PG&E announces gas, electric rate bump
Revenue from higher bills will help pay for electric system safety and wildfire mitigation, PG&E says
PG&E electricity and natural gas residential customers must brace for a jump in their monthly bills in March, an increase the utility says will be used to finance an array of efforts to improve safety and reliability.
The monthly bill for the average customer who receives both electricity and gas service from PG&E is jumping to $196.95 a month effective March 1, an increase of $8.73 a month from the average monthly bill of $188.22 that went into effect on Jan. 1, PG&E stated in a post on its web site.
That works out to an increase of 4.6% in the average monthly electricity and gas bill compared to the average bill in January.
“PG&E rates for natural gas and electric service will be increasing,” Robert Kenney, vice president of regulatory and external affairs, said in a post on a PG&E blog. “We want to be upfront about that. We understand it may be a hardship for many.”
In December 2020, the state Public Utilities Commission approved the higher monthly bills as part of a regular general rate case for PG&E’s gas and electricity services.
Electricity bills at the beginning of 2021 were $133.84 for the average residential customer and will increase by $5.01 as of March 1, or 3.7% increase. Natural gas bills were $54.38 a month for the average gas customer and are ste to rise $3.72 a month, up 6.8%.
Thoe increases — the combined bill, electric bill, and gas bill — are all far above the overall local inflation rate. During 2020, the consumer price index, which is the official measure for inflation as it affects consumers, rose 2% in the Bay Area, according to the U.S. Bureau of Labor Statistics.
The higher revenue that PG&E is collecting will be used to finance varied measures and programs to improve the utility’s electricity and gas system.
San Francisco-based PG&E’s planned improvements include:
• Reducing the risk of wildfires by upgrading and hardening the electricity system
• Enhancing vegetation management
• Expanding PG&E’s network of weather stations and highdefinition cameras to monitor fire-danger conditions
• Improving the utility’s program of intentional power shutdowns, officially known as Public Safety Power Shutoffs, which are designed to reduce the chance of fires caused by the company’s electric equipment.
• Making improvements to gas system programs such as gas leakage surveys, leak repairs, engineering, and preventative maintenance.
PG&E is attempting to bounce back from a decade of disasters ushered in by a 2010 fatal explosion in San Bruno that killed eight and destroyed a city neighborhood.
During the decade, PG&E caused a string of catastrophic wildfires, including a deadly blaze in Amador County and Calaveras County in 2015, fatal infernos in the North Bay Wine Country and nearby regions in 2017, and a lethal conflagration in Butte County in 2018 that became California’s deadliest and most destructive wildfire.
In 2016, a federal jury convicted PG&E of felonies it committed before and after the San Bruno explosion.
In 2020, PG&E pleaded guilty to 84 counts of involuntary manslaughter in connection with the Camp Fire in Butte County.
The results of the Butte County case placed PG&E in the grim pantheon of America’s deadliest corporations.
The PUC in 2020 levied a record-setting $1.94 billion penalty on PG&E for its role in causing the 2017 and 2018 infernos. That was the largest financial punishment ever imposed on an American public utility.
The amount eclipsed the $1.6 billion financial penalty the PUC imposed on PG&E in 2015 for causing the San Bruno blast — also a record-setting punishment at the time.
PG&E last year emerged from a bankruptcy proceeding to reorganize its shattered finances, which had buckled beneath a mountain of debts and wildfire-related liabilities. Now, the company hopes to push ahead with lasting reforms for how the disgraced utility operates and to steadily increase the safety of its electricity and gas system.
One of the major changes is PG&E has struck a deal to relocate its corporate headquarters to downtown Oakland from San Francisco. PG&E believes the shift will help it save money. The company intends to place its San Francisco office towers on the sales block — although that city’s office market is reeling from huge increases in empty offices and chunks of space being offered for sublease. “We’re selling surplus properties and our San Francisco headquarters,” Kenney stated in the blog post on the PG&E Currents page. “We expect those sales to free up $800 million.”
PG&E also recently struck a deal to sell its electric transmission tower wireless licenses to SBA Communications. The licenses are granted when wireless service providers attach their equipment to PG&E towers. That sale is expected to raise $973 million.
“A significant portion of these proceeds will help lower customers’ monthly bills,” Kenney said. “These operational cost cuts help us direct more of the rates we all pay to provide safe and reliable service.”
PG&E stated that the higher monthly bills for customers won’t be used to bankroll any of the company’s legal expenses.
“This rate increase won’t pay for any legal claims from wildfires in 2015, 2017, and 2018, or for executive pay,” Kenney said. “Shareholders are responsible for those costs.”