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SoCalGas asks for 13% rate increase after exorbitant winter surges

SoCalGas requests 13% rate increase to drive revenue to over $4 billion
SoCalGas requests 13% rate increase to drive revenue to over $4 billion 02:58

For the past few months, keeping the gas on has been rough for both restaurants and residents across Southern California after rates surged during one of the coldest winters. 

"My bill has tripled," said pizzeria owner Alex Lunardon. "I am required to not use as much as I would normally use just to make sure I am not going crazy on my utility bills."

Now, the situation could get worse as state regulators fielded a proposal from the Southern California Gas Company to increase rates by 13.2%. While the utility company submitted the application to increase rates in May 2022, residents and businesses were stunned to learn about it after the recent hikes.

"I don't get it," said Lunardon. "I honestly don't understand. Why do they want to raise the gas bill by 13%?"

According to the utility company, the rate will help modernize and upgrade its infrastructure while trying to grow its renewable energy options. During a public hearing held by the California Public Utilities Commission, some business owners supported the proposal, but many homeowners were dismayed with the proposed increase. 

"I object to this exorbitant rate hike," said Menifee homeowner Anne Kirchgessner, who is also retired. "I've had to cut back on groceries."

According to SoCalGas, the approximately 13% hike would result in an extra $8.28 a month for residential customers. The utility provider said the hike would allow it to raise revenues to $4.74 billion between 2024 and 2027.

The estimated revenue of $4.74 billion breaks down to:

  • $738 million in 2024 (more than 20% of expected revenues in 2023)
  • $295 million in 2025 
  • $261 million in 2026 
  • $379 million in 2027

"We got our Feb. 28 bill for $606.88 compared to our Nov. 28 bill of $47.65," said San Pedro homeowner Glenn Mazros. "Three people, one house. Now they're asking for billions."

State regulators will announce their decision by the end of the year. If approved, the new rates will take effect on Jan. 1, 2024.

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