Fresno area ratepayers will start paying as much as 50 cents a kilowatt hour in June and could see jumps to as much as $1 kWh over the next five years.
“Over the next four years (PG&E) is requesting a 50% increase, that is their request. This is not speculation,” Mark Toney, executive director of The Utility Reform Network, told GV Wire. “They have put billions and billions of dollars on the table… to generate enormous profits and get a rate of return of 10%.”
Toney added that Fresno rates could “easily” reach 75 cents to $1 kWh five years from now.
Already burdened by some of the nation’s highest power rates, steep future hikes could deal crippling blows to Valley residents and businesses alike.
So, the question must be asked: Can Fresno break free of PG&E’s grip as sister Central Valley cities Modesto and Sacramento have done?
If the city can, the potential savings could be significant.
Sacramento, Modesto Success Stories
Sacramento has kept its energy rates lower than the average energy bill in California via the Sacramento Municipal Utility District.
SMUD began service in 1923 when citizens voted to create a community owned-not-for-profit electricity service. In 1946, SMUD completed the purchase of PG&E’s infrastructure for the area and officially electrified its grid independent of PG&E.
Today, SMUD is the nation’s sixth-largest community-owned electric utility, with rates ranging as low as $0.11 kWh in winter and up to $0.32 kWh during summer. Additionally, SMUD charges a monthly fixed rate of $23.50 for infrastructure.
For a consumer using 500 kWh monthly, SMUD’s electricity bill would be $187.45 as opposed to PG&E’s $250.00 when at the peak rates — a $62.55 difference.
Modesto Irrigation District is another Central Valley electricity provider. The service area for the community-owned, not-for-profit provider covers Modesto and extends to Ripon and Waterford. MID customers pay a fixed monthly fee of $30 and usage rates ranging from $0.12 to $0.18 per kWh.
A kWh measures the amount of energy that an appliance or device needs to run for one hour. For example, when cleaning your rugs with a 1,000-watt vacuum cleaner for one hour, you consume 1 kWh of energy.
Fresno Explores Steps to Break Away From PG&E
Leaders in Sacramento and Modesto had the foresight to exit PG&E when it was much easier to do so.
Now, in the face of steep rate increases, Fresno officials are asking, “Why not us?”
Last October, Fresno Mayor Dyer didn’t mince words in describing his frustration with PG&E. Not just with rates, but also the company’s long delays in providing power to new residences and business buildings.
“In short, PG&E is singlehandedly destroying our local economy,” Dyer said. “You know, the city of Fresno is also a utility provider. We provide you sanitation. We provide water, and we provide sewer. Perhaps it’s time we provide electricity so that we can definitely determine whether or not we energize our local businesses and home buyers.”
Then, in December, Dyer announced that the city will allow generators to provide the energy until power from PG&E is available.
Days later, the city council discussed hiring a consultant to deliver a feasibility study on Fresno becoming an electricity service provider. For example, the city could buy electricity from the private market while still using PG&E ‘s infrastructure to deliver the energy.
The council didn’t take action on the proposal, but Councilman Garry Bredefeld said that the city continues to pursue all options, including hiring a consultant, while holding PG&E accountable.