PG&E wants changes to system of dividing costs among customers

Residential customers of Pacific Gas and Electric Co. would pay a smaller share of the utility’s costs than they do now while small businesses and farmers would pay substantially more under a proposal set to be aired publicly next week.

The San Francisco-based company says it supports making adjustments to its cost-distribution system because a recent study found the utility’s system for balancing rates has become lopsided.

The proceeding will not affect how much money the utility receives from ratepayers; that’s the topic of a separate process now entering final stages. Instead, the so-called “phase two” proceeding offers to rebalance how PG&E’s costs are borne by various categories of ratepayers.

Consumer advocates associated with the California Public Utilities Commission say this question of how to divide up the utility’s revenue requirements is among the most contentious parts of the highly complex rate-making process that the state’s investor-owned utilities go through every three years.

The CPUC’s independent Public Advocates Offices has recommended a slightly larger discount for residential customers than proposed by PG&E and a much smaller increase in rates paid by small businesses and agricultural ratepayers, leaving large commercial and industrial customers to make up much of the difference.

As of last summer, PG&E’s residential electric ratepayers paid an average of about 22 cents per kilowatt-hour for electricity, according to figures shared by the utility. Small businesses paid about 14 percent more than that, on average, while agricultural customers paid a little less than residential customers.

Medium-size businesses getting their electricity from PG&E paid about 2 percent more per kilowatt-hour than residential customers last summer, while large commercial customers paid almost 10 percent less and industrial users’ rates were about 27 percent lower than residential rates, PG&E informational materials show.

PG&E says its goal in the phase-two proceeding is to make sure its rates and bills “accurately reflect the cost to safely deliver reliable energy without shifting costs among customer groups.”

“As always, our commitment is to keep costs as low as possible, while meeting our responsibilities to safely serve our customers, even as our changing climate presents significant new challenges and risks,” company spokeswoman Kristi Jourdan said by email Monday. “The commission will conduct an open and transparent review of PG&E’s proposal, and we encourage customers to share their feedback.”

A program manager in the CPUC’s Public Advocates Office, Mike Campbell, said it’s unlikely residential power bills will actually decline despite PG&E’s proposal to reduce rates paid by such customers. That’s because there are additional costs to cover, such as energy efficiency programs and wildfire expenses, he said.

A spokeswoman for another organization advocating for consumers, The Utility Reform Network, said Monday it is still analyzing PG&E’s proposal but that it looks like residential customers should get a larger rate reduction than the utility recently recommended.

Members of the public hoping to provide testimony regarding PG&E’s phase-two rate-adjustment proceedings may participate by dialing into one of two public forums scheduled for Nov. 6.

For the first one, set to extend from 2 to 4 p.m., the dial-in number is 800-857-1917 and the passcode is 1673482.

For the second, scheduled to start at 6 p.m. and conclude two hours later, the phone number is the same and the passcode is 5020731.