California residents are feeling the pain of record PG&E bills, but there may be more hikes on the way

More and more Californians are quite literally failing to keep up with ever-increasing energy bills.

By the end of last year, PG&E customers owed more than $650 million in unpaid energy bills, according to data compiled by The Utility Reform Network. Customers of California’s other investor-owned utilities are similarly behind by hundreds of millions resulting in a statewide 500% increase in back-owed utility bills since 2019.

Nearly 182,000 households served by PG&E who fell behind had their electricity cut off for nonpayment in 2023, almost a quarter of which were never reconnected.

As new PG&E rate increases set in this year, Northern California community forums have filled with conversations about the toll of eye-popping energy bills.

One post in a Humboldt County Facebook group described a bill of nearly $600 for her 1,100 square-foot home despite cutting back on energy use.

Another poster, one of 600 in the thread, commiserated: “I live alone in a little trailer, and mine was $200 this month. I use nothing, sit around in layers of clothes and blankets, barely use the heater, and I still can’t afford it.”

It’s not the first time utility bills have risen to record levels, which is precisely the problem for customers who have, year after year now, been hit with climbing energy costs.

In January, combined PG&E gas and electric charges rose 22.3% over average monthly bills a year before. And, they could soon hit a grim new milestone of an average $300 per month. Those costs far outpace PG&E’s stated goal of working toward keeping bill increases at or below inflation, or between 2 and 4%.

Utility advocates and legislators say outreach from frustrated or desperate customers has reached a fever pitch. There’s concern, too, about how high electricity costs will affect the feasibility and buy-in for the state’s massive electrification push.

“I have seen and heard more outrage from everyday customers than I ever have,” said Mark Toney, executive director of The Utility Reform Network (TURN), a nonprofit consumer advocacy organization. “Every elected official I run into is telling me that they are just buried with calls from constituents.”

Indeed, that’s been state Sen. Bill Dodd’s, D-Napa, experience. “I’m hearing constantly from people in my district that are absolutely blown away by their energy bills,” he said. "The rates just keep going up and up, and it’s certainly not sustainable. We need to reverse the trend.”

It doesn’t help that as customers continue to bear the brunt of high energy costs, PG&E, last month, announced a nearly 25% jump in profits for 2023, earning more than $2.2 billion. The 2024 outlook is looking similarly rosy for the energy giant. That’s a big shift for the company that has struggled financially since declaring bankruptcy in 2019 after causing a series of devastating wildfires.

The money recouped from ratepayers in part goes toward safety improvements and wildfire mitigation necessary to adapt to a changing climate. But today's need for massive investment can also be attributed to the utility's long history of neglected maintenance, which is widely considered to be a result of putting shareholders ahead of customers.

PG&E spokesperson Mike Gazda said the company is “exploring all opportunities to help lower the cost of energy for customers.” The recent profit announcement “that indicates a return to financial health is a good sign for customers,” he said. “Steady financial footing for PG&E means the company will have access to lower financing rates to fund critical infrastructure investments, savings that will help lower bills over the long run.”

Still, that doesn’t mean an immediate stop to rate hikes. Toney, of the utility reform group, noted that there are a number of rate increase requests under consideration by the California Public Utilities Commission (CPUC). In fact, on Thursday, March 7, regulators will decide whether to approve the collection of hundreds of millions of dollars from PG&E customers. That increase would allow PG&E to start charging for a portion of a larger proposal filed Dec. 1 by the utility that is still pending approval. If allowed, that could kick in as early as April or May.

“It's a smaller increase between four to six dollars a month,” said Toney said. “But, at this point, every increase is just piled on top of what people are already seeing, and we're not done for the year by any stretch in terms of increases, I can guarantee you.”

According to PG&E’s Gazda, the December rate request was designed to recover costs that fall outside usual proceedings, for instance, for response to emergencies like last year’s severe winter storms. Early approval of a portion of those costs will help lower customer rates in the long-term, he said. More broadly, he said PG&E has taken a number of steps to reduce customer costs through operating expense savings and streamlined work practices. He pointed to a reduction of $300 million in vegetation management costs and $70 million in saved undergrounding expenses in 2023. Gas supply management techniques also saved customers over $1 billion last year, Gazda said, and efforts in coordination with advocates on commercial insurance alternatives could save up to $1.8 billion over the next four years.

PG&E is forecasting that bills could increase by roughly $15 for the rest of 2024 with expected decreases over 2025 and 2026.

Much blame for increasing rates has also been leveled at the governor-appointed CPUC, which has the power to approve, adjust or reject requests for higher rates by PG&E and other providers.

In a December decision, the commission authorized $2 billion less in ratepayer revenue than requested by PG&E. However the amount approved still pushed bills to new heights. It has also launched a number of programs aimed at helping customers least able to pay their utility costs though these are limited in eligibility and space.

Still, “the majority of the commission certainly has been rubber-stamping rate increase after rate increase,” Toney said. He is heartened, however, by the recent appointment of the CPUC’s top ratepayer advocate to the five-seat commission. He added that there’s an upcoming opportunity for regulators to show more than “empty lip service” to affordability.

“The PUC has a chance on March 7, to look at the increase that is before them and say, ‘You know what? The shareholders can afford to eat this. The shareholders are doing better than the customers. That would be a step in the right direction for the PUC.”

Rising energy costs have inspired a number of efforts on the legislative front in 2024. A bill introduced in January by state Sen. Dave Min, D-Orange County, SB 938, would prohibit investor-owned utilities from passing on lobbying and advertising costs to ratepayers. While technically already barred, supporters say loopholes abound. Last month, Dodd introduced SB 1003, aimed at ensuring the fastest and most cost-effective wildfire mitigation strategies are pursued by utilities companies, for instance, weighing the timeline and costliness of undergrounding against alternatives like insulating existing energy cables. He also signed on as a co-author to legislation reexamining the details of a plan that would adjust bills with a fixed rate based on your income.

Overall, there’s a need to go back and look at all the different costs that ratepayers are expected to shoulder, Dodd said. “It’s high time we really take a look at all the components and try to determine what’s appropriate in 2024 given everything we’re going through and what’s not.”

“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 X (formerly Twitter) @InYourCornerTPD and Facebook @InYourCornerTPD.