PG&E on Thursday posted a big jump in profits during its first quarter, a January-through-March period that featured two hefty increases in the company’s monthly electric and gas bills.
The utility, whose headquarters are now in downtown Oakland, harvested $475 million in profits on $5.8 billion in revenue for the quarter ended in March.
PG&E’s first-quarter profits were nearly triple the $120 million the utility earned in the same quarter a year ago. Revenue increased 22.9% from the year before.
Excluding certain items that aren’t directly related to what PG&E calls its “core earnings”, the company captured a first-quarter profit of $639 million, which was an increase of 31% from the year-ago first quarter.
“We had a number of non-cash write-offs in the first quarter of 2021 that distorted our earnings that quarter,” said Andrew Castagnola, a PG&E spokesperson. “We did not earn more than what the regulatory construct allows for in terms of net income.”
The average monthly bill charge from PG&E for residential electricity and gas service is now 14% higher for the typical customer than it was at the end of 2021.
“Rate changes approved by our regulator, the state Public Utilities Commission, this year have been largely driven by an increase in the cost of purchasing electricity on behalf of our customers,” Castagnola said. “PG&E passes through the cost of energy purchases directly to our customers and does not mark up that cost.”
The utility has come under intense scrutiny over the last decade for its role in a series of deadly wildfires in Northern California and a lethal gas explosion in San Bruno that PG&E caused.
During the past decade, PG&E was found to have caused a string of catastrophic wildfires, including a deadly blaze in Amador County and Calaveras County in 2015, fatal infernos in the North Bay Wine Country and nearby regions in 2017, and a lethal conflagration in Butte County in 2018 that became California’s deadliest and most destructive wildfire. PG&E’s equipment also touched off the Dixie Fire in 2021, which torched a vast area in parts of Butte, Plumas, Lassen, Shasta, and Tehama counties.
The state PUC in 2021 levied a record-setting $1.94 billion penalty on PG&E for its role in the 2017 and 2018 infernos. That was the largest financial punishment ever imposed on an American public utility. It eclipsed the $1.6 billion financial penalty the PUC imposed on PG&E in 2015 for causing the San Bruno blast, at the time also a record-setting punishment.
“I think people have a hard time imagining Wall Street popping champagne corks while thousands of families who lost their homes during the 2017 and 2018 wildfires are still waiting to get paid,” said Mark Toney, executive director of The Utility Reform Network, or TURN.
PG&E has increased what it charges per month twice so far in 2022, with the first jump in January and the second in March. The state PUC authorized the rate proceedings that underpinned both increases in monthly bills.
The company’s regulatory filings show that it is seeking additional increases in rates and monthly bills. The state PUC could begin making decisions on one or more of the requests sometime during 2022.
Those proceedings could lead to a fresh round of increases in monthly PG&E bills and rates by as soon as January 2023.
Another big factor that helped to drive the company’s rising profits: PG&E booked a $1 million benefit from wildfire claims in the recent first quarter compared with a $172 million expense from claims in the year-ago quarter.
The company generated $4.16 billion in revenue from electricity operations in the first quarter of 2022, up 22.5% from the same quarter in 2021.
Gas operations produced $1.64 billion in revenue, up 24.1% from the year-before quarter, PG&E reported.
PG&E’s shares jumped 3.5% to close at $12.93 on Thursday.
Thursday’s closing price represented a 52-week high for the utility, according to information obtained from the respective websites of Yahoo Finance and the Wall Street Journal.
“High profits should not be made on the backs of customers forced to pay skyrocketing bills,” Toney said.