CPUC Announces 2023 Natural Gas Climate Credit to Apply Two Months Early

After days of public and political pressure, the California Public Utilities Commission (CPUC) announced on Thursday that the California Climate Credit 2023 will be granted two months earlier than usual to help fight high gas prices across the state.

The climate credit, which typically comes from gas companies buying carbon permits through the state, is typically around $60-$100 to offset each eligible household’s gas bills starting in April. Since the end of 2022, natural gas prices in California have risen steadily. However, cooler-than-usual temperatures across the state, combined with low natural gas supply on the west coast, have seen bills double or more in the past few months. According to SoCal Gas, the “price of gas for basic purchases” is up 314% year-over-year. PG&E also noted similar price spikes.

Under pressure from state, local, and public lawmakers, the CPUC quickly took action that would increase the amount of climate credit it could provide. This week, many lawmakers seized on it, who urged them to pass it to make life easier for Californians due to higher prices. Those lawmakers included Republicans in the Senate, who on Monday sent a letter to the CPUC asking for higher climate credits in Thursday’s vote.

“We respectfully request that the California Public Utilities Commission accept the proposal for the California Climate Credit 2023 and authorize the loan to be disbursed as soon as possible,” said GOP Senators, led by Senate Minority Leader Brian Jones (R-Santi). Monday. “California is facing natural gas bills that are double and even triple the normal cost. These high gas bills exacerbate the financial hardship California families already face, such as rising inflation and the high cost of living.”

“We understand that supply and demand factors affect the cost of natural gas, but we are also mindful of regulatory actions that drive up costs. Thus, we call on the Commission to adopt Item 24 “Rescheduling Climate Credits for Electricity and Gas” at its meeting for a vote on February 2, 2023.”

On Thursday, the CPUC listened to lawmakers and the public by passing an emergency proposal. A climate credit of approximately $90-$120 will be automatically applied to gas bills as soon as possible. Pacific Gas and Electric (PG&E), Southern California Edison, San Diego Gas & Electric, and Southern California Gas Company (SoCal Gas) customers will be directly affected, while Bear Valley, Liberty, PacifiCorp, and Southwest Gas customers will receive an accelerated loan. instead of. In total, the issued loans will amount to $1.3 billion.

CPUC increases climate credits

“Natural gas prices in the West have risen to alarming levels this winter,” CPUC President Alice Reynolds said Thursday after the vote. “The advancement of the California Climate Credit will provide immediate relief to California families struggling to pay their bills while we look into this critical issue and explore long-term solutions to volatile natural gas prices.”

Commissioner Darcy L. Hawke added that “December saw one of the highest natural gas price spikes in recent memory. This price volatility is another great reminder of the urgent need to reduce our dependence on fossil fuels in our homes and energy system. I am proud of the many employees who have worked overtime to quickly approve almost $1.3 billion to ease customer accounts. We expect utilities to process this assistance as quickly as possible.”

While climate credits are coming soon, experts have warned that a long-term solution is needed to combat high natural gas costs.

“California is becoming more electric and that is gradually reducing the need for natural gas,” Modesto-based utility adviser Carl Lobo told the Globe Thursday. “But it’s not 100% efficient because all the electricity still has to come from somewhere. In terms of natural gas, California still needs large reserves to keep costs down in the near future, and this could be a problem as many gas wells shut down and new wells are banned. CPUC needs to do something quickly because another colder winter next year will cause this to happen again. And next time, the increase in loans may not suit everyone.”

Credits are expected to be applied to accounts as soon as possible.

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