the five-year average, according to the utility. And EIA data from mid-December already showed the Pacific region with the highest temperature deviation from normal nationwide. 

The storm has also cut power for 2 million of PG&E’s customers, with around 28,000 still in the dark with more rain, thunderstorms and possible hail expected this weekend.

The National Energy Assistance Directors’ Association (NEADA) also warned about the cost increases late last year, saying that nationwide home heating costs, which have increased 35% over the last two years, are becoming untenable for low-income families. 

The group sent a letter to Congress asking for $5 billion more for a federal program that helps low-income families pay their energy bills.

“For many struggling families, higher prices can mean being forced to choose between heat, food or medication,” NEADA Chair Barb Klug wrote in the letter. “Of even greater concern with rising prices is the amount owed by families to their local utilities.”

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