SACRAMENTO — Power bills for about 16 million PG&E customers will likely increase after state regulators released two rate proposals for one of the nation’s largest utilities Wednesday.
The California Public Utilities Commission is finishing up its once-every-four-years review of the utility that provides electric and gas service to a 70,000-square-mile area in the central and northern parts of the state. The commission must approve how much PG&E can charge customers and how it will spend that money.
The commission on Wednesday could not say what the increase would be for the average residential customer. But it is likely to be far less than what PG&E had initially requested — the company had asked for rate increases large enough to boost its revenue by 26%, but the two proposals the commission released would increase revenue by a maximum of 13%.
PG&E had asked for more revenue in part to pay for a plan to bury about 2,100 miles of power lines to help prevent wildfires. Burying powerlines is expensive and takes a long time to complete. But PG&E has argued it is the best way to essentially eliminate the risk of strong winds knocking down power lines and starting wildfires, like the 2018 Camp Fire that killed 85 people and destroyed thousands of homes.
Insulate Power Lines or Bury Them?
The Utility Reform Network, which advocates on behalf of ratepayers, has argued that a faster and cheaper way to reduce wildfire risk is to insulate power lines instead of burying them.
It appears the commission agrees. Both of its proposals would approve rate increases sufficient to bury less than 1,000 miles of lines.
Still, “both proposed decisions adopt substantial and painful increases to monthly bills, far beyond the cost of inflation, which (we believe) should be a cap for bill increases,” said Mark Toney, executive director of The Utility Reform Network.
One proposal, written by administration law judges, would increase PG&E’s revenue by 13%. The other one, from John Reynolds, the PUC commissioner assigned to the case, would increase the company’s revenue by 9%. The commission is scheduled to consider them during its Nov. 2 meeting.
PG&E spokesperson Lynsey Paulo said the company is reviewing the proposals and its own proposal “continues the transformation of our energy system to further reduce wildfire risk, improve safety and climate resilience and support continued growth of clean energy.”
The issue of PG&E’s rates has been pending for more than two years.
A decision was delayed last year after the company made two changes to its initial application, first to request the bury the power lines and later to increase its rate request because of inflation and taxes.