Some residents find natural gas price hike ‘extreme’

Originally published Jan. 20, 2023

By Braden Cartwright
Daily Post Staff Writer

Palo Alto residents are paying four times as much for natural gas in January than they did in the summer and the winter before, and the average bill is going up by $80 to $100, city officials said.

Bob Foley, who lives in the Old Palo Alto neighborhood, said he was shocked to look at data.

The “extreme” increase is driven by higher natural gas costs from suppliers across the West Coast, city spokeswoman Meghan Horrigan-Taylor told the Post.

The market is highly volatile right now because of supply constraints, low amounts of gas in storage and the weather, she said.

The city buys natural gas from four suppliers: EDF, BP, ConocoPhillips and Shell, Horrigan-Taylor said.

The city sets its prices at the end of each month based on an index by Natural Gas Intelligence, a subscription service that tracks prices on the West Coast.

Council members voted on Dec. 19 to double the cap on natural gas rates from $2 to $4 per therm. They also raised electricity rates by 20% for the average resident, bringing the median monthly bill up by $17.15, Director of Utilities Dean Batchelor told council.

The city paid suppliers $3.94 per therm for gas that is delivered from Malin, Ore., and $4.97 per therm for gas that is delivered through PG&E’s local transmission system, Horrigan-Taylor said.

The city actually paid more for natural gas than its customers did in January, and reserves were used to make the price increases less extreme, Horrigan-Taylor said.

The city is planning to offer six-month payment plans for people who need more time to pay their winter gas bills, she said. People can also go to the library to warm up, she said.