PG&E cites fire safety, asks for 18% hike in rates
PG&E is planning another round of rate increases for its gas and electricity customers, starting in 2023 with a roughly 18% bump over current rates, much of it to pay for safeguarding the power grid against wildfires.
The investorowned utility continues to face increasing costs as it seeks to upgrade an electrical system that’s sparked scores of fires in recent years, including the deadly blazes in Paradise and Wine Country.
The proposed rate change, which PG&E officials say would amount to a roughly 5% average annual increase on residential bills through 2026, would fund such work as expanded tree thinning near power equipment, more undergrounding of electrical lines and installing technology to locate system safety failures. The new rates represent an estimated $3.6 billion boost in revenues from 2022 to 2023.
“We know this is a significant request that comes at a pivotal time when many of our customers are struggling to recover from the pan
demic,” said Robert Kenney, PG&E vice president of Regulatory and External Affairs, in a statement. “While we believe these investments are critical to meet the evolving energy needs of our communities and customers, we won’t stop looking for additional ways to manage costs, and help customers use less energy and lower their bills.”
The utility, which serves more than 16 million people across Northern and Central California, submitted the proposed rate hike to the California Public Utility Commission on Wednesday.
The company’s fouryear billing proposal is among the many routine rate increases for which governmentregulated power providers must get state approval. The CPUC is expected to review the request, which has already begun drawing criticism for its size, to make sure the increase accurately reflects the utility’s new costs and that the costs are fairly split among customers. The agency also regulates what expenses should be borne by shareholders.
PG&E’s last major rate hike was on March 1. That roughly 5% increase was the latest in a series of billing changes intended to bring in more revenue to make the company’s power infrastructure safer and more reliable, particularly in an era of increasing wildfires.
In recent years, the utility has been working to clear more vegetation around power equipment, harden electrical lines, improve weather forecasting, including firethreat assessments, and employ technology that detects safety problems.
The proposed rate hike would dedicate roughly half of the new revenue to broadening such wildfire safety work. The balance would go to updating gas lines, including safety upgrades, and a slew of clean energy projects, including expanding electrical vehicle charging infrastructure.
The revenue would not cover PG&E’s legal payments to fire victims. The company’s costs and liabilities stemming from wildfire pushed the company into bankruptcy in 2019, the year after the Camp Fire that devastated the town of Paradise and killed 85 people, becoming the state’s deadliest blaze. As part of the bankruptcy deal, PG&E was allowed to start tapping a state wildfire fund to help pay the expenses of future blazes.
More recently, the company’s equipment was found to have caused the 2019 Kincade Fire in Sonoma County and last year’s Zogg Fire in Shasta County, which killed four people.
If the proposed increase is approved by state regulators, the average monthly bill for residential customers receiving both gas and electricity would rise from $198.78 to $234.74 a month, according to PG&E. That’s about an 18% bump.
It amounts to about $1 a day for most households, the utility estimates, and about 80 cents a day for lowerincome households qualifying for the California Alternate Rates for Energy, or CARE, program.
Critics called the proposal excessive even for PG&E, which has been been accused of overcharging customers to put more money in the pockets of shareholders.
“This is far higher than anything that PG&E has ever requested, far higher than what other utilities have requested,” said Mark Toney, executive director of the consumer advocacy group TURN, The Utility Reform Network. “When you’re talking about raising people’s bills by hundreds of dollars of year, and just coming off COVID, it’s an unbelievably harmful proposal.”