In a recent press release, Pacific Gas and Electric Company (PG&E) revealed its anticipation of reduced winter bills for customers compared to the previous year. The primary factors contributing to this decrease are attributed to lower gas prices and milder temperatures.
KCRA 3, in an exclusive report, took a behind-the-scenes look at PG&E's McDonald Island natural gas storage facility to shed light on its operations and how it directly impacts consumers' monthly bills.
Situated west of Stockton near the Sacramento-San Joaquin River delta, McDonald Island stands as the largest among PG&E's three natural gas storage facilities. Covering approximately 2,760 acres of subsurface reservoirs and boasting numerous wells at a depth of a mile, the facility plays a crucial role in stabilizing natural gas prices.
PG&E spokesperson Lynsey Paulo explained the straightforward mechanism behind their approach. "We purchase the gas at a lower cost. We're able to store it when the prices go higher on the market and be able to withdraw that gas when the prices are higher so that our customers are paying a less amount," she stated.
This strategic approach shields customers from potential natural gas price spikes and ensures a readily available supply during periods of peak demand, such as cold snaps. PG&E highlights that the McDonald Island facility played a pivotal role in minimizing bills for customers during the previous year, ultimately saving them $1 billion.
Despite the optimistic outlook for lower bills this winter, it's essential to note that this is in comparison to historically higher bills from the preceding year. Moreover, customers are currently facing a nearly 13 percent rate increase that took effect on January 1st of the new year.
Responding to concerns about the impact on customers, Paulo emphasized the role of natural gas storage in mitigating market fluctuations. "Natural gas storage is one of the tools that we use to help protect our customers from spikes in the market," she stated. Acknowledging the challenges faced by customers, she mentioned that the recent bill increase is directed towards reinforcing the system against wildfires and other climate impacts.
PG&E is actively working towards minimizing its costs to alleviate the financial burden on customers. Paulo mentioned their commitment to reducing customer costs or limiting increases to 2-4 percent annually over the long term.
As winter unfolds, PG&E's utilization of natural gas storage and strategic cost-saving measures will be closely observed, impacting the bills and financial well-being of its customers.