Utility Relief Is Urged for the Poor

Energy regulators should freeze rates for utilities’ low-income customers to protect them from sharp hikes in winter natural gas bills, advocacy groups testified Thursday at a special hearing of the California Public Utilities Commission.

Increases for other residential ratepayers and small businesses shouldn’t exceed 20% of current levels during the coldest months of the year, said representatives speaking for consumers, the poor and the infirm.

Utility executives and consumer advocates paraded a variety of ideas before the four commissioners during the Los Angeles hearing, as PUC staffers reported that typical winter residential natural gas costs for heating, bathing and cooking were projected to rise by 43% in Northern and Central California and 59% in areas served by Southern California Gas Co. Natural gas prices, already rising because of tight supplies and strong demand, jumped to new highs after hurricanes Katrina and Rita closed Gulf Coast production and processing facilities.

Chris Vaeth of the Berkeley-based Greenlining Institute demanded that utility executives share the financial pain of their poorest customers by passing up bonuses and stock options during periods of unusually burdensome natural gas prices.

“I propose that the chairman of each utility come out and say what he will sacrifice,” he said.

The institute, along with other consumer groups, also asked the commission to order a moratorium on gas shut-offs for any customer paying at least 50% of the total monthly bill. The PUC regulates investor-owned utilities, including Southern California Gas, Pacific Gas & Electric Co., San Diego Gas & Electric Co. and Southern California Edison.

Natural gas price surges could put the poor in difficult situations, warned Commissioner Geoffrey Brown.

“Every dime means something in terms of trading off energy against groceries and every other necessity of life,” he said.

Utility executives testified that they hustled earlier this year to secure reserves of relatively low-cost gas. They promised to expand existing low-income programs, which include a 20% rate discount, and to make extra efforts to sign up as many eligible people as possible. A PUC study found that slightly more than 4 million utility customers are eligible to participate in such programs, but slightly more than 3 million are enrolled.

Southern California Gas Senior Vice President Anne Smith said the company was working to get information to customers about how to apply for financial assistance, manage winter bills and improve the energy efficiency of their homes without spending a lot of money on expensive new appliances.

Southern California Gas, which serves 5.5 million customers, won’t cut off service for any low-income ratepayer who makes minimum payments and will suspend the requirement that new customers make two-month security deposits, Smith said.

Participants agreed that California, which produces only 13% of the natural gas it uses, needs to lessen its dependence on imported gas by boosting investments in energy efficiency and renewable fuels such as solar and wind power.

The commissioners said they expected to decide quickly on what mix of programs and financial breaks was needed to ease potential hardships from high natural gas bills over the coming months.