San Diego, CA

San Diego residents stunned as utility bills more than double this month

Beth Torres
Photo byElnur/123rf

San Diego residents struggling to keep up with high energy bills will need to brace themselves for yet another round of utility rate hikes. San Diego Gas and Electric (SDG&E) just announced their new electricity and gas prices that will take effect starting January 2023.

The biggest increases will be seen in natural gas prices. San Diego consumers can expect to pay more than double for natural gas this year compared to last year.

The natural gas rate per therm in January 2022 was $2.36. SDG&E says consumers can expect to pay $5.11 per therm starting in January 2023. This means the typical residential customer will pay approximately $120 more for natural gas usage.

Electricity prices are also going up. SDG&E says residential consumers will see an increase of about $23 per month for the delivery and generation of electricity.

In this video, CBS 8 San Diego interviews an SDG&E manager about what residents can anticipate in the coming months as energy prices continue to escalate:

Why are natural gas prices skyrocketing?

An article published in Forbes points to four main reasons why natural gas prices have quadrupled in the past 24 months:

  1. The exporting of U.S. natural gas to other countries has grown rapidly.
  2. Skyrocketing European prices (due to the loss of Russian gas imports) have impacted the liquid natural gas market.
  3. The demand for natural gas has depleted inventories to lower than normal levels.
  4. The oil and gas markets are impacted by uncertainty and fear, such as the fear of a recession or supply shortages. These can cause price hikes in both marketplaces.

What SDG&E says about high energy costs

SDG&E acknowledges the challenges many consumers will have in coming up with the money needed to pay for the increased energy costs.

However, the company is quick to point out that they do not mark up the price they pay for natural gas when they charge consumers. They say they simply pass along dollar-for-dollar what they pay to residential customers.

The utility company cites many factors that have recently increased natural gas prices. This includes a colder than normal winter, an increased consumption demand following the global pandemic, increased costs due to strengthening the electric grid, and Russia’s war in Ukraine.

One of the more surprising reasons they say that San Diego utility bills are soaring is that consumers have done a good job of conserving energy. According to a statement published by SDG&E:

"Another factor impacting SDG&E electric rates is declining sales. This is a tough one to explain. Because of our mild weather and the amazing job customers have done with conservation and solar installations, less electricity is being used. Less electricity use means the cost of the power grid is spread across fewer electricity sales (kilowatt-hours), which results in higher rates. Without this decline in electricity sales over the past decade, rates would be about 17% lower. Many water utilities in San Diego are facing this same challenge."

What are your thoughts on San Diego’s soaring utility prices?

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