PG&E says your bill could drop by 75% this month after huge winter spike

ByMichael Finney and Renee Koury KGO logo
Saturday, March 18, 2023
PG&E says bills could drop by 75% this month after huge winter spike
PG&E says your utility bill will drop by an average of 75% this month after a huge winter spike in natural gas prices.

SAN JOSE, Calif. (KGO) -- The Pacific Gas and Electric Company (PG&E) says your bill will drop by 75% this month after a huge winter spike.

What goes up doesn't always come down, but PG&E says it will happen this month. As market prices for natural gas drop, PG&E says utility bills will drop too -- by an average of 75% -- a relief to customers still reeling from winter bills.

"It just amazed me how my gas and electricity bill essentially doubled," said Joseph Bell of San Jose.

Bell thought something went awry. His PG&E bill had nearly doubled from $115 in January to $223 last month.

RELATED: Group demands Gov. Newsom hold PG&E accountable for fires, blackouts, wild rates

Reclaim Our Power held a protest at the PG&E conference center as the utility company held a wildfire mitigation conference with Newsom's office.

"So I even asked, could there be a gas leak somewhere?" said Bell.

"My November bill was just $68, and then shockingly in January I got a $364 bill," said Campbell resident Chantel Bourbin.

Bourbin and her family live in an 850-square-foot unit with electric appliances. She told PG&E their bill made no sense.

"I got a representative who said you should probably get more blankets," said Bourbin.

"I was dumbfounded by the bill so I called PG&E and asked what's going on," said Bell.

PG&E said market prices for natural gas spiked this winter as supplies tightened and cold weather drove up demand. Utility bills rose about 32% on average from November to March.

RELATED: Why are natural gas prices high? Utility companies, experts blame everything from weather to storage

Why are natural gas prices so high? PG&E, Southern California Edison and experts blame everything from weather to storage to the CPUC.

In a statement, PG&E refuted concerns it had profited from high prices, saying, "We do not control market prices for gas and electricity and do not mark up the cost of gas and electricity that we purchase on behalf of our customers."

"PG&E gas costs went up 80%, which is a huge increase... it's even worse in Southern California, but PG&E will say -- and they're right -- they're not making money selling us gas," said U.C. Berkeley Energy Economist Severin Borenstein.

Borenstein says West Coast market prices rose more than five times the national average.

The state depends on imports for 90% of its natural gas, and he says several factors reduced supplies. Among them, pipelines serving the west closed for maintenance in November and December.

Unusually cold weather drove up demand on the West Coast and the state still is dealing with long-term strains: a pipeline explosion two years ago already reduced supplies from Texas, and an explosion at a natural gas storage facility in 2015 reduced California's backup supply.

However, Governor Newsom has called on federal regulators to find out whether suppliers deliberately restricted the flow of gas in order to raise prices.

The Federal Energy Regulatory Commission is now investigating. In a letter to Newsom, Commission Chairman Willie Phillips pledged to make the investigation a priority, saying, "If any potential wrongdoing is identified, the Office of Enforcement will pursue those matters, and where appropriate, seek disgorgement of unjust profits and civil penalties."

MORE: Data shows one-fifth of SF metro area households are struggling to pay rising utility costs

The Census Bureau's Household Pulse Survey shows that one-fifth of Bay Area households reduced or forwent basic necessities to pay an energy bill.

"I think an investigation is fully warranted. But I would not be confident that they're actually going to find anything," said Borenstein.

For now, Borenstein says, the crisis should be over.

"I think people are going to get a real break on their utility bills next month," said Borenstein.

PG&E said bills will drop by 75% on average this month, mostly due to lower prices for natural gas. Also, customers are getting an early "climate credit" of up to $91 each under a program to reduce air pollution.

The state Public Utilities Commission is also investigating why gas prices spiked so dramatically and how to prevent it in the future. Many viewers say they still believe they were charged for energy they didn't use. A lot of folks had to go on payment plans. If that's you, contact 7 On Your Side.

Take a look at more stories and videos by Michael Finney and 7 On Your Side.

7OYS's consumer hotline is a free consumer mediation service for those in the San Francisco Bay Area. We assist individuals with consumer-related issues; we cannot assist on cases between businesses, or cases involving family law, criminal matters, landlord/tenant disputes, labor issues, or medical issues. Please review our FAQ here. As a part of our process in assisting you, it is necessary that we contact the company / agency you are writing about. If you do not wish us to contact them, please let us know right away, as it will affect our ability to work on your case. Due to the high volume of emails we receive, please allow 3-5 business days for a response.

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