Natural Gas Prices 2023 (updated)

I posted about the high cost of natural gas last year around this time. it’s worse this year. My forecasted bill for January 2023 is currently $334. I thought it was some kind of sick joke, but apparently it is real. Here is the same forecast by day:

How is it possible to use $18 of gas in one day? You can view the same chart by usage, and I used 4.06 therms on January 2nd. Looking at the average rate from the last bill, it was $2.11/therm so the estimate is about twice the actual run rate. Why? Is there another rate hike in January, right after a rate increase in December?

Here is a summary of rates from each bill:

Date	Baseline	Over Baseline	Commodity	Total	Therms	$/Therm
12/28/22	$0.82487	$1.23877	$1.02638	$128.69	61	$2.11
11/28/22	$0.82487	$1.23877	$0.65029	$59.31	33	$1.80
10/26/22	$0.82487		$0.68686	$11.15	4	$2.79
9/27/22	$0.82487		$0.97080	$14.64	5	$2.93
3/30/22	$0.82487	$1.23877	$0.55921	$48.97	29	$1.69
1/28/22	$0.82107	$1.23364	$0.82340	$111.34	59	$1.89
12/29/21	$0.76790	$1.16180	$0.65085	$128.07	75	$1.71
12/28/20	$1.15018*	$1.52500*	N/A	$79.16	58	$1.36
12/28/19	$1.03231*	$1.26600*	N/A	$93.52	72	$1.30
1/28/19	$1.05167*	$1.38412*	N/A	$92.78	71	$1.31

This is about four years of data, and total cost per therm has increased from ~$1.30 to over $2.00 in high usage months. At some point in 2021, SoCalGas split the rate into transportation and commodity. The transportation cost remains steady or increases slightly over time, but the commodity cost component fluctuates wildly. This is likely due to the volatile market price for natural gas.

This is the commodity price of natural gas in USD/MMBtu. I am not sure how that translates into $/therm, but only the shape of the chart matters. We can clearly see that there is a lot of volatility in 2022, likely due to the Russian-Ukranian invasion. It does appear that prices have dropped sharply in the past few months. Perhaps consumers will get a break on that part of our gas bill?

Looking at this, the $334 estimate for my next bill seems ludicrous. It will still be a large bill so I will start turning down the thermostat. I have an old filled electric radiator. It does use quite a bit of power to operate but I should compare (somehow) if the price of natural gas keeps increasing.

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Updated: January 6, 2023 11:30 am

I found out why the January forecast is so high. The commodity component of gas prices is going up from ~$1.00/therm to almost $3.50/therm. SoCalGas has a chart of historical pricing but does not explain the reason for the January increase.

The numbers are slightly different from what I see in my statements but are very similar. Likely their website is showing a blended cost across different customer types. The issue is that the huge increase does not correlate to the commodities market pricing, which is showing a large decrease. I read online that the gas company pricing lags the market by six months due to hedging or something. Accordingly, there was not a matching increase in consumer costs during the summer. However, it is oddly convenient that the huge price increase comes during the winter when usage is 10-20x over summer months.

Personally, I started using a separate heater in my bedroom. It is an oil filled radiator. On the low setting, it draws 630 watts. My lowest electricity cost is $0.295/kWh, which comes out to $0.186 per hour. I do not know how much it costs to run the gas furnace, but from hourly cost data, it appears to be about $0.60 per hour. I have already turned down my thermostat from 71°F to 66°F, and my estimated cost for January decreased from $334 to $296 on the SoCalGas website.

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Updated: January 6th, 2023 12:45 pm

Ugh. 66°F is cold. I can feel the cold air when I breathe in. My parents just stopped by my house and they also commented that it is freezing inside my house. Maybe I have to go up to 68°F.