PG&E rate increases to recover costs
Customers face forbidding prospect of higher monthly bills due to utility’s requests for more revenue.
PG&E customers face the forbidding prospect of higher monthly bills due to the utility’s requests for more revenue to ensure it can cope with an array of events including wildfires, coronavirus challenges and other catastrophes.
The combined effect of the two rate requests would cause the average monthly PG&E bill to jump past $200 a month for the typical customer who receives both electricity and gas services from the utility.
At present, the average bill for the typical customer who receives both electricity and gas services from PG&E is a shade under $200 a month.
The two requests combined would produce an average monthly bill of $209.08 if the state Public Utilities Commission approves both revenue increases as filed by PG&E.
In one filing, PG&E sketched out a request to recover $1.47 billion of expenses related to wildfire mitigation, certain catastrophic events and a number of other activities, according to documents filed Thursday with the Securities and Exchange Commission.
“Faced with the complex wildfire threat our state faces, PG&E is taking action to build a more climate-resilient energy network,” Lynsey Paulo, a PG&E spokesperson stated in explaining the primary impetus behind the revenue request.
In a prior filing with the SEC, posted on Aug. 23, PG&E requested a $201.3 million increase to cover the utility’s cost of capital to bankroll a variety of operations related to its electricity and gas system.
“Our cost of capital filing addresses the extraordinary impacts that the COVID-19 pandemic and related government financial response has had on our state, our economy, and the financial markets,” PG&E spokesman James Noonan said in explaining the August filing. “Our proposal will ensure we
can continue to fund the investment necessary to safely and reliably meet the energy needs of our customers.”
At present, the PG&E average bill is $199.95 a month for combined electricity and gas services, consisting of $139.68 a month for electricity and $59.97 a month for natural gas services.
If the PUC approves both requests as currently proposed by PG&E, the average bill would jump to $209.08 a month for combined electric and gas services. That works out to an increase of $9.43 a month, or 4.7%.
“While we understand this is a significant request, the costs are for critical activities to improve and maintain our system, reduce risk of catastrophic wildfires and provide safe and reliable service to our customers,” Paulo said.
The jolt to customers from these requests could be blunted somewhat as a result of PG&E’s decision to exit its San Francisco office complex and shift its headquarters to a landmark office tower in downtown Oakland.
PG&E has struck a deal to sell its five-building office campus in San Francisco to developer Hine for $800 million, a deal that has been approved by the PUC.
“In addition to promoting long-term savings for PG&E, the sale of our San Francisco headquarters will help to offset future customer rates at a time when we’re making significant safety and operational investments,” Patti Poppe, PG&E’s chief executive officer, said in a prepared release.
The PUC also approved PG&E’s plan to return to customers $400 million over a five-year period in net savings resulting from a more efficient and smaller downtown Oakland footprint.
PG&E believes the $400 million will help reduce the pain to customers that looms as the result of multiple proposals being floated by the utility for increases in revenue,