BY JAMES WERNICKE
Los Alamos
On July 1, natural gas rates in Los Alamos County will increase and the average resident’s bill will rise by 16%. In 2027, rates will increase again, and the average bill will rise another 11%. https://www.losalamosnm.gov/
Over the last five years, the Department of Public Utilities (DPU) reports that average monthly gas usage has declined 6.7%. They attribute this to warmer winters, though increased home efficiency, electrification, and stagnant population growth are factors that would produce the same trend and should warrant equal consideration in DPU’s long-range forecast.
Costs are split across three categories: fixed service charges, fixed consumption charges, and variable consumption charges. Fixed charges fund administration and infrastructure that must be maintained regardless of usage. When total demand falls, the fixed cost per therm rises.
The County is planning for continued demand reduction. The Climate Action Plan (CAP) recommends eliminating natural gas from buildings by 2050 and limiting new gas hookups. Meanwhile, the electric system will benefit from scale as more homes electrify. This makes the current increase part of a longer trajectory rather than a one-time adjustment. As that transition progresses, costs will be spread across fewer therms, resulting in more extreme rate increases.
Since remaining customers will carry a growing share of costs and lower-income households are less able to replace equipment or retrofit homes, we should plan for how to support this transition equitably. Current support is limited primarily to bill assistance, which addresses short-term affordability, but it does not reduce long-term dependence on gas. The CAP encourages education, technical assistance, and electric replacement at equipment end of life, but it does not establish local funding for appliance replacement, panel upgrades, or weatherization. An effectively managed transition should reduce upfront costs–such as expanded rebates for heat pumps and electric appliances, funding for electrical upgrades in older homes, and on-bill or low-interest financing–which would shift assistance from temporary bill relief toward permanent cost reduction.
A common concern is that switching to electric appliances trades one risk for another, but neither gas nor electric grids are perfectly reliable. The 2021 winter storm exposed the vulnerability of gas supply chains across the region, and a system in managed decline will receive proportionally less capital investment over time. DPU’s long-range planning already anticipates increased electric demand from electrification. Rooftop solar combined with battery storage can reduce dependence on a centralized grid for those skeptical of its reliability. DPU should address the grid reliability concern more directly in its public communications, but it is not a reason to remain on gas indefinitely, and it should not be used as a justification for avoiding the transition.
Beyond reliability, carbon costs represent another risk that the current rate structure does not yet reflect. The variable portion of the bill reflects only the market cost of purchasing and transporting gas, which means current rate increases are driven by system economics rather than climate externalities, even though those externalities are a primary reason why the gas system is expected to decline. Federal carbon pricing legislation has been introduced repeatedly, and California has demonstrated that an economy-wide carbon price covering building emissions is operationally viable. At commonly cited prices of $50 to $150 per metric ton of CO₂, a therm would cost roughly $0.27 to $0.81 more on top of whatever system economics require at that time. Residents who delay the transition are exposing themselves to risks that are unlikely to remain unpriced indefinitely.
The question for residents is not whether this transition happens, but whether they get ahead of it or are overtaken by it. Those who replace gas appliances at end of life with heat pumps, electric water heaters, and induction ranges will insulate themselves from further rate increases. Those who defer will pay more each year to remain on a shrinking system. The County has a corresponding obligation to support residents — particularly renters and lower-income households who cannot easily self-finance equipment replacement — and move beyond temporary bill assistance toward permanent cost reductions that make the transition genuinely accessible.
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