In a long-delayed aftershock of the 2010 San Bruno pipeline blast, the amount of money Pacific Gas and Electric Co. collects from customers each year to upgrade its natural gas network could soar 83 percent by the end of 2017, under two proposed decisions from California regulators.
While less than PG&E wanted, the multiyear increase would hit customers hard — a result that consumer advocates call unfair.
In the first year, the average household would pay about 11 percent more per month for natural gas service, according to the California Public Utilities Commission, which issued the proposed decisions late Thursday. Further increases would almost certainly follow. But the commission did not offer estimates for how much gas bills might rise through 2017, and did not respond to a Chronicle request on Friday to provide them.
Average monthly gas bills for households served by PG&E vary with the seasons, currently ranging from $30 in May to $98 in January. The upgrade fees represent only a portion of a customer’s bill, which also covers the wholesale cost of the gas used.
The CPUC commissioners could vote on the proposals as soon as June 9. That vote is long overdue, delayed by a scandal that tarnished the reputations of both the commission and PG&E.
Following the San Bruno explosion, which killed eight people and destroyed 38 homes, PG&E submitted a request in December 2013 to raise the amount it would collect for pipeline work over three years — 2015, 2016 and 2017. But in 2014, emails disclosed by PG&E showed that company executives had lobbied some commissioners to influence which CPUC administrative law judge would handle the gas-rate case.
PG&E initially wanted annual gas revenue to rise in steps from $715.4 million in 2014 to $1.5 billion in 2017. Both of the proposed decisions issued Thursday would give the utility $1.3 billion in 2017, with the money paying for inspecting, testing, upgrading and, in some cases, replacing pipelines across Northern and Central California.
The decisions also would make PG&E shareholders, not utility customers, liable for $164 million in extra expenses caused by the delay in the case.
The two proposals differ in one key respect. After the massive Porter Ranch natural gas leak near Los Angeles, which did not involve PG&E, one of the proposed decisions directs PG&E to report on the safety and inspections of its own gas storage facilities.
PG&E on Friday said it was still reviewing the lengthy proposals. The company’s critics, meanwhile, were unimpressed, saying the proposals would force PG&E customers to pay for fixing the utility’s long-running mismanagement of its gas system.
“This decision asks a great deal of PG&E’s customers,” said state Sen. Jerry Hill, D-San Mateo, whose district includes San Bruno. “The PUC must finally make sure and guarantee that PG&E is improving gas system safety, and not diverting money into bonuses and profits as it had done in the past.”
The commission could choose to offset some of the increases with money taken directly from PG&E’s profits.
Last year, the commission ordered PG&E to spend $850 million of shareholder money on gas safety improvements. Both proposed decisions issued Thursday include the option of allocating a portion of that money to offset some of the revenue increase facing customers. The average monthly residential bill would rise 9.9 percent during the first year as a result.
“The big issue in the case is not whether the (pipeline) projects are worth doing,” said Tom Long, legal director for The Utility Reform Network consumer group. “The issue is, who should be paying for those projects?”
The PUC says that in the first year, the largest chunk of revenue, $164.5 million, would go to replace about 60 miles of old pipe in PG&E’s gas network. Another $59.2 million would be spent on in-line inspections and making roughly 135 miles of pipeline “piggable” — suitable for inspection robots known as pigs that run inside the pipe.
About $52.5 million would be devoted to automating and upgrading 38 gas shut-off valves. And $148.4 million would go to testing the strength of 170 miles of large transmission pipelines.