PG&E overcharged customers, federal appeals court rules

Pacific Gas and Electric Co. has overpaid its shareholders, and overcharged its ratepayers, because of a federal agency’s mistaken decision to reward PG&E for complying with California law by putting a statewide operator in charge of the utility’s transmission system, a federal appeals court ruled Monday.

Federal law allows utilities to increase their maximum return on investment — money that comes largely from their customers — for joining and cooperating with regional organizations that transmit electric power, such as California’s Independent System Operator.

But the Ninth U.S. Circuit Court of Appeals in San Francisco said the law was aimed at voluntary actions, not those already compelled by state law.

The California Public Utilities Commission, which sued the Federal Energy Regulatory Commission that granted the

For years, California energy regulators have wanted to change the way most people pay for electricity, by charging different prices at different times of day.

For 150,000 Pacific Gas and Electric Co. residential customers, that change will happen in April.

The utility reported Monday that in three months, a small batch of its 5.4 million electricity customers will switch to time-of-use rates. By 2020, the majority of PG&E’s residential customers will see their monthly bills based on when they use electricity, not just how much they use.

The California Public Utilities Commission has been exploring the switch to time-of-use rates for more than a decade. In 2015, it authorized all of the state’s large, investor-owned utilities to begin making the change.

Charging more for electricity when demand hits its daily, late-afternoon peak should, in theory, prompt people to run their appliances later at night, when offices are closed, or during midday, when solar power is plentiful. That could, in turn, help the state avoid building more conventional power plants.

PG&E has selected the initial 150,000 customers from throughout the company’s service territory and will begin notifying them this month. All of the customers will have the choice to opt out and continue paying for electricity based solely on the amount used, rather than the time.

If they take no action, PG&E will automatically switch them to time-ofuse rates. Those rates will charge a higher price for electricity used between 4 and 9 p.m., while the rest of the day will be considered “offpeak.”

PG&E expects most customers will see either lower monthly bills or a slight increase as a result of the switch. If during the first 12 months, customers pay more than they would have under their old rates, PG&E will credit them the difference.