Local News in Brief : Gas Cost Restructuring

Many residential customers of two of the state’s three largest gas utilities will face higher bills under a restructuring approved Wednesday by the state Public Utilities Commission that will favor business clients.

But nearly all customers of Southern California Gas Co., which serves the Los Angeles area, will share in a $212-million rate decrease, due to past overestimates of the company’s payments to its suppliers. The reduction, however, will be only 3% for residential customers and 24% for most commercial customers, the PUC said.

Meanwhile, Pacific Gas & Electric Co. residential customers must pay 11.6% more for gas starting May 1, while rates will be lowered for most of its commercial customers, the PUC said. San Diego Gas & Electric Co. residential customers face a 6.5% gas rate increase, contrasted with a 1% increase for commercial customers.

In each case, the PUC explained that it is moving toward “cost-based pricing,” in which rates are based on the cost of providing service.

It costs less to provide large amounts of fuel to a single business than it does to provide the same amount to many residences. Under the old rate structure, business and industrial customers have been subsidizing residents, the commission said.