PG&E Rate Hike Will Cost You Hundreds Of Dollars Next Year

NORTHERN CALIFORNIA — Pacific Gas & Electric customers will see an increase soon in their utility bills.

The California Public Utilities Commission voted 5-0 Thursday to approve a rate hike increase for PG&E.

The amounts approved were about 50 percent of what PG&E originally asked for in its rate case review that began over two years ago, commissioners said during the voting meeting Thursday.

PG&E requested $15.4 billion for 2023; Thursday’s decision cut that amount substantially, by $1.8 billion. The decision sets the 2023 revenue requirement at $13.5 billion, reflecting an 11 percent increase from the authorized 2022 revenue requirement, the CPUC said.

For the typical residential customer, their combined monthly electric and natural gas bill will increase starting Jan. 1, 2024, by $32.62 or 12.8 percent, compared to PG&E’s request of $38.73 or 17.9 percent increase, the CPUC said.

The commission voted on the matter shortly before 2:30 p.m. following about two hours of public comments made by phone and by people at the meeting.

"We will never be safe while PG&E undergrounds these minuscule amounts," one caller said "PG&E has been raping and pillaging the public blind and has completely burned up its credibility; please do not continue to allow PG&E these outrageous rate increases."

Another caller alleged PG&E has been diverting undergrounding funds paid by customers toward other things.

"Forty more dollars a month for electricity lowers my ability to buy food and I already don't turn my lights on, I don't watch TV, I have not lit the pilot light on my gas stove because I can't afford it," the caller said. "I hope the CPUC really thinks about what this is doing to the people of California."

Yet another caller said the rate hikes were "not safe for the elderly or families with young children who have to keep their heat off in the winter and AC off in the summer because they can't afford to pay for it."

Commissioner Darcie Houck said the CPUC was not taking the issue lightly.

"... The affordability component of our responsibility weighs heavily on me," Houck said. "I fully understand ratepayers are struggling with the cost of living for food, clothes, everything. ... We as a commission do not take this lightly and we do hear the comments coming in. PG&E has not been granted their full request, it is significantly less than what they asked for."

Among the key initiatives covered in the decision approved Thursday by the CPUC were:

• Wildfire System Enhancement and Undergrounding: Approves 1,230 miles of electric line undergrounding, as well as 778 miles of covered conductor, totaling 2,008 hardened miles.
• Vegetation Management: Approves PG&E investing approximately $1.3 billion in vegetation management to reduce wildfire ignition risk and improve the reliability on PG&E’s electrical system.
• Capacity Upgrades: Approves PG&E investing more than $2.5 billion in upgrading the electric distribution system from 2023-2026, which will help prepare the grid to support initiatives for enhanced building electrification and new interconnections for electric vehicle charging stations and new housing and businesses.

Commissioner John Reynolds, who worked to come up with the alternate proposed rate plan decision approved Thursday, called it a "historic investment in wildfire hardening."

According to Reynolds, when PG&E first submitted its application for this rate case back in June 2021, there was no undergrounding mentioned. One month later, Reynolds said, PG&E made a major announcement about undergrounding. In early 2022, after being directed to do so, PG&E updated the rate review to include some 3,300 miles of undergrounding.

The rates approved Thursday allow PG&E to do just over 1,200 miles.

"We made reductions where we could, yet we approved a program that makes this historic investment," Reynolds said. "... We know increased bills make your lives harder. We do have programs that help; everyone should check our website."

Reynolds said the decision Thursday was about more than a revenue increase for PG&E, it was also an opportunity for PG&E to keep a commitment.

"We recognize there is a lack of trust," Reynolds said. "To PG&E, your work is not done yet. We need to see PG&E deliver excellence moving forward. Delivering day in and day out, year after year is the way to build back trust with customers."

PG&E Thanks Commission For 'Recognizing Important Safety, Reliability Investments'

According to PG&E, more than 85 percent of its proposed increase first submitted back in June 2021 was to reduce risk in its gas and electric operations.

PG&E said that placing the CPUC-approved 1,230 miles of powerlines underground in its highest fire-risk areas is a permanent risk reduction that eliminates nearly 98 percent of the risk of wildfire ignition from electrical equipment. Additionally, it increases electric reliability by reducing the need for safety-related power shutoffs and saves customers billions of dollars in reduced annual tree trimming and overhead line maintenance costs, PG&E said.

"We are committed to being the safe operator that the people of California expect and deserve," Patti Poppe, CEO of PG&E Corporation, said Thursday after the CPUC voted on the rate changes. "We appreciate the Commission for recognizing the important safety and reliability investments we are making on behalf of our customers, including undergrounding powerlines to permanently reduce wildfire risk. Undergrounding is the best tool in the highest fire-risk areas to protect our customers and hometowns and improve reliability year-round at the lowest cost to our customers."

Customer Bill Impacts

According to PG&E, customer bills may vary based on where they live, energy usage, rate plan, program enrollment, weather in their region, and other factors.

Under the rate increase, typical residential non-CARE monthly combined gas and electric bills will rise by an average of 3.6 percent over three years. It will increase monthly bills by approximately 12.8 percent in 2024, and have a net decrease in the following years, 2025 and 2026. For example, the typical bill will increase by approximately $32.50 in 2024, $4.50 in 2025, and decrease by almost $8 in 2026.

For the typical residential CARE customer, the monthly combined bill would increase by an average of 3.8 percent over three years, according to PG&E. Typical bills will increase by about $21.50 in 2024, $3 in 2025, and decrease by about $5.50 in 2026.

In addition to the CPUC-approved increase, PG&E will implement additional rate changes as part of an annual process called the "true-up" which consolidates rate changes authorized by the CPUC. These amounts will be final at the end of December.

The new rates take effect Jan. 1, 2024, however, customers may not see the change in their bill until February depending on their billing cycle.

New Rates To Fund Undergrounding, Replace Pipelines, Increase Electric Capacity

According to PG&E, the undergrounding funded by the rate changes benefits all customers over the long run through improved air and water quality from fewer fires, protection of wildlands and improved access to homeowners’ insurance at lower premiums. It is one of the company's multiple layers of protection that have reduced the wildfire risk of company equipment by 94 percent, PG&E said.

The rate changes, according to PG&E, will also fund the replacement of 163 miles of distribution pipeline; the inspection of 343 miles of transmission pipeline; strength-testing of 43 miles of gas transmission pipeline; and the use of advanced mobile leak detection technology to quickly find and fix gas leaks.

Lastly, PG&E said the rate changes will increase electric capacity to support the state’s goals for transportation electrification, affordable housing and economic development. PG&E plans to invest in the electric system by doing grid work that will support the widespread use of electric cars to help improve air quality and reach climate goals; explore technologies for the use of electric vehicles and other areas of energy storage; and improve microgrids for resiliency during extreme weather and peak-energy demand periods.