Southland Gas Bills Will Take Another Modest Drop

Southland gas bills will take another modest drop this summer as natural gas prices continue to fall.

The state Public Utilities Commission authorized Southern California Gas Co. and San Diego Gas & Electric to reduce their gas rates to reflect their lower cost of buying natural gas. As a result, Southern California Gas will trim its rates by $102.2 million, a 2.1% reduction. SDG&E;’s cut will total $37.4 million, or 6.7%.

The new rates will reduce the typical monthly summer gas bill for Southern California Gas’ residential customers to $22.36 for 36 therms of gas, a $1.51 savings. The typical winter bill for 88 therms will fall to $42.30, or $1.76 less a month.

SDG&E; said its residential customers’ typical monthly year-round bill for 40 therms of gas, plus 400 kilowatt-hours of electricity, will drop to $66.19, a $1.16 drop. The average bill peaked at $72.75 in December, 1983, according to Dave Dohren, the utility’s director of finance and rates management.

Los Angeles-based Southern California Gas said its residential customers will receive the entire decrease in the lowest rate it offers, the so-called baseline rate. The rate applies to an allotment of energy based on the climate in the customer’s zone. Gas usage exceeding the allotment is billed at a higher tariff, which will not be affected by the PUC action. SDG&E;’s reduction will affect both rates.

The PUC allows utilities to seek rate adjustments twice a year to reflect changes in the cost of gas and in the amount sold. The adjustments are calculated to enable utilities to recapture their actual costs of buying gas in an increasingly volatile market. They are not supposed to increase or diminish company profits.

For about the last two years, the adjustments have decreased rates as Southern California Gas, which supplies SDG&E;, has been able to renegotiate contracts with suppliers in the Southwest and Canada.

Southern California Gas, like many other gas utilities, had entered into high-cost contracts with suppliers after several winters of shortages to ensure adequate supplies. The new round of reductions results primarily from renegotiated contracts with the suppliers, which now have an oversupply of gas.