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LB Gas Dept Slashes April Natural Gas Commodity Rate to 0.1914 per therm; LB Rate was 0.69 in March, roughly 1.43 in Feb. & 1.62 in January

(April 3, 2001, 3:20 p.m.) -- The LB Gas Dept. has slashed consumers' natural gas commodity rate for April usage to 0.1914 per therm, a fraction of the huge rates paid by LB consumers for usage this past winter and significantly lower than the So. Cal Gas commodity rate that will be charged in neighboring Lakewood this month.

LB's 0.1914 per therm commodity rate for April is significantly below the 0.694 per therm So.Cal Gas will charge in its service area (including neighboring Lakewood) for April usage.

As of this posting, City Hall has not yet given an official explanation for its dramatic April commodity rate decrease, but assumes the April rate reflects a de facto subsidy likely resulting from savings of some type secured by City Hall. We will update this article when City Hall releases further details.

This marks the second large drop in the City Hall run utility's commodity rate from disproportionately high rates paid by LB consumers for several months. For example, LB consumers paid 1.43 per therm for February usage and 1.62 per therm for January usage.

In March, the Gas Dept. lowered its commodity rate to 0.69 per therm, reflecting a lower price re-negotiated by City Hall with the CA State Lands Commission for gas pumped from the tidelands and sold back to LB; the Gas Dept. also said it also managed to obtain lower rates from seven different suppliers. City Hall used the savings effectively to subsidize and lower the March commodity rate to 0.69.

The LB Gas Dept's lower rate for April will presumably appear on bills reflecting April usage which (depending on your billing cycle) may arrive in later April or May.

Since individual bills cycle at different times of the month, the commodity rate on your bill may look different. That's because it may reflect part of the current month and part of the previous month.

For example, if your bill dates from the 15th of the month, it will reflect 15 days of the current month plus 14-15 days of the previous month, in effect blending or prorating the two months' rates.

Some bills covering early April usage with late March usage will blend the 0.19 April rate with the 0.69 March rate, so the effective daily rate for that month's bill would be somewhere in between. However, April usage will effectively be charged the lower 0.19 April rate, and billings covering April usage will factor in the lower rate.

The commodity charge is shown on the bottom third of the bill where it says, "The gas usage rates include a commodity charge of $XXXXX."

Compare: There's a different, higher per therm rate in the middle third of the bill. That's the total of the commodity charge (above) plus a baseline rate (charge on use under 50 therms) and non-baseline rate (charged on use over 50 therms).

As also reported on, the City Council previously approved a rebate equal to 4.5% of the utility users tax charged on natural gas usage for the period of December 1, 2000 through March 31, 2001. This sum began appearing on March bills with the amount noted under a line labelled "gas rebate."

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