LB Non-Commodity Costs Lower Than So. Cal Gas While LB Commodity (Gas Pass-Through) Costs Slightly Higher; Commodity Cost Dramatically Lower Than Last Yr; Net Effect is Lower Bills
(January 12, 2002) -- A year after LB consumers were hit with soaring natural gas bills from LB's City Hall run utility, the agency (now called LB Energy) says LB residential and business consumers are now paying the lowest gas bills in CA.
A press release issued by the LB City Manager's office says in an unattributed quote:
"The City's long-term strategies have taken better advantage of the market than other California utilities as natural gas market conditions have improved nationwide. As of January 1, 2002, the average bill for Long Beach residential users was $41.58. For So. Cal Gas users, the same usage cost $43.03. In Palo Alto the same usage cost $84.41."
In January, 2001, LB's commodity cost (cost of gas, passed through to consumers) was $1.62 per therm. Now, it is roughly 27.63 cents per therm, about a penny higher than So. Cal Gas' January 2002 commodity cost of 26.509 cents per therm.
Despite the slight commodity cost differential, LB Energy consumers are still paying lower bills than So. Cal Gas because So. Cal Gas recently had a rate increase for its non-commodity costs, said LB Energy Director Chris Garner. Mr. Garner told LBReport.com that LB normally adjusts its non-commodity rates at budget time (September)...and he has no plans to ask for a non-commodity rate adjustment before then.
LB City Charter section 1502 provides, "The rates to be charged users for any services or commodities supplied by any public utility owned and operated by the City shall be based upon the prevailing rates for similar services and commodities supplied or sold by other like utilities whether public or private, operating in the Southern California area."
In late May 2001, LB Citizens for Utility Reform and several LB residents cited Charter Section 1502 (and other grounds) in a class action lawsuit against City Hall, seeking rebates for LB consumers for last winter's disproportionately high gas bills. The rebates could total over $30 million.
[To view a City Hall produced chart accompanying the press release, click on Average Residential Gas Bills, Jan. 02.]
Contacted for comment on LB's low gas bills now, LBCUR co-chair John Donaldson told LBReport.com:
"I think Mr. Garner did a good job. He listens well...certainly better than Dennis Carroll." (The 4th district incumbent has repeatedly denounced LBCUR's lawsuit during Council meetings, portraying it as attempt to bankrupt the City or harm its ability to provide services.)
Mr. Donaldson added, "Good natural gas buying policies did not come from City Council patience. These policies came from a change in strategy by Long Beach Energy that grew out of discussions and pressure from Long Beach Citizens for Utility Reform."
As separately reported by LBReport.com Mr. Donaldson has entered the 5th district Council race for the seat now held by Councilwoman Jackie Kell. [For LBReport.com coverage, click on John Donaldson to challenge Councilwoman Jackie Kell in 5th district.