Homeowners Burned by Big Gas Bills After Winter’s Chill

Four million residential customers of Southern California Gas Co., including 675,000 in Orange County, are receiving record-high December gas bills--some of them five times normal--because of both a recent cold snap and a state law that heavily punishes households for using gas above a so-called “baseline” level, officials said Tuesday.

“We have people receiving their biggest home heating bill ever, and I can tell you customers don’t like it,” said Rich Puz, a spokesman for Southern California Gas.

“People just getting their bills now will see a very high bill, including those last cold weeks in December and one pretty cold week of January.”

‘Second Tier’ of Pricing Blamed

In Orange County, Southern California Gas Co.’s residential customers can expect to see their bills triple to an average of about $100 a month, said company spokesman Bob Hird.

The huge bills occurred because many people kept their thermostats turned up for several extra hours each day during the cold spell, catapulting them into a special “second tier” of gas pricing that costs almost three times as much as the normal rate, utility officials said.

Puz said customers in December used nearly 50% more gas than in the same period last year. Although gas rates went up slightly in January, 1987, Puz said the rate increase was responsible for only a fraction of the dramatic jump in costs in December’s bills.

Jim Taylor, a gas company spokesman, said customers using 72 therms or less per month are charged 35 cents per therm. But when a household uses more than the baseline of 72 therms, the extra therms cost 95 cents each--nearly three times the usual cost.

“The more gas you use above the baseline, the higher and higher your costs get, and it just really expands,” Taylor said.

Gas officials said they are being swamped with calls from puzzled and irate customers who were unaware of the special higher rate because they rarely use their heating systems as much as they have in the last few weeks.

One customer, Venetta Luke, 70, of Costa Mesa, received a January gas bill for $158, about five times normal.

“It was ridiculous,” Luke said. “I’d never seen a bill like that in my life. I wondered what had happened.”

Luke, a retired secretary confined to a wheelchair with polio, shares a house with her 90-year-old uncle, Edward Luke, a retired machinist.

“We’re not like these people pulling down big salaries,” Venetta Luke said. “We only have Social Security coming in,” which is $1,100 a month, she said.

‘Have to Keep Warm’

Luke added: “We’ve tried to cut back (on gas use). But it’s been so excessively cold this year. . . . We have to keep warm.”

Janice Bay of South Pasadena said she received a gas bill of $395 for December, compared to her bill of $42 in November, even though she was gone nearly two weeks for a Christmas vacation.

“I don’t understand how our bills can be as much as the bills my parents get back East where it’s zero degrees,” she said. “We have just a regular four-bedroom house, and while we were gone the heat was completely shut off.”

In fact, utility officials themselves said they don’t think the skyrocketing bills are fair.

Puz said the gas company “would like to see this bizarre system changed.”

He said the two-tier system was adopted by the state Legislature in 1982 following a nationwide increase in energy costs and was meant to discourage Californians from using excessive amounts of gas and electricity by heavily charging them for excess usage.

Under the current system, Puz said, households that manage to stay below the 72-therm baseline--thus paying just 35 cents per therm--are being heavily subsidized by households who go above the baseline.

‘Getting a Really Good Deal’

“Anybody under 72 therms is paying less than the cost of providing the service and is getting a really good deal, and the ones who go way past 72 therms are paying far more than actual cost,” said Puz.

Carole Kretzer, spokeswoman for the PUC, said, “The object of the game was to encourage everyone to conserve energy and at the same time ensure you of a certain minimum amount of energy at a low cost.”

She said the 72 therms was based upon “the minimum that a family living in a small, well-insulated home would need.”

Kretzer said the two-tier system has been effective in inspiring conservation in Northern California, where past cold winters have trained customers to prepare for huge gas bills.

But in Southern California, she said, “I don’t think we’re quite as aware of it . . . but it only has to happen once for people to be aware of it next time.”

“We get flooded with calls because people can’t believe that they used that much,” she said. “People see that their usage has doubled over last year and think their bill should only double, but that’s not how it works.”

Currently, she said, the Public Utilities Commission is preparing a plan to make major changes in the rate structure to bring the charges in line with the actual costs to customers.

Plan to Change Rates

Kretzer said the commission can work within the existing state law to bring the gas rates closer into line with the actual costs to individual households.

One plan is to lower the second-tier price of 95 cents per therm and then charge all customers a fixed monthly fee that more accurately reflects ongoing costs of maintenance and overhead.

Kretzer said the PUC is particularly concerned that the two-tier system will drive away large industrial users, “and if they leave, other customers would have to pick up the costs.”

Meanwhile, the high gas bills are a particularly hard blow for low-income people, said Rudy Berru, who operates a utility bill subsidy program for the Community Development Council, Orange County’s anti-poverty agency.

“We’re pretty well overloaded,” Berru said. “Requests for assistance are running about 20% higher than they did last year.”

Robin Lee Gaskell of Santa Ana, faced with a shut-off of gas service in five days, walked into the CDC office in Costa Mesa on Tuesday and persuaded Berru to pay her $115 gas bill.

“I just wasn’t able to pay the bill,” said Gaskell, a single mother who lost her job as a secretary two months ago. “I’m from Massachusetts, so the cold doesn’t bother me. But it’s another thing for my daughter Jennifer.”

Efforts to Reduce

Gaskell said that she had fallen two months behind in her payments to the gas company and that her bill had ballooned even though she had tried to reduce gas use.

“We don’t use it during the day, and we only use it lightly at night,” Gaskell said. “But I guess we weren’t doing a good enough job.”

At Lutheran Social Services in Garden Grove, about 10 people a day come into the office seeking help to pay their gas bills, and an equal number phone in, said spokeswoman Bonnie Miller.

“The bills are very high, usually over $100,” Miller said. “And sometimes people let the bill build up over three months because they don’t know where to turn.”

Lutheran Social Services offers a maximum of $20, Miller said. “And we do that only if it will forestall having service cut off.” But, she added, “a lot of times the gas company tells us that sending in the $20 won’t do any good; that usually happens when people fall a couple of months behind.”

Utility officials said customers who are convinced that their bills are incorrect should contact the gas company. Taylor said company employees will inspect a household’s gas system for leaks or other problems.

“If you don’t think the second tier rate is responsible, we would want to have those people call the gas company,” he said.

“Hopefully,” Lutheran Services’ Miller said, “we won’t have too much more of this cold weather, and things will improve. I don’t think people can stand too much more of the kinds of skyrocketing bills we’ve seen for the last month or two.”

WHY GAS BILLS SOAR Doubling gas usage can triple a gas bill for a typical household. November: In 30 days, a household uses 82 therms of gas. The first 72 therms are charged at the state-mandated “baseline” fee of 35 cents per therm, for a cost of $25.20. The additional 10 therms above baseline are charged at 95 cents per therm, for a cost of $9.50.

COST: $34.70.

December: In 30 days, a household uses 182 therms of gas due to extreme cold. The first 72 therms, charged at 35 cents each, cost $25.20. The additional 110 therms, at 95 cents per therm, cost $104.50.

COST: $129.70.

Source: Southern California Gas Co.