Pacific Gas & Electric Co. will raise rates by an average of 8% for residential customers to fund improvements to reduce wildfire risk.
The California Public Utilities Commission approved the rate hike, which is set to begin in March, on Thursday. Households are expected to pay an average of $13.44 more per month, or $161.28 per year.
The rate increase, effective through the end of 2022, comes at a time when many are facing unemployment or bleaker job prospects during the pandemic-caused recession. PG&E customers already pay a higher rate for power than the rest of the state and country, according to federal data.
The rate hike is part of a broader settlement between PG&E and consumer, labor and safety groups meant to balance reliable service and wildfire safety investments. The average monthly bill increase includes $10.40 for electricity and $3.05 for natural gas.
The Utility Reform Network, a consumer advocacy group that was part of the settlement, had hoped for a delay because of the widespread financial pain from the pandemic.
“Hitting consumers with higher bills right now will only add to their problems,” said Mark Toney, the group’s executive director.
PG&E will receive $1.15 billion from the settlement to strengthen its electrical system, manage vegetation that could spark wildfires and increase inspections and repairs. The improvements should help the company to have shorter and more targeted power shut-offs — the type that are planned in order to avert wildfires, PG&E said.
“We want to work to exceed our customers’ expectations when it comes to safely and reliably delivering clean energy, reducing wildfire risk in an ever-changing climate, and building a safe and sustainable energy system,” Robert Kenney, PG&E vice president of regulatory and external affairs, said in a statement.
The utility had originally requested a 12.4% increase, or average monthly bill increase of $20.55 for residential customers.
As of 2019, PG&E residential and commercial customers paid 21.63 cents per kilowatt hour, higher than the state average of 16.89 cents per kilowatt hour and more than twice the national average of 10.54 cents per kilowatt hour, according to federal data. However, the moderate climate of coastal California can help keep total bills down, because people need less energy to heat and cool their homes.
PG&E equipment caused the 2018 Camp Fire, California’s most destructive and deadly wildfire, as well as some of the Wine Country fires of 2017. The enormous liability costs led to PGE’s 2019 bankruptcy filing. The company emerged from bankruptcy protection this year.
Following the devastating fire season of 2020, state officials are investigating whether PG&E equipment sparked September’s 56,338-acre Zogg Fire in Shasta and Tehama counties. The cause of the fire, which killed four people and destroyed 204 buildings, hasn’t been determined.
The rate increase revenue can’t be used to pay bankruptcy settlements or for executive compensation.