PG&E and state regulators should take steps to ease the sting of soaring power bills during the winter — a surge that could be followed by even worse rate shocks this summer and next winter — a key state lawmaker demanded, and the Public Utilities Commission on Thursday said it’s preparing solutions.
The requests came after wide-ranging research by the staff of state Sen. Jerry Hill, a San Mateo County Democrat. The study determined that a new rate structure, flaws in how customer usage is tracked, higher regulator-approved power rates and a winter that chilled California, combined in a unpleasant mix to unleash bills that have skyrocketed for some customers.
“The research shows that the most vulnerable are being hit the hardest at a time when they need heating the most,” Hill said Wednesday.
The outcry over rising power bills has surfaced just weeks after PG&E was branded a convicted felon when it was sentenced for crimes it committed before and after a fatal explosion in San Bruno.
A series of rate increases that began in August 2016 have battered PG&E customers with sharply higher gas and electricity bills. The higher rates — and the sharply rising bills that followed — were proposed by PG&E and eventually approved by the PUC. The PUC has been accused of a cozy relationship and lazy supervision of PG&E.
“There are things that can be done to mitigate the pain,” Hill said. “And bills could be much higher next winter. We need to find things to help ratepayers understand how rates work, and give them tools to better control their utility charges.”
Gas bills for the company’s customers were generally higher this winter compared with the winter of 2015-2016, the senator’s staff determined.
“For a customer with the same usage, this increase was 18 percent to 20 percent for December and roughly 10 percent for January,” the staff report stated.
The state PUC said Thursday that its staff will present responses to the questions and complaints that customers have raised about the rising bills, along with recommendations for how to combat the intensified costs.
“There are many solid recommendations in Senator Hill’s report. We will review the report closely to determine the best way to implement appropriate measures, such as adjusting the winter baseline,” the PUC said in a prepared release on Thursday. “PUC staff has been reviewing factors surrounding the recent increase in gas bills and some of their recommendations mirror Sen. Hill’s report on how to reduce the likelihood of large spikes in the future and how to better educate utility customers on how they can manage their bills.”
One of the key factors that have pushed gas bills through the roof for some customers is the tier structure used to determine how much consumers must pay PG&E. Customers who consume a certain amount of gas below a pre-set limit are charged at the relatively cheap Tier 1 rate. People whose gas usage tops the limit move into Tier 2. People whose usage is billed at Tier 2 typically can expect to pay 40 percent more than the Tier 1 rate for the portion of their monthly gas consumption that exceeds the lower limit.
San Francisco-based PG&E said it’s reviewing the study.
“All of our current rate structures, including baseline allotments, have been subject to review and approval by the PUC,” PG&E spokesman Donald Cutler said. “But of course, we understand that any changes to a customer’s rate that result in a higher-than-expected bill are frustrating.”
One possible solution recommended by the Hill report: Reduce the bills for December and January, which usually are the coldest months, by raising the usage limits to keep more customers in the Tier 1 category for a longer part of the month. Those two months typically are the periods of highest gas usage in Northern California.
“We think the report makes a lot of sense,” said Mark Toney, executive director of The Utility Reform Network, a consumer group. “Changing the baseline will ease the rate shock.
TURN also supports the Hill suggestion to text or email customers when their gas usage tops what they consumed during the same month the year before.
“Perhaps the largest factor contributing to bill shock is that thermostats and other temperature control devices operate without customer intervention,” the report stated. “Customers often don’t know that they’ll get a high bill until it is too late.”