Natural Gas Prices Soar as SoCalGas Faces Fines

By Justin HAGER 

Many SoCalGas customers discovered a disheartening surprise recently when they found their natural gas bill had exploded by as much as 200% from one year ago. Voicing their concerns over social media applications like Facebook and Nextdoor, local residents described how massive rate hikes in December and January were unexpected when compared to more steady, but smaller, increases in previous months.

Natural gas prices are heavily regulated in California with the California Public Utilities Commission (CPUC) calculating and approving rates based on (1) the cost of natural gas on the international market, (2) transportation costs and (3) public-purpose surcharges that fund natural gas related programs. And according to SoCal Gas’ Natural Gas Rates Explained page, only about 8% of billed revenue goes toward a return on SoCalGas’ investment in the gas system.

Two rate changes approved by the CPUC in 2019 went into effect on Jan. 1, 2022 leading, in part, to the dramatic increases. The rate changes included an updated transportation rate and an updated commodity procurement rate designed to support infrastructure upgrades and energy diversification. Combined, these increases have led to a 110% increase in the base procurement rate for natural gas compared to one-year ago. Adding to the cost of these base procurement increases is an outage in a pipeline that delivers natural gas from Texas to Southern California and low inventory and storage levels that have remained as the ongoing COVID pandemic and last year’s crippling cold snap in Texas caused massive disruptions to production. Add to these factors a relatively harsh winter across the Midwest and northeast and the result is that natural gas prices are high across the country as demand outpaces supply.

Of course, the optics of increased prices couldn’t come at a worse time for SoCalGas. The company has faced a string of lawsuits and fines recently, including a $10 million fine handed down last Thursday by the CPUC for improperly using ratepayer money to lobby public officials and fight against standards designed to make homes and businesses more energy efficient. Just days before the fine was issued, SoCalGas agreed to a $1.5 million settlement that alleged that it failed to warn customers about possible exposure to toxic chemicals. And last year, the company agreed to a $1.8 billion settlement over the 2016 Aliso Canyon facility blowout.

Fortunately for consumers, the coldest parts of winter are largely over and production facilities are learning new ways to adapt to the ongoing COVID pandemic, meaning that natural gas prices should begin decline in the coming months.

SoCalGas offers several energy-saving tips on its website at

For people struggling to pay their utility bills, SoCalGas and the state of California also offers a number of assistance programs. More information on assistance programs can be found at: