Millions of California households served by Pacific Gas and Electric Co. will pay about $384 more for utilities in 2024 to help the company prevent wildfires and meet rising electricity demand. According to PG&E, that means about $32.50 more per month for the average residential customer.
The California Public Utilities Commission approved the increase Thursday, ending a years-long debate over how much more PG&E customers will have to pay to help the struggling utility — which caused a catastrophic explosion in 2010 and major wildfires in 2017, 2018, 2019 and 2021 to support the modernization of its infrastructure, especially to increase security.
The increase in 2024 will be followed by a much smaller increase of $4.50 per month in 2025. Average bills are expected to fall by $8 per month in 2026, the company said.
The CPUC’s five commissioners voted unanimously to approve the plan, despite objections from PG&E customers who urged them to consider the financial hardship of families struggling to pay their electric bills.
“They (PG&E) continue to cause disasters and continue to be rewarded by state officials,” said a man who identified himself as Jose Lopez and intervened in the proceedings from his home in the Central Valley. “Inflation is high and people are struggling to pay their bills.”
“We can’t afford it anymore,” said a speaker named Sue Fox, who urged commissioners to adopt the “faster, cheaper” plan to prevent wildfires.
Commissioner John Reynolds, who designed the plan they voted to approve Thursday, said commissioners are “struggling hard with the additional burden these increases will place on families.”
“We know this – and yet we know that the grid and pipelines that serve these same families will need to be modernized, repaired and reinvented to meet growing demand and adapt to a changing climate,” Reynolds said .
Reynolds acknowledged that the increase in sales was unprecedented.
“It’s a historic investment,” he said.
PG&E said in a statement that more than 85% of the increase will go toward projects “to reduce risk in PG&E’s gas and electric operations.”
“We are committed to being the safe operator the people of California expect and deserve,” said Patti Poppe, CEO of PG&E. “We thank the Commission for recognizing the important safety and reliability investments we are making on behalf of our customers, including burying power lines to permanently reduce the risk of wildfires.”
PG&E bills have risen steeply over the last decade. Average monthly household electric and gas bills increased $86.51, from $154.52 in January 2016 to $241.03 in January 2023, according to PG&E data obtained by the Chronicle.
The plan sets PG&E’s budget through 2026 and sets the company’s agenda for key projects such as laying power lines underground in communities where the risk of wildfires is high.
PG&E executives lobbied hard for the increase, peppering television stations with commercials promoting the company’s demand for significantly higher revenues for putting more power lines underground. But commissioners balked at the more than $15 billion the company had initially asked for — a revenue increase of about 25% from the previous year, Reynolds said. The CPUC voted to reduce that amount to $13.5 billion.
That includes significant funding to put about 1,230 miles of power lines underground in communities where the risk of wildfires is high.
“This is the largest rate case TURN has ever seen,” said Katy Morsony, deputy managing attorney at The Utility Reform Network (TURN), a ratepayer advocacy group.
The CPUC considered two internal proposals, both of which offered less revenue than PG&E requested but differed in how much the company should spend to install power lines underground. Ratepayer advocacy groups like TURN pushed for the commission to promote a far cheaper and faster method of insulating bare wires rather than laboriously burying them. The CPUC decided to allow more buried lines.
“We are disappointed,” said Morosony. “We just need to choose the most cost-effective and fastest wildfire protection measures to protect customers and their wallets.”
Reynolds acknowledged that the commission is allowing PG&E to spend billions of dollars on laying power lines, something the company has never done before at the scale or pace approved Thursday. He said PG&E still needs to regain trust lost through “past failures,” including deadly wildfires caused by the company’s equipment and mismanagement, and prove the company can deliver.
“My message to PG&E is that your work here is not done,” Reynolds said.
Reach Julie Johnson: [email protected]; Twitter: @juliejohnson