The State Public Utilities Commission last week approved a rate increase for Pacific Gas & Electric that will raise rates by $32.50 more per month in January for average residential customers.
Millions of California homes served by Pacific Gas and Electric Co. will pay about $384 more in 2024 for utilities to help the company prevent wildfires and meet rising demand for electricity.
PG&E requested $15.4 billion for 2023. The Nov. 16 decision cut that to $1.8 billion. The decision sets the 2023 revenue requirement at $13.5 billion, which represents an 11% increase from the authorized 2022 revenue requirement.
The average residential customer will see a combined monthly electric and natural gas bill increase of $32.62 or 12.8%, compared to PG&E’s request of $38.73 or 17.9%.
Much of the funding from the new rate increase will go toward safety improvements such as underground power lines that the utility company says will reduce the risk of fires by 98%.
According to the last electric rate report by the commission’s Public Advocates Office, PG&E rates increased 92% from January 2014 to this September.
In San Lead Angelica Vásquez’s anxiety flared when she read the notice on her latest electric bill: “Please pay $135.81 by 10/26 to avoid service termination.”
But the warning is part of a bigger problem. Vásquez owes Pacific Gas & Electric Co. a total of $400.68.
For the past four months, the 43-year-old Salvadoran immigrant has been on disability leave from his job at Tesla because of a shoulder injury, he said. Vásquez was also unable to work her second job, a part-time job cleaning houses to help pay the $3,000 monthly rent on the San Leandro home she shares with her husband, two daughters and two grandchildren.
In the early hours of Nov. 9, Vásquez wanted to warm the house for her grandchildren, who needed to shower and get ready for school. But there is no power. Vásquez said he immediately called PG&E and explained that he had no money.
The utility giant hasn’t offered much help, he said.
“We had to borrow money,” added Vásquez, recounting the day his family remained without electricity until 11 p.m. “We ran out of food, so we didn’t have lunch or dinner that day. There is medicine in the refrigerator that no longer works. ”
Vásquez is one of millions of residents across the state who have seen large increases in their electric bills in recent years, increasing their cost of living.
‘We can’t afford to stay’
Appointed by Gov. Gavin Newsom all five commissioners of the Public Utilities Commission, confirmed by the state Senate for staggered six-year terms.
State regulators require PG&E and other investor-owned utilities to file an application to review their revenues and costs to establish reasonable rates.
“We are working to keep customer cost increases at or below assumed inflation for the long term, between an average of 2 and 4% a year. We are reducing our operating costs by 3% in 2022, ” PG&E said in a statement to CalMatters.
Residential electricity prices in California are more than double the national average, according to a report by the Public Advocates Office.
The Republican state Sen. Brian Dahle, vice chairperson of the Energy, Utilities and Communications Committee, said his office has received many calls from people complaining about electricity bills.
“People who can barely make it, people with disabilities, you name it,” Dahle told CalMatters. “We get the calls and they’re like, ‘We can’t afford to stay,’ and it’s heartbreaking.”
“The more money PG&E spends, the more they make and that’s not right. We have to make sure that we are accountable to them, that we finish the projects with the least amount of cost.
Dahle’s district covers 11 counties in Northern California, including those most affected by recent wildfires. The same state regulators that will vote on PG&E’s proposed increase are also considering a $45 million penalty against the utility company in connection with the Dixie Fire, the second-largest wildfire in state history that began in Butte County in 2021.
PG&E said it is building power lines underground to prevent fires and protect customers. Underground power lines, the utility giant argued, would reduce the risk of electricity-triggered fires by 98%, but would cost customers $3.40 a month from 2023 to 2026.
As of October 30, 197 miles of the 350 power lines PG&E plans to underground this year have been activated so far. That’s ahead of 180 miles of underground line by 2022 and 73 miles by 2021.
Fire mitigation isn’t the only driver of rate increases, according to the latest report by the Public Advocates Office, which was created in 1984 to represent the interests of utility customers.
“Investment and distribution is the second factor. That means replacing poles and wires with more modern equipment because some new technologies can reduce the risks of sparking the ignitions,” said Justin Ong, a chief policy adviser at the office.
The third reason for the rate change is rooftop solar incentives. In an analysis published on Oct. 2022, the office found that the cost transfer from rooftop solar to non-participating customers increased from $3.4 billion to $4.6 billion from 2021 to 2022. Ong added that if rooftop solar owners offset some or all of their share of the costs, customers without rooftop solar will disproportionately pay more.
Staying power
The quarterly rate report also noted that the average monthly bill increased by $52 for PG&E customers from January 2021 through September. In general, low-income households are the most affected by higher rates and fees.
According to a PG&E monthly disconnect data report, 19,439 PG&E customers were disconnected for non-payment in September. Of the 5.6 million residential accounts in September, nearly 1.4 million of those accounts were enrolled in a program that gives low-income customers a 30 to 35% discount on their electric bill. and 20% discount on their natural gas bill. More than 38,000 customers are enrolled in another program for families with slightly higher incomes that offers an 18% discount on their electric bill.
When asked to comment on PG&E’s proposed increase, Ong said he could not provide details on the matter.
However, he added: “There is no silver bullet to solve our rate crisis. Many of our investments in utility investments are like a mortgage. When they are made, they are spread over decades. We strive to develop solutions to reduce the energy burden of households, especially the lowest income households.
Ten miles south from PG&E headquarters, Vásquez sits near the corner of his living room where a tall lamp shines on his face while his two grandchildren sleep nearby on the couch.
Vásquez said the two children are excited for Christmas, but she is worried about money. Soon she will return to Tesla and work with her daughters cleaning houses.
Although her husband’s job as a construction worker helps cover most of the basic utilities, it won’t be enough later this year because the holiday lights add to the cost of the bill.
“Should I tell them it’s a Christmas without lights?” she asked, staring at her grandchildren. “It’s getting hard to live here.”
Justo Robles is a CalMatters reporter.
