CPUC Announces 2023 Natural Gas Climate Credit Will Be Applied Two Months Early

Following several days of public and political pressure, the California Public Utilities Commission (CPUC) announced on Thursday that the 2023 California Climate Credit would be rolled out two months earlier than usual to help combat high gas prices across the state.

The Climate Credit, which usually comes from gas companies buying carbon permits through the state, typically applies around $60-$100 to offset gas bills in each applicable household beginning in April.  Beginning in late 2022, natural gas prices steadily climbed across California. However, colder than usual temperatures across the state, mixed with a low natural gas supply on the West Coast have caused bills from the past few months to go up by two times or more.  According to SoCal Gas, the “Core Procurement Gas Price” has gone up 314% since last year. PG&E also noted similar spikes in prices.

With pressure from state lawmakers, local lawmakers, and the public mounting, CPUC quickly placed an action that would move up the Climate Credits being issued. This was jumped on by many lawmakers this week, who urged them them to pass it to help bring relief for Californians from the higher prices. Among these lawmakers were Senate Republicans, who sent a letter to CPUC on Monday asking them to move up the Climate Credits in Thursday’s vote.

“We respectfully request the California Public Utilities Commission adopt the proposal regarding the 2023 California Climate Credit and allow for the disbursement of the credit as soon as possible,” said the GOP Senators, led by Senate Minority Leader Brian Jones (R-Santee) on Monday. “Californians are facing natural gas bills that are double and even triple their usual cost. These high gas bills add to the financial hardships Californian families are already facing, such as rising inflation and high cost of living.”

“We understand supply and demand factors impact the cost of natural gas, but we are also mindful of the regulatory actions that contribute to increased costs. As such, we encourage the Commission’s adoption of Item 24, Modification of Timing of Electric and Gas Climate Credits, at the February 2, 2023 Voting Meeting.”

On Thursday, CPUC listened to the lawmakers and the public, passing the emergency motion. The Climate Credit, which will be roughly $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 all be directly affected, with Bear Valley, Liberty, PacifiCorp, and Southwest Gas customers getting an accelerated credit instead. In total, the advanced credits will amount to $1.3 billion.

CPUC moves up Climate Credits

“Natural gas prices throughout the West have risen to alarming levels this winter,” said CPUC President Alice Reynolds on Thursday after the vote. “Advancing the California Climate Credit will provide immediate relief to California families struggling to pay their bills while we examine this critical issue and explore longer-term solutions to volatile natural gas prices.”

Commissioner Darcie L. Houck added that “December saw one of the highest natural gas price spikes in recent memory. This price volatility is another excellent reminder of the urgent need to reduce our reliance on fossil fuels in our homes and energy system. I am proud of the many staff who worked extra hours to quickly approve nearly $1.3 billion in customer bill relief. We expect the utilities to process this relief as expeditiously as possible.”

While the Climate Credits will now be coming soon, experts warned that a longer-term solution was needed to help combat high natural gas costs.

“California is going more electric, and that is slowly reducing the need for natural gas,” explained Modesto-based utility advisor Carl Lobo to the Globe on Thursday. “But that isn’t100% effective, because all the electricity still needs to come somewhere.  For natural gas, California still needs a bigger supply to get costs down for the near future, and that can be an issue as many natural gas wells are being stopped, and new wells being banned. CPUC needs to do something quickly, because another colder winter next year will jus cause this to happen again. And next time, moving up the Credits may not appease everyone.”

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