OAKLAND — During a delay ahead of a state panel’s vote this week that will unleash higher monthly PG&E bills, the utility leviathan quietly lobbied regulators about plans that may enrich shareholders as customers endure higher rates.
The state Public Utilities Commission (PUC) is scheduled to make a final decision on Nov. 16 regarding PG&E’s ability to make changes in customers’ bills.
The grim reality: The two main proposals that the PUC is considering lead to big increases in monthly bills.
While debate raged about the possible scenarios, PG&E met in recent days with PUC staffers to lobby the regulators regarding a modification that would oblige PG&E customers to cough up more money to bolster the utility’s credit rating.
“PG&E executives scheduled a private meeting with the commission staff to lobby for an additional $1.8 billion in ratepayer increases,” The Utility Reform Network (TURN), a consumer advocacy group, said in a prepared release. Some of that money might go toward mitigating wildfire risk and some might go toward bolstering the utility’s credit rating.
Oakland-based PG&E responded that it’s allowed to lobby the PUC on an array of issues and that it issued a public filing to disclose the “ex-parte” discussion with PUC staff.
“This is all part of a public process as part of the general rate case,” PG&E spokesperson Mike Gazda said. “There is nothing secret about this.”
One option the PUC is considering would increase bills for the average residential customer who receives combined electric and gas services from PG&E by $31.13 a month. Electric bills would jump by $22.37 a month while natural gas bills would increase by $8.76 a month.
An alternate proposal would increase average residential monthly bills by $25.25 a month. Electric bills would jump by $18.59 a month while natural gas bills would increase by $6.66 a month.
The first option would cause monthly bills to soar by 12.5%. The alternative option would cause bills to hop higher by 9.9%.
PG&E noted that other parties to the proceeding also filed papers with the PUC ahead of their meetings to provide their respective views on the matter.
These other parties include TURN and community choice aggregators, which were formed by local government jurisdictions such as San Jose and other cities to purchase, generate and distribute electricity to customers.
“We continue to advocate for sufficient funding to meet the safety and reliability needs of our customers,” Gazda said.
This general rate proceeding, as the process is formally known, also is poised to determine the strategies that PG&E should take to harden its electricity system to reduce the odds of catastrophic wildfires in California. The utility’s equipment has been blamed for several wildfires in recent years, including the deadly Camp Fire in 2018.
PG&E’s approach to combat wildfires is slated to include a combination of covering and insulating overhead power lines as well as the burial of many miles of power lines. The approaches are designed to reduce the likelihood that PG&E equipment will come into contact with nearby trees and other vegetation and spark a wildfire.
Burying power lines is typically considered far more costly and time-consuming than insulating and covering overhead lines, according to TURN.
The decision looms as PG&E customers are already paying monthly bills that have soared far faster than the current inflation rate in this region.
In October, the Public Advocates Office at the state PUC released a report detailing the rise in electricity bills for the three major investor-owned utilities in California, including PG&E.
Over a roughly three-year period, PG&E bills for the average residential customer have hopped 38% higher, or an average of 12.7% a year, the PUC public advocates reported.
Yet over that same approximately three-year stretch, the Bay Area inflation rate, as measured by the consumer price index, rose 11.7%, according to this news organization’s review of reports from the U.S. Bureau of Labor Statistics. That works out to an average yearly increase of 3.9% in the Bay Area inflation rate.
Put another way, PG&E electricity bills are rising three times as fast as the overall inflation rate in the Bay Area.
These trends have alarmed consumer groups, politicians, labor unions and advocacy organizations, which have teamed up to try to combat the huge increases in PG&E monthly bills and demand more accountability from the utility titan.
FAIR California, as the coalition is called, banded together in October ahead of the PUC’s decision.
“We have to create a sufficiently substantial counterweight to the massive political power of PG&E, its investors and its political allies,” Sam Liccardo, San Jose’s former mayor and one of the principal leaders of FAIR California, said in an interview last month with this news organization.
Mark Toney, executive director of TURN, said in an interview Monday that the PUC shouldn’t allow PG&E to force customers to endure higher bills as a way to bolster its credit rating on Wall Street.
“PG&E has to focus on basics, to reduce its wildfire risks as quickly as possible by hardening the lines,” Toney said. “Credit ratings are all about managing risk. PG&E needs to harden the wires rather than use its customers to put more money in the pocket of Wall Street investors and the company’s shareholders.”
