PG&E monthly rates may rise
Pacific Gas & Electric’s customers were warned about the cost of massive wildfires that it may have sparked. Even before California’s largest utility filed bankruptcy proceedings at the start of the year, lawyers, policymakers and consumer advocates all cautioned that the company’s liabilities in those fires would, one way or another, hit the pocketbooks of its 16 million customers.
So how much could consumers throughout Northern and Central California be facing in higher costs?
The full picture isn’t clear yet. PG&E is seeking double-digit rate increases to help reduce the risk of future fires. But there isn’t agreement yet on how much the company will be held financially responsible for the deadly and destructive wildfires in 2017 and 2018. And officials don’t know how much of that liability might be passed on.
Just recently, U.S. Bankruptcy Judge Dennis Montali ruled that a jury can decide whether the utility is liable in the Tubbs fire in Sonoma County, even though investigators pinned the source on private electrical equipment, not PG&E.
One thing is sure: Consumers will shoulder a big share of any liabilities. Here’s what is clear so far about how much PG&E’s rates could go up.
How much does PG&E charge?
PG&E’s customers are already paying some of the highest electricity rates in the state, if not the country. The utility’s average rate is 20.06 cents per kilowatt hour, compared with an average 16.06 cents statewide and 10.48 cents nationally.
But those higher rates are offset by California’s higher efficiency. The state’s average monthly consumption is about 300 kilowatt hours less than the U.S. average, with California’s average monthly electricity bill at $101.49 compared to $111.67 nationwide.
The average residential PG&E customer pays $113.64 a month for electricity and $52.30 for gas, or about $165.94 a month, according to the company.
How much have rates already risen?
In the past decade, the utility’s rates have been going up faster than inflation. According to the Public Advocates Office, residential rates have risen 31% between 2009 and 2019 — higher than the consumer price index of 19%.
But PG&E isn’t alone. While Southern California Edison rates largely appear to keep track with inflation at 18%, San Diego Gas & Electric’s have jumped 51% in the past decade. That’s partly because SDG&E’s customers have been installing solar panels at a higher rate, which distorts the average cost because each customer appears to be consuming less electricity.
How much more will customers’ costs go up?
The average residential PG&E customer could pay nearly $300 more a year in the next three years, or a 15% increase in their monthly bills. This is because the utility is asking permission from state regulators — separately from the bankruptcy proceedings — to increase its revenue in two ways. Most, but not all, of the new revenue would be passed to consumers.
First, PG&E has asked for a three-year increase totaling $2 billion. That would include a 12.4% jump next year, a 4.7% increase the year after that and a 4.8% hike in 2022. That’s nearly a 22% rise. PG&E says much of the extra money is needed for fire-safety improvements such as more fire-resistant poles, covered power lines, new weather stations and high-definition field cameras.