Southern California Gas Company (SoCalGas) provided customers with an update on natural gas prices across the West Coast. After a significant drop from unprecedented January natural gas commodity prices, market prices for March, 2023 are currently trending closer to 2022 prices.
Improved weather conditions and a related reduction in natural gas usage have led prices to continue to fall along the West Coast, according to the U.S. Energy Information Administration (EIA), which is charged with collecting, analyzing and disseminating independent and impartial energy information. In addition, the restoration of service to the out-of-state pipeline, which has been offline for two years, is expected to increase supply capacity to the Southwest by as much as 500 million cubic feet per day. However, the markets where SoCalGas purchases natural gas remain volatile and sensitive to changing weather and maintenance updates.
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“It is still too early to tell if this positive trend will continue, but with warmer weather ahead, we do not expect to see price swings as large as we saw earlier in the winter,” said Gillian Wright, chief customer officer for SoCalGas.
Consistent with regulatory requirements, SoCalGas will file March core procurement prices (rates) with the California Public Utilities Commission (CPUC) at the end of February. The core procurement rate reflects the price SoCalGas pays for natural gas for residential and business customers. That rate changes each month. SoCalGas does not set the price for natural gas. Instead, natural gas prices are determined by national and regional markets. SoCalGas buys natural gas in those markets on behalf of residential and small business customers, and the cost of buying that gas is billed to those customers with no markup.
The markets where SoCalGas purchases natural gas remain volatile and sensitive to changing weather and maintenance updates. For example, consistent with applicable rules and regulations, SoCalGas issued a notice Tuesday about a about a safety related condition resulting in a capacity reduction on another natural gas pipeline – Line 235.
SOURCE: PR Newswire