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Higher Gas Bills Expected in March

The state's utilities warn that residents and small businesses will feel the effects of the prolonged East Coast cold snap.

February 28, 2003|Nancy Rivera Brooks and Elizabeth Douglass | Times Staff Writers

The East Coast's bitter cold may be thousands of miles away, but Californians will feel some of the chill in their March heating bills.

Southern California Gas and PG&E Corp.'s Pacific Gas & Electric, California's two largest gas utilities, warned Thursday that residential and small-business customers will see a 12% to 24% jump in their next gas bills because the prolonged East Coast cold snap sparked a nationwide spike in natural gas prices.

The average Southern California Gas residential customer will see bills rise nearly 22%, to about $67 from about $55 in February, according to the company, a subsidiary of San Diego-based Sempra Energy.

For a small business using 300 therms a month -- a category covering about 70% of SoCalGas' business customers -- the monthly bill will rise about 20%, to $330 in March from $275 in February, SoCalGas spokeswoman Denise King said. A medium-size business using 4,100 therms a month would see a 24% increase to $3,800 from $3,050 in February, she said.

PG&E spokesman Jason Alderman said the utility's average residential natural gas customer can expect a 12% increase in the March bill to $69.27 from $61.76 in February. The utility did not release figures for businesses.

Winter storms and freezing temperatures have increased demand for natural gas so dramatically that supplies in the East are running at their lowest levels since early 2001, when storage in the West hit record lows. Nationwide, stores of natural gas fell 13% last week and have fallen nearly 50% below levels at this time last year, according to figures released Thursday by the Department of Energy.

The natural gas futures contract for March hit a record $11.899 per million British thermal units on the New York Mercantile Exchange on Tuesday. That contract expired Wednesday. Gas for April delivery rose 10 cents Thursday to $7.49 per million BTU.

Though the biggest increases have been in the East, the strain has pushed prices up in the West too -- to $7.53 on Thursday, down from Tuesday's peak price of $10.75. Unlike electricity rates, the price that customers pay for natural gas fluctuates monthly.

SoCalGas and PG&E primarily serve homes and small to medium-sized businesses. Big businesses and institutions generally contract for their own natural gas supplies.

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