Why was your electricity bill so high last winter? Blame it on the drought and on California.

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Pedestrians cross the Oroville Dam in the Lake Oroville Recreation Area on August 22, 2021. Two years of severe drought drained the reservoir so low that its hydroelectric plant was shut down for five months. California utilities with hydrogen generation have been forced to buy significantly more natural gas on the open market in 2022, driving up prices across the West. Ethan Swope/AP

One of the explanations for soaring utility bills last winter was the disruption of global natural gas supplies caused by the war in Ukraine, but it turns out that the source of the woes of many households in the Colorado was closer to home: California.

Drought has cut California’s hydroelectric generation to half normal levels in 2022, and to fill the void, state utilities have gone on a natural gas buying spree that has driven up the cost of gas delivered to Colorado utilities by nearly 100% during the year.

“California increased its natural gas supply in December and January in the basins where Xcel buys gas,” said John Harpole, president of Mercator Energy, a Littleton-based gas brokerage firm. “Because of California, Colorado taxpayers paid more for natural gas.”

The California rush has driven up prices across the West, with the cost of natural gas delivered to Colorado utilities, the so-called Citygate rate, rising to $9.83 per thousand cubic feet in January 2023 from 4 $.97 in December 2021, according to US Energy Administration information.

Drought-related gas prices have not only affected domestic heating bills, but also electricity costs, with the EIA estimating they could have raised prices in western markets by 5% electricity.

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The California price shock is both a cautionary tale and one likely to repeat itself as natural gas markets become more volatile and other forces, from climate change to the need to support growing electricity generation renewable, play a role in gas demand.

Learn more via The Colorado Sun.

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