Customers of Pacific Gas & Electric could be facing yet another bill increase — possibly as early as this spring.
On Thursday, the California Public Utilities Commission issued a proposed decision that would allow PG&E to start collecting $516 million in revenues for what the utility spent on wildfire safety and infrastructure upgrades several years ago.
The Utility Reform Network, which advocates for ratepayers, says the proposal would hike customers’ bills on average by $4 to $6 per month. And that’s on top of the $35 average monthly increase that went into effect on Jan. 1, plus other rate hike proposals pending before the PUC.
Watch: These PG&E Rate Hikes Are Just the Tip of the Iceberg
The proposed decision also would give PG&E the authority to begin collecting from customers before the PUC’s final ruling on a $688 million spending-recovery request from PG&E.
The proposed decision, written by chief administrative law judge Michelle Cooke, says the utility company needs the money now to preserve its creditworthiness and also to spread out the costs to consumers over a longer period.
Investors vs. Customers
TURN says the state agency should be more concerned about families having their power shut off because they can’t afford the higher costs than about PG&E’s investors.
Since Jan. 1, 2023, PG&E customer bills have climbed by 33%, said Mark Toney, TURN’s executive director. Customers will see the impact of the rate hike that took effect on Jan. 1 in their bills arriving later this month, he said.
“The real pain is yet to come,” he said.
The proposed decision by the PUC would permit PG&E to start collecting money from customers for expenses that the PUC has yet to review and that were incurred by the utility between 2020 and 2022, Toney said.
The PUC will consider adopting the proposed decision at its March 7 meeting. The public may comment in person in San Francisco or by phone at 800-857-1917 (passcode 9899501# for English, 3799627# for Spanish).
PG&E Overspending Without PUC Authorization
PG&E had been authorized to spend $4.7 billion on wildfire mitigation and other costs but overspent by $10 billion, Toney said. A 2019 state law apparently gave carte blanche to the utility to spend freely without prior authorization. PG&E is guaranteed a specified profit, so $14 billion would generate more profit for investors than $4 billion.
AB 2154 created the California Wildfire Fund to provide insurance protections to utilities in the event of catastrophic wildfires and to prevent them from going bankrupt. It was designed to give PG&E some flexibility in spending and the ability to recover its costs later, but “I don’t think anybody imagined that they would have overspent by this magnitude, ” Toney said.
The PUC was criticized by state auditors in a report last year that said the state agency doesn’t do enough to verify utilities’ stated costs and spending.
Bills Going Even Higher?
In addition to the Jan. 1 rate hike and the proposed decision, PG&E submitted a request in December to the PUC to raise monthly bills by another $14 on average, and other rate hikes are also on the table pending PUC action, Toney says.
This seemingly nonstop series of rate hikes is why TURN is pushing the Legislature to set a cap on how much bills can increase annually, saying it should be linked to cost-of-living adjustments provided by Social Security.
In addition to making downright electricity unaffordable to the lowest-income households, higher bills will be a disincentive to Californians who are being urged to replace gas-powered stoves, water heaters, HVAC systems, and vehicles with ones powered by electricity, which the state is depending on to meet its climate goals, TURN says.
Setting a rate cap would apply to mandates required by the Legislature as well as rate hikes authorized by PUC, Toney said.
For example, the Legislature required the utilities to install charging stations. But the cost of that is borne by ratepayers, not the utilities’ investors, he said.
“All the different mandates that they say the utilities must do that and the utility must do this. But there’s only one place that money’s coming from, and it’s from our pocketbooks,” Toney said. “So the point of this bill is also to not just put the brakes on what the CPUC is doing. It’s also to put the brakes on what the Legislature is doing.”
So far TURN has yet to find a legislator willing to introduce a bill that would impose annual caps on utility bill increases, he said.
However, Sen. Dave Min, D-Irvine, has introduced a Senate bill that would prevent utilities from spending tens of millions of dollars collected from ratepayers for television commercials or advertising or for the attorneys who are hired by the utilities to lobby the PUC for rate hikes.
“Why should ratepayers pay for PG&E to lobby for a rate increase?” Toney said.
Watch: How to Comment on CPUC Proceedings