Pacific Gas and Electric Co. is poised to surprise its customers with a significant increase in monthly bills in January, an increase that comes amid an unprecedented increase in electric rates for Californians over the last decade.
Over the past eight years, average monthly household bills for electric and gas combined increased by $86.51 – from $154.52 in January 2016 to $241.03 in January 2023, according to PG&E data , which are available to the Chronicle.
And average bills will rise even further – by $25 to $31 in January – depending on how state regulators vote Thursday.
Residential electricity prices in California have far exceeded the rate of inflation, as electricity prices have risen to more than double the national average over the past decade. In its most recent quarterly report, the California Public Utilities Commission’s Public Advocates Office said rates for residential customers increased about 92% between January 2014 and September 2023.
“It just keeps going up,” said Jerrie Groves, a 33-year-old single mother from Bakersfield, who said her PG&E electric bill averages about $500 each month. “It’s the biggest stress and bill I have.” (Bakersfield is near the southernmost point of PG&E’s service area.)
Electric bills are becoming a growing burden for PG&E customers like Groves, who works at a Costco food court and has four children ages 9 to 14. Groves said she tried to minimize her family’s electricity use, but with four children, it was a challenge.
“It doesn’t seem to matter what I try, like not running the air conditioning — it’s still very high,” Groves said.
Historically, utility rates have generally kept pace with inflation, but that began to change in 2013, according to the CPUC. And catastrophic wildfires have pushed costs even higher for PG&E and its customers since 2021.
PG&E is entitled to recover certain operating and capital expenditure costs from its customers, including critical wildfire suppression and prevention projects. The largest wildfire-related costs passed on to customers to date include tree removal programs and wildfire liability insurance, according to the CPUC.
PG&E has cut its vegetation management program as part of the company’s cost-cutting efforts. But with its new budget, PG&E is preparing to spend billions of dollars to strengthen thousands of miles of power lines in regions at high wildfire risk by either burying power lines or insulating bare wires.
State regulators will decide Thursday how much PG&E can spend on these and other programs.
PG&E spokeswoman Lynsey Paulo said the big increase in interest rates in 2024 is likely to be an anomaly, and PG&E expects to keep future rate increases “at or below” the rate of inflation. The company is trying to reduce costs wherever possible – in 2022, for example, the company reduced operating costs by 3%, she said.
“We understand the impact of any rate increase on our customers and are committed to carrying out important safety and reliability work in the most cost-effective manner possible,” Paulo said.
Some California lawmakers fear that rising electricity costs in California are undermining the state’s efforts to phase out natural gas by encouraging greater reliance on electric vehicles and appliances.
State Sen. Josh Becker, D-Menlo Park, said he and others in Sacramento are discussing how the state could intervene to reduce the amount utility customers pay for statewide programs such as building transmission lines and utility subsidies for low-income households. For example, some of the money could come from the state’s general fund or from a bond.
“Proportionately speaking, a small portion of our rates actually go to the distribution and transportation of energy — a large portion of which is wildfire costs,” said Becker, chairman of the Senate Appropriations Committee’s Subcommittee on Resources, Environmental Protection and Energy.
The CPUC is also considering restructuring electric bills for PG&E and the two other state-owned utilities to add a fixed fee while reducing the amount people pay per unit of electricity by about a third. For low-income households, the fixed fee would be lower and cover essential costs such as infrastructure maintenance and improvements. A decision is expected next year.
Reach Julie Johnson: [email protected]; Twitter: @juliejohnson