PG&E monthly bills set to rise in 2020
Average customer expected to see an increase of 31 cents
PG& E monthly gas and electricity bills are set to rise sometime during the first few months of 2020 after state regulators approved the embattled utility’s request for more revenue from ratepayers.
The higher utility rates were approved by the state Public Utilities Commission on Thursday, a move that the company says is required to bolster PG&E’s efforts to attract funding to improve the safety and reliability of its aging gas and electricity systems.
PG&E monthly power bills will rise an estimated 31 cents a month for people who receive both gas and electricity services from the company, the utility estimated.
For the average electricity customer, monthly bills would rise 20 cents from the current level of $113.64 to a new level of $113.84, PG&E estimated. Those figures are based on an average bundled residential electricity customer who uses 500 kilowatt-hours per month.
For the average gas customer, monthly bills would rise 11 cents, taking the bill amounts from the current $54.91 to a new average amount of $55.01, according to PG&E estimates. This example is based on an average residential gas customer who uses 34 therms a month.
“PG&E’s cost of capital proposal, which includes both gas and electric operations, is designed to make sure PG&E can meet the energy needs of its customers by attracting the critical funding necessary to invest in and increase the safety and reliability of its energy system,” company spokeswoman Kristi Jourdan said.
The PUC voted 5-0 on Thursday to approve the requests of PG&E and some of the other major power companies in California for ratepayer financing to cover their respective costs of obtaining capital.
This decision by the commission arrived amid PG&E’s ongoing federal bankruptcy case. Confronted by a forbidding landscape of liabilities and wildfire-linked claims, PG&E filed for bankruptcy in January, listing $51.69 billion in debts and seeking to reorganize its shattered finances.
“Capital is a critical part of operating a utility and provid
ing safe and reliable service for ratepayers,” Commissioner Marybel Batjer, president of the five-member PUC, said prior to the state agency’s vote.
The higher monthly bills won’t take effect until at least Jan. 1, 2020. Yet it’s also possible that they won’t begin until a few weeks, or even months later.
Why the potential delay? PG&E is busy with calculations as part of a yearly procedure known as the “annual true-up.” This endeavor creates a precise estimate of how monthly electricity and gas bills will change in the upcoming 12 months. PG&E said it’s possible those bill changes won’t go into effect until March or April, and not before Jan. 1.
Plus, other proceedings currently working their way through the PUC’s decisionmaking process could produce additional changes in monthly bills. The ultimate impact on customers isn’t yet known.
The decision on Thursday arrives amid heightened concerns about PG&E’s electricity and gas systems, especially in the wake of destructive — and in multiple instances, lethal — wildfires that have scorched Northern California in recent years.
Those deadly blazes include a 2015 fire in Amador County and Calaveras County, a series of infernos in 2017 in the North Bay Wine Country and nearby regions, and a 2018 wildfire that roared through Butte County and virtually destroyed the town of Paradise.
In October 2019, a Sonoma County wildfire near Geyserville originated near where a broken jumper wire was found at a PG&E transmission tower.
Several times during the fall, PG&E deliberately shut off power to widespread sections of its service territory, including in the Bay Area, hoping to forestall the chances of a spark turning into a wind-whipped inferno.
Wide-ranging efforts have begun to upgrade PG&E’s electricity system so the disasters become less frequent or even non-existent.
“In the next four years, PG&E expects to fund $28 billion in energy infrastructure investments including new gas pipelines and electric powerlines, increased system hardening, and power generation,” PG&E said Thursday.
The cost of capital funding allows PG&E to offset the upfront, immediate costs of these long-term projects, PG&E said.
In the wake of the catastrophes, the PUC indicated it’s necessary to ensure PG&E and other utilities have the funding to undertake system improvements.
“As we seek to harden and modernize the grid, financial stability is vital to these efforts,” Batjer said.