Starting January 1st, PG&E implemented a 13% increase in electricity rates. This surge, amounting to an additional $33 monthly for a typical household, is allocated for the burial of power lines and further measures to prevent wildfires.
However, this might be just the start of escalating costs.
PG&E has proposed further rate increases of $14 monthly per household starting in March. This is intended to cover expenses for storm damage repair and ongoing wildfire prevention. Moreover, PG&E revealed to its shareholders that it plans to recover billions more already spent.
Mark Toney, leader of The Utility Reform Network (TURN), a consumer advocacy group, expressed significant concern.
He pointed out that PG&E is compensating for earlier undercharges, having exceeded its authorized budget for tree trimming and other wildfire prevention measures from 2020 to 2022. PG&E’s financial reports to the state regulators show an expenditure of $9.3 billion, surpassing the approved $4.7 billion for vegetation management.
Toney highlighted that PG&E aims to recoup the entire $9.3 billion overspend.
He anticipates PG&E requesting an additional average rate hike of $43 per month to address this previous overspending. This could lead to a total increase of nearly $100 monthly by year’s end.
Such significant hikes could strain numerous families unprepared for an additional $100 monthly expense, Toney added.
However, PG&E’s current projections indicate a total increase of approximately $50 in 2024. This estimate includes the January hike and all other pending rate increase requests, offset by the expiration of some prior hikes.
This comes as PG&E plans to resume paying dividends to shareholders in 2024 for the first time since its 2018 bankruptcy and reorganization. Ratepayer advocates like Toney argue that shareholders should also help mitigate customer rate increases.
Mike Campbell from the California Public Advocates Office, an oversight branch of the Public Utilities Commission, notes that the January increase positions PG&E as the state’s highest-cost electricity provider, surpassing San Diego Gas and Electric.
“PG&E rates have more than doubled in the last decade,” Campbell said, labeling PG&E as a leader in recent rate hikes.
Advocates suggest that future increases should be pre-justified by PG&E.
“They must adhere to their budget like everyone else,” Toney said, proposing spending caps and accountability for expenses exceeding authorized limits. “There need to be boundaries on these rate increases; continuous double-digit growth year after year is unsustainable.”
PG&E acknowledges dealing with storms and other unforeseen events, leading to substantial extra costs. These are in addition to their efforts in cutting a million trees along its 100,000-mile power line network to prevent wildfires.
PG&E stated, “Every day, we are enhancing the safety and resilience of our electric system for our customers amidst changing climate conditions. This includes crucial safety measures directed by our regulators, such as repeated inspections of parts of our system annually.”