Rate increases took effect Monday for residential customers of Pacific Gas and Electric Co. that the company said were mostly a response to heightened wildfire risks but which consumer advocates called part of a troubling pattern of rising costs.
The investor-owned utility said Friday higher prices approved in December by the California Public Utilities Commission will raise the bill of PG&E’s average electric and gas customer by 4.6 percent, or $8.73 per month. A jump in electricity rates accounted for most of the increase.
PG&E’s vice president of regulatory and external affairs posted a message online saying the San Francisco-based utility recognizes the increases “may be a hardship for many” and highlighting tools and other assistance the company offers to help people keep their bills low.
Vice President Robert Kenney explained the process that led to the rate increases and promised they won’t be used to pay legal claims from wildfires in 2015, 2017 or 2018, and neither will they fund executive pay. “Shareholders are responsible for those costs,” he wrote.
“This increase is focused on work to keep our customers and communities safe,” Kenney stated. “That’s just as important to us as it is to you, because our 25,000 PG&E employees live and work in these same communities, too. We’re your neighbors and your friends.”
While the company tries to keep its rates as low as possible, Kenney said, PG&E needs the money to make appropriate investments in safe and reliable service. Examples he pointed to were enhanced vegetation management and new tools for monitoring localized wildfire risks.
The rate increases resulted from a transparent public review PG&E goes through every three years, he wrote. The CPUC works with the utility and others to determine what sort of system improvements the company should be allowed to fund. Charging interest on such investments is how the company makes most of its money.
PG&E expects to reduce its expenditures every year through 2025 by renegotiating old power-purchasing agreements and selling excess renewable energy “when it makes sense for the grid,” Kenney wrote. The company is also trying to cushion the new rates by selling surplus properties and license agreements with wireless service providers.
Consumer advocates who had argued for a sharper limit on PG&E’s spending said Monday they were concerned about the utility’s continuing rate increases.
Elizabeth Echols, director of the CPUC’s Public Advocates Office, noted in an emailed statement families and individuals are already struggling because of the pandemic.
“The CPUC should prioritize its decisions to ease the financial burden on customers,” she wrote, “and the Public Advocates Office will continue our advocacy efforts to identify areas where we can keep costs down while meeting our state’s climate goals.”
Mindy Spatt, spokeswoman for San Francisco-based consumer advocacy group The Utility Reform Network, said by email PG&E’s customers are paying more but still can’t rely on the company’s service or trust its safety record.
She highlighted accusations the utility has been dangerously negligent with regard to managing wildfire risks.
“So naturally customers are angry about these latest and obviously ill-timed rate hikes,” Spatt wrote.
PG&E has about 16 million customers in Northern and Central California.