PG&E gets go-ahead from PUC to raise residential rates 5.8 percent

Steve Dempsey/Staff

A PG&E service truck drives down Ygnacio Valley Road in Walnut Creek, Calif., on Aug. 16, 2012.

SAN FRANCISCO — PG&E residential customers can expect a 5.8 percent increase in their gas and electricity bills starting in September following a decision Thursday by state regulators about the utility’s request for higher power rates.

The decision by the state Public Utilities Commission was the first general rate case for PG&E that occurred after the disastrous natural gas explosion in San Bruno that killed eight people and wrecked a quiet residential neighborhood in that city.

“This is not in any sense a business as usual rate increase for PG&E,” PUC Commissioner Michael Florio said just before the 5-0 PUC vote to approve the higher rates.

Overall monthly bills for an average residential customer will increase $7.50, up from the current average bill of $129 a month, according to an estimate provided Thursday by PG&E.

The current electricity bill of $80 would rise $3 a month, or 3.8 percent. The average current gas bill of $49 a month would rise $4.50, or 9.2 percent.

Higher gas bills are expected to begin in September, and the higher electricity bills should go into effect in October, PG&E spokesman Jonathan Marshall said.

San Francisco-based PG&E expects to use the increased revenue to finance an array of projects and activities, including a new gas control center in San Ramon, an aggressive program to detect natural gas leaks and an improved smart grid program to upgrade the reliability of the electricity system.

The decision comes amid a pending fine of up to $2.25 billion against PG&E that is being considered by the PUC, as well as a federal criminal case on felony allegations against the utility that could result in fines of up to $1.13 billion. None of the revenue from the rate case that the PUC approved Thursday will be used for payments of any of the potential fines, Marshall said.

PUC officials pointed out that their decision was based in part on whether the increased revenue would improve safety and reliability for PG&E’s gas and electricity system.

“The focus on safety is appropriate,” PUC Commissioner Catherine Sandoval said just before the vote.

Consumer groups lambasted the decision.

“We keep paying more and more and we are not getting what we paid for,” said Mindy Spatt, a spokeswoman for The Utility Reform Network, a consumer group. “This is business as usual for PG&E.”

The PUC ruling authorized an increase of $460 million in revenue for the utility. PG&E’s initial request in late 2012 was for a revenue increase of $1.16 billion, so the final decision represented a 60 percent cut from the original proposal.

“Although the decision represents a significant cut in our request for additional resources to modernize our system for the 21st century, we will continue to make safety our top priority,” Pacific Gas and Electric president Christopher Johns said. “Our residential bills will remain well below the national averages for gas and electric service.”