CC SR 20230207 01 - Natural Gas Prices
CITY COUNCIL MEETING DATE: 02/07/2023
AGENDA REPORT AGENDA HEADING: Regular Business
AGENDA TITLE:
Consideration and possible action to authorize the Mayor to sign a letter to state officials
asking they investigate the statewide spike of natural gas prices.
RECOMMENDED COUNCIL ACTION:
(1) Authorize the Mayor to sign a letter to state officials asking they investigate the
statewide spike of natural gas prices and requesting measures to harden and
increase the resiliency of public utility infrastructure.
FISCAL IMPACT: None
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: McKenzie Bright, Administrative Analyst
REVIEWED BY: Karina Bañales, Deputy City Manager
APPROVED BY: Ara Mihranian, AICP, City Manager
ATTACHED SUPPORTING DOCUMENTS:
A. Draft letter to state officials regarding natural gas prices (page A-1)
BACKGROUND AND DISCUSSION:
Southern California Gas Company (SoCalGas) recently announced that effective January
1, 2023, natural gas bills would be “shockingly” high. The January market price per therm
was $3.45, a more than 300% increase from January 2022. SoCalGas cited a number of
factors affecting the price increase, including widespread below -normal temperatures,
high natural gas consumption, reduced natural gas flows, and pipeline constraints.
SoCalGas has shared information with its consumers abou t programs to help reduce
natural gas usage and programs to help those who may have difficulty paying their bills.
SoCalGas is regulated through the California Public Utilities Commission (CPUC). At the
CPUC’s meeting on January 12, 2023, President Alice Reynolds stated the CPUC would
be convening an en banc hearing to gather information from market experts to examine
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RANCHO PALOS VERDES
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the possible drivers of natural gas price spikes and explore potential actions th at can be
taken to address impacts on ratepayers.
On January 24, 2023, the Los Angeles County Board of Supervisors authorized county
legislative staff to write a letter asking the state to launch an investigation into natural gas
utility bill spikes that county residents experienced this month and to develop a plan to
prevent future spikes, as well as identify opportunities within the county to assist
overburdened customers.
Significant increases in utility bills, particularly for older residents that may be on a fixed
income, can be a severe burden. Staff recommends the City Council authorize the Mayor
to send a letter (see Attachment A) to Senator Allen and Assemblymember Muratsuchi,
asking them to encourage the state to investigate the spike in natural gas prices, in
conjunction with the county’s request.
CONCLUSION:
Authorize the Mayor to send a letter to state officials requesting an investigation in the
natural gas price spike.
ALTERNATIVES:
In addition to the Staff recommendation, the following alternative action is available for
the City Council’s consideration:
1. Identify revised language to add to the letter.
2. Do not authorize the Mayor to sign the letter.
3. Take other action, as deemed appropriate.
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February 7, 2023 Via Email
The Honorable Ben Allen
California State Senate
1021 O Street, Suite 6610
Sacramento, CA 95814
The Honorable Al Muratsuchi
California State Assembly
P.O. Box 942849
Sacramento, CA 94249-0066
SUBJECT: Request for Investigation of Natural Gas Price Spike
Dear Senator Allen and Assemblymember Muratsuchi:
The City of Rancho Palos Verdes joins the County of Los Angeles in requesting an
investigation into the statewide spike of natural gas prices. As you know, over a quarter
of residents in the City are 65 and older, many of whom are on a fixed income. Significant
price shocks like this pose a large financial risk to our residents, particularly our older
residents.
In addition to an investigation into the price spike, we respectfully request the state
explore measures to harden and increase resiliency of public utility infrastructure, to
prevent similar price spikes in the future.
The City, on behalf of our residents, is deeply concerned about the significant price
increase we have experienced in natural gas prices. For these reasons, the City is
supportive of an investigation into the causes of this price spike, as well as
recommendations to prevent such a spike from occurring again. We respectfully request
your assistance in encouraging the state to engage in this investigation.
Sincerely,
Barbara Ferraro
Mayor, City of Rancho Palos Verdes
A-1
CITY OF
BARBARA FERRARO, MAYOR
JOH N C RUll<S HAN I<, MAYOR PR O TE M
ERI C A LE GRI A, COUNC IL MEMBER
D AV ID BRA DL EY, COU NCILMEMBER
PAUL SEO, COUNC ILMEMBER
RANCHO PALOS VERDES
Senator Allen and Assemblymember Muratsuchi
February 7, 2023
Page 2
cc: Alice Reynolds, President, California Public Utilities Commission
Matt Baker, Director, CPUC Public Advocates Office
Jacki Bacharach, South Bay Cities Council of Governments
Jeff Kiernan, League of California Cities
Marcel Rodarte, California Contract Cities Association
Sharon Gonsalves, Renne Public Policy Group
Rancho Palos Verdes City Council and City Manager
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