PG&E bills to increase roughly 13% starting Jan. 1

The California Public Utilities Commission Thursday approved a rate increase for Pacific Gas & Electric customers that will also shape the utility giant’s wildfire mitigation plans.

The move will raise customer bills by roughly 13% starting Jan. 1.

The lead up to the decision between two options to raise rates was marked by heated debate and heavy lobbying. The vote was even delayed by two weeks to give commissioners more time to deliberate.

“We as a commission have struggled mightily with the additional hardship these increases will create for families,” said CPUC Commissioner John Reynolds who sponsored the winning proposal. “We know this, and yet we also know that the grid and the pipelines that serve the same families need upgrades, repairs and reinvention to meet growing demand and to adapt to a changing climate.”

With either plan, customers were going to feel the squeeze. Both proposals would have raised rates, but not as high as the 26% PG&E requested.

PG&E customers have repeatedly shouldered increases that have far outpaced inflation and strained communities across the utility’s service region. According to the latest quarterly report on electric rates from the Public Advocates Office, the CPUC’s independent consumer advocate, monthly bills went up an average $52, or 38%, between January 2021 and September 2023. In the last decade, costs have increased more than 90%. Rates have similarly risen for California’s other large investor-owned utilities, San Diego Gas & Electric and Southern California Edison.

With no notable change in utility use, retiree Ron York of Petaluma has seen his PG&E bill go from an average $278 per month in 2021 to $340 the next year to a steady ballpark of $400 per month now.

“Recognizing that is a 45% increase,” York said of yet another potential double-digit rate hike: “How in the mind of any logical person is this reasonable?” He noted, too, the many millions of dollars in executive bonuses and CEO compensation in the same time frame.

“No matter what the rate increase is, it’s the tip of the iceberg because PG&E has multiple requests currently pending, and every increase tacks on top of each other,” warned Mark Toney, executive director of The Utility Reform Network, a nonprofit consumer advocacy organization. “This is one of many. That’s the big picture.”

PG&E acknowledged there were other rate requests before the CPUC but spokesperson Lynsey Paulo said the utility is “aggressively focused on how to deliver work safely at a lower cost.” She pointed to the company operating cost reduction of 3% in 2022 and an expected cost savings of $370 million in 2023, among other efforts.

Implications for safety strategy

The general rate proceeding, as it’s known, also helps to determine what strategies PG&E will pursue to harden infrastructure against wildfire risk.

For Toney and other experts and advocates, PG&E’s emphasis on undergrounding — the utility is pushing to bury 10,000 miles of power lines in 10 years — is more about investor profit than customers’ best interest.

With the project’s massive sticker price, interest and finance fees, Wall Street stands to benefit enormously, Toney said. Undergrounding at such an enormous scale is time-consuming and expensive, the burden of which customers will bear, Toney said, while other options, like insulating power lines and upgrading aged equipment, are more cost and time efficient with comparable safety benefits.

But, PG&E’s Paulo challenged that motivation and said “undergrounding provides permanent risk reduction that improves reliability and resilience in all extreme weather conditions in the face of growing impacts from climate change.

It “will save customers billions of dollars over the longer-term in avoided costs of tree trimming and removal and overhead line maintenance costs that will no longer be needed.“

The original commission proposal favored more investment in overhead hardening with less undergrounding while the alternative, which ultimately won by unanimous vote, proposed more undergrounding, though with less mileage than PG&E originally requested. Commissioners framed it as a fair compromise, though some consumer advocates, including FAIR California, a new coalition of ratepayers, labor unions, small businesses and environmental groups, charged the alternative proposal bent too far toward PG&E’s interest.

The Utility Reform Network said it was “profoundly disappointed” in a press release after the vote.

Critics have said PG&E has yet to make up for its long history of prioritizing profit over system maintenance and safety that led to aging infrastructure that, combined with climate change, sparked a series of deadly and devastating wildfires in recent years.

Since 2017, the utility has caused more than 30 wildfires that have killed 113 people and torched almost 24,000 homes. Facing rising liabilities, PG&E declared bankruptcy in 2019. Tens of thousands of fire victims ended up with a settlement fund, half in PG&E stock, that has yet to make them whole.

PG&E has worked to improve communications with customers and has outwardly acknowledged past mistakes. However, despite the utility’s stated commitment to change course, many remain skeptical that the utility has adequately realigned its priorities or that lawmakers and regulators will enforce accountability.

A decision earlier this year to cut back on tree trimming further raised concerns over PG&E’s handling of vegetation management. Many have also raised questions around the decision making process, the pace of undergrounding, and the utility’s rollout of its Enhanced Powerline Safety Settings, which have greatly reduced ignitions but resulted in repeated unplanned blackouts in some communities.

2017 Tubbs Fire Victim and advocate Will Abrams said that PG&E’s impact on affordability for many Californians goes beyond rate increases. He points to spiking homeowner and rental insurance costs as a result of increasing wildfires, in many cases sparked by PG&E.

“The through-line across the primary challenges to affordability, safety and general livability in California often points to PG&E,” Abrams said.

Regulator responsibility

Instead of considering the broader connections and implications, major utilities like PG&E continue to be let off easy in Abrams’ view — given consistent rate increases while getting slaps on the wrist from regulators for wrongdoing.

The CPUC’s recently proposed $45 million penalty against PG&E for its role in the massively destructive 2021 Dixie Fire included $2.5 million for the California General Fund, $2.5 to tribes affected by the fire and $40 million in capital expenditures dedicated to upgrading PG&E’s own records system.

“They’re able to raise rates without evidence that they are going to address the risks of insurance providers and residents in California,” Abrams said, “while at the same time they’re getting what the CPUC calls a fine but is really a reward, allowing them to spend $40 million of a $45 million fine on their record keeping which is something they already should have done.”

PG&E has been convicted of criminal negligence related to record keeping in the past, and the CPUC found the utility falsified internal safety records for years.

The CPUC has also levied hundreds of millions in other fines against PG&E, issued corrective actions, and placed the utility into enhanced oversight.

In the Thursday proceedings, commissioners signaled a desire to rein in rates but noted the tough position they faced

“This is a very hard decision because this is the situation we are in,” commissioner John Reynolds said. “We’ve been talking for several years now about the coming burden of wildfire and climate change driven costs and other needed upgrades.” But, he added, I’m confident that you’re getting something out of this investment.”

To understand ever-increasing utility customer costs, it’s important to understand the evolution of the CPUC’s role and a shift in the state’s energy project investment strategy more broadly, according to Joe Como, who served as a legal adviser for a CPUC commissioner and then chief counsel and director for the CPUC’s Public Advocates Office until 2016.

Increasingly, utilities have taken over the lead on social programs — projects to increase energy efficiency or reduce greenhouse gas emissions that were traditionally financed through state funding. While these are essential efforts, Como contended, shifting the responsibility to private utility corporations has meant the costs have been funneled through customer bills instead.

“Here we are in 2023, and the rates we’re paying now are much higher than inflation and what we’ve found is they haven’t maintained their systems,” Como said. Meanwhile, and compounding the problem, the CPUC transformed from the watchdog it was initially created to be to a “policy agency” failing to rein in rates along the way.

In the Thursday hearing, caller after caller pleaded with commissioners during public comment against PG&E rate increases and for more scrutiny for the utility.

“The CPUC was designed to help the people,” said one woman who has attended the regulators’ meetings for a decade. “We need your help. Do your job.”

“In Your Corner” is a column that puts watchdog reporting to work for the community. If you have a concern, a tip, or a hunch, you can reach “In Your Corner” Columnist Marisa Endicott at 707-521-5470 or marisa.endicott@pressdemocrat.com. On Twitter @InYourCornerTPD and Facebook @InYourCornerTPD.