OAKLAND — PG&E customers face a fresh round of increases in monthly bills — yet again — because the utility seeks to win regulatory approval of early collections even before a key rate case is decided.
The most recent request from PG&E sketches out a proposal for an eyebrow-raising $1.46 billion to cover the utility’s recent spending on wildfire mitigation, as well as to help the company stabilize its financial situation.
Some people might deem higher PG&E monthly bills to be something of a familiar refrain.
Just last Nov. 16, the state Public Utilities Commission approved a general rate case that authorizes PG&E to raise monthly bills by $32.62, a head-spinning jump of 12.8% over the current level of monthly bills. The increase will arrive on Jan. 1, 2024, right after the current holiday shopping season is in the books.
Should the PUC approve this latest PG&E proposal for higher rates on an interim basis, monthly bills would jump on May 1, 2024 — just a few months after the January bills head higher.
In January 2023, PG&E monthly bills were in the vicinity of $240.73 for customers who receive combined electricity and gas services. The recent approval of the general rate case would bring bills for combined services to about $273.35 a month.
The interim rate request, the Jan. 1, 2024 utility cost changes, and other PG&E-related PUC actions could coalesce into a potentially huge jump in monthly bills by the spring of 2024, warned Mark Toney, executive director of The Utility Reform Network, or TURN.
“2024 is shaping up to be a painful year for PG&E customers, who may be looking at bill increases of $40 to $60 a month more than in 2023, once all the increases are added up,” Toney said.
PG&E is seeking approval of the interim rates to cover recent expenditures in 2022 and 2023 that were linked to wildfire mitigation, vegetation management and catastrophic events such as winter storms that required extraordinary responses by the utility.
Unexpectedly, however, PG&E also warned regulators that an increase in utility collections is required because the company now must confront an intensified squeeze on its finances, the utility stated in a filing with the state PUC.
“Interim rate relief would help mitigate the extraordinary financial pressure currently facing PG&E,” PG&E stated in the regulatory filing.
Interest rates are at sky-high levels and inflation is greatly elevated. These circumstances, in turn, can make labor and materials more costly and cause expenses to soar.
“Current financial conditions make financing large expenditures particularly challenging,” PG&E stated in the regulatory filing.
Oakland-based PG&E said its interim request would allow the company to collect $1.6 billion. The state PUC is slated to issue a final decision on the wildfire mitigation, vegetation management, and catastrophic events case by sometime in late 2024.
“Without rate relief, PG&E would carry more than a billion dollars in costs, which could negatively impact our credit metrics and ability to secure competitive finance rates for capital investments and increase the cost of capital,” PG&E spokesperson Mike Gazda said in comments emailed to this news organization. “The relief also helps to more appropriately allocate costs to those who were customers when the costs were incurred.”
PG&E has been linked to a string of disasters, including a lethal gas explosion that destroyed a San Bruno neighborhood and a string of destructive — and in some cases deadly — wildfires across Northern California.
In 2016, a federal jury found PG&E guilty of crimes the utility committed before and after the San Bruno explosion. In 2020, PG&E pleaded guilty to 84 separate counts of involuntary manslaughter and admitted that the company’s equipment started the 2018 Camp Fire that torched the town of Paradise.
“PG&E recognizes our responsibility to serve our customers safely and reliably, and we are aggressively focused on how to deliver work safely at a lower cost,” Gazda said. “We maintain a critical focus on wildfire safety.”
If PG&E is granted permission to collect the interim revenue on an expedited timeline, the utility said it will issue any appropriate refunds to the customers, with interest, should any overcollections occur.
The utility expects to disclose a more precise estimate in the next few weeks regarding the average monthly bill for the typical customer who receives electricity and gas services from the utility.
By Jan. 1, 2024, PG&E bills are expected to be roughly 13% higher than they were at the start of 2024. The Bay Area inflation rate rose 2.8% over the one-year period that ended in October. Put another way, PG&E bills are rising four times faster than the region’s overall inflation rate.
“We are working to keep customer costs at or below assumed inflation for the long-term, between an average of 2% and 4% a year,” Gazda said.
Regardless of the outcome of this and other PG&E cases, TURN executive director Toney believes that formal annual curbs should be imposed on skyrocketing utility bills.
“The greed of utility executives and Wall Street investors may have no limits, but customers who are falling behind on their bills need a cap to unlimited bill increases,” Toney said.
Source: www.mercurynews.com