TITLE
Recommendation to authorize City Manager to work with Long Beach Utilities Department to promptly implement a Natural Gas Price-Spike Relief Program for the City’s residential gas customers most in need of payment assistance. (Citywide)
DISCUSSION
Late last year, the wholesale natural gas prices in California began to climb steeply. The Cost of Gas price passed through to Long Beach customers increased 84 percent from November 2022 to December 2022. Immediately following in January 2023, Cost of Gas price increased an additional 168 percent from the December 2022 cost. The pass-through amount billed to customers for January this year is three times the price that was charged in January of 2022. This price spike has led to dramatic and burdensome increases in monthly gas bills for all California residents, including in Long Beach. The unfortunate result has been almost two months of unaffordable natural gas bills for many economically burdened households in Long Beach.
The City of Long Beach (City) General Fund revenue from the utility users tax (UUT) on natural gas is also spiking from the five percent UUT rate which is applied each month to every customer’s total gas bill amount. As gas bills increase to customers, so does revenue the General Fund receives from the UUT. As explained in the Fiscal Impact section below, staff project that the December/January spike in natural gas prices may produce $1.5 million more in UUT revenue during Fiscal Year 2023 (FY 23) than the Adopted Budget assumes.
Therefore, staff recommend that City Council redirect unexpected General Fund revenue from the UUT on natural gas to residential Long Beach customers most in need for a program through the Long Beach Utilities Department. We recommend that the program be developed as quickly as possible and with an equity lens, so as to best reach those truly most in need, and with the resources available help as many of those in need as possible. While the Long Beach ...
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