After months of high natural gas prices, the City Council has asked the Long Beach Utilities Department to create a relief program for low-income households that could be funded with $1.5 million generated by the city’s utility users tax.
The council voted to make the request at a special meeting Wednesday. The city’s Utilities Commission would have to approve the program, but the council and Utility Department officials said they want to move quickly to establish the fund to help residents who have received historically high bills over the last two months as natural gas prices spiked.
The cost of one therm of gas, the unit charged to customers, has risen sharply since November, reaching a peak of $3.81 in January. Utilities Department General Manager Chris Garner said the price, which is set on the first of each month, had dropped by 66% for February ($1.28 per therm) but cautioned residents to remain vigilant about their usage.
“Even with it down 66%, the price is still high,” Garner said.
The dip could see Long Beach customers paying near the lowest cost per therm in the entire state, Garner told the council Wednesday night, adding that the average monthly bill for a single-family home should be less than what it was in December 2022, the first month that the commodity price made a significant jump.
The December price of natural gas, $1.42 per therm, was almost double what customers were charged in November—about 77 cents per therm. The high prices in December and January have reportedly added hundreds of dollars to customers’ bills, which pushed the council into action, with some calling for more support.
“I’d like to go a little further than $1.5 million,” said Councilmember Al Austin, who originally proposed using excess utility users’ tax money to help offset the rising bills for customers.
The utility users’ tax increases with the cost of natural gas, and the city has tentatively said that it could use $1.5 million from that tax to set aside for a fund to help vulnerable customers pay off their large bills.
Austin asked for the potential to use COVID-19 relief funding to supplement the fund to help more households, but city management said that most of those funds had been allocated.
The Utilities Department serves about 150,000 gas accounts, according to Garner.
Long Beach does have another potential funding source that benefitted from high natural gas prices, which it could tap to increase the relief fund. A budget report expected to be presented to the council on Tuesday is proposing an additional $5.8 million be transferred from the city’s gas fund to the general fund, where it can be used on city services.
The city routinely transfers money from the gas fund to the general fund and had budgeted for $11.1 million during the 2022 fiscal year that ended in September. However, due to an increase in natural gas prices, the city’s Financial Management Director Kevin Riper said in a memo that the city’s gas fund had $5.8 million in excess above the budgeted $11.1 million, and that leftover money could be transferred with approval from the City Council Tuesday night.
The Utilities Commission is expected to call a special meeting in the coming weeks to discuss the creation of the relief fund, where it could better define who would qualify and how relief would be assigned to customers.
Mayor Rex Richardson, who called the special City Council meeting on Wednesday, said the city is fortunate because it has its own utility provider that can respond to customers in times like this. He called on the Utilities Commission to work quickly to set up a user-friendly program.
“This should be easy,” Richardson said. “We don’t want to stand up some arduous process.”
The next Utilities Commission meeting is scheduled for Thursday, Feb. 2, at 9 a.m. at its headquarters located at 1800 E. Wardlow Road.
Long Beach utility bills are going up due to colder weather, natural gas exports