SAN FRANCISCO — PG&E customers must brace for a double-digit increase in their monthly gas bills after state regulators Thursday approved a program to pay for upgrades to the utility’s aging pipeline system in the wake of the deadly San Bruno explosion.
By 2018, monthly bills for natural gas will be 11.6 percent higher than they were in January 2015, according to estimates provided during Thursday’s meeting of the state Public Utilities Commission.
The rate increases are scheduled to begin Aug. 1.
“The PG&E gas transmission and storage system is a massive and aging system,” PUC Commissioner Carla Peterman said before the PUC’s 4-0 vote to approve the new financing program.
The push for improvements to the system has intensified in the wake of the PG&E-caused explosion in September 2010 that killed eight people and leveled much of a San Bruno neighborhood.
“The tragedy in San Bruno is a constant reminder of the need for safety in this system,” Peterman said.
PG&E customers can expect an increase of roughly $5.90 a month in their gas bills, according to an estimate provided by Peterman, who crafted the rate-increase proposal.
As of January 2015, monthly average residential bills were $50.89, Peterman estimated. By 2018, the average monthly gas bill for residential customers would rise to $56.79. Those estimates are based on the PUC’s rate models, Peterman added.
“This decision, while a substantial increase, will improve safety,” PUC Commissioner Liane Randolph said.
The PUC ruling requires PG&E to undertake numerous programs to increase the safety and reliability of its gas system. PG&E must:
- Conduct hydrostatic testing — high-pressure tests — of 680 miles of pipeline by 2018. The tests can identify hazards such as weak seams or faulty welds in pipes.
- Replace 60 miles of aging pipelines with new pipes that use updated and safer technologies. This is the start of a program that eventually would replace 370 miles of pipes by 2025.
- Begin an upgrade of 4,273 miles of pipelines so they can be inspected by robots that travel through the pipes, a program that would be completed within 12 years.
“We don’t agree with all aspects of the commission’s decision,” said Donald Cutler, a PG&E spokesman. “We want our customers to know that the dedication to our mission of becoming the safest, most reliable gas company in the country is as strong as ever.”
The San Bruno explosion put a spotlight on PG&E’s shoddy maintenance efforts and neglect of its vast web of pipelines in Northern and Central California.
Consumer groups lambasted the decision, saying the PUC enabled PG&E to extract money from customers for upgrades that the utility already should have conducted.
“PG&E let their pipes rust for years,” said Thomas Long, legal director of The Utility Reform Network, a consumer group. “Now PG&E wants customers to pay, again, for maintenance that should have been done all along — but wasn’t.”
PUC officials conceded that the pending rate increases could be a tough burden for consumers to shoulder.
“The residential bill impact poses challenges for California families who rely on gas for cooking, heating and hot water,” Peterman said.
Contact George Avalos at 408-859-5167. Follow him at Twitter.com/georgeavalos.