Natural Gas Rates Explained
How is My Natural Gas Bill Calculated?
Our rates are regulated by the California Public Utilities Commission, or CPUC, based on three components:
- Procurement Costs – The cost of the natural gas itself
- Transportation Costs – The cost of natural gas delivery
- Public Purpose Surcharge – The cost to fund natural gas-related programs
Overall, about 92% of your bill goes toward products and services provided to you essentially at cost, with the remaining eight percent going toward a return on SoCalGas’ investment in the gas system.
More information about how these charges are reflected on your bill can be found here .
How are Rates Calculated?
- SoCalGas analyzes the future needs of the natural gas system and estimates the funding needed for the next three years to upgrade utility infrastructure, operate systems safely, invest in new technology and provide responsive customer service.
- During the process, the CPUC also analyzes the rate increases required by Public Purpose Programs, such as those mandated to assure natural gas service remains accessible to customers with low incomes.
- The CPUC takes about two to three years to hold public hearings, open comment periods and formal sessions before an administrative law judge. They also need that time to analyze the input gathered.
- Public advocates comment on both the plans for the natural gas system and their proposed costs and raise issues they believe to be in the public’s interests.
- After its analysis, the CPUC determines SoCalGas’ budget for the next three years.
- As a final step, the CPUC decides how to divide the increased need for funding into different rate increases to be paid by the different categories of natural gas customers.
- Commercial and industrial users usually fund a larger part of the rate increases because of their heavier demands on the system.
- Residential rates are split into “tiers,” and customers who use more natural gas pay a greater percentage of the funding needed to operate and maintain the natural gas system.
What Rate Changes are Planned?
- August 2016
- An increase in costs to fund major investments and improvements to SoCalGas’ system through the three year General Rate Case (GRC) application process.
- A small decrease due to the Transmission Integrity Management Program cost adjustment.
- September 2016
- Pipeline Safety Enhancement Program (PSEP) and TCAP Phase I implementation in September, 2016: A small increase to address the allocation of updated storage-related costs to customer classes costs for storage operations.
- January 2017
- A decrease in the residential baseline rate by $0.098 per therm from the 9/1/2016 rate and a decrease in the residential non-baseline rate.