LITTLE RIVER 12/14/2020 — If you’re a PG&E customer, you should start preparing yourself for an increase in your electricity bill. On March 1st, an 8% rate hike will go into effect
The boost was approved by the California Public Utilities Commission, a state agency which regulates California’s utilities, on December 3, after a years long battle between the utility company and multiple consumer advocacy groups. According to reporting done by the Associated Press, the rate hike will bring up residential customers monthly bills by an average of $13.44 per month, which comes out to an average of $161.28 per year.
California Public Utilities is allowing the increase under a negotiated agreement that allows PG&E to implement $1.15 billion in rate hikes from March 2021 until December 31, 2022. The hikes will provide the utility company with additional revenue they say they need to update outdated equipment and provide safe and reliable electricity. PG&E cannot use any of the $1.15 billion for executive salaries or to dig itself out of bankruptcy.
Originally, PG&E was pushing for $2 billion in rate hikes, but groups such as The Utility Reform Network (TURN), a San Francisco based consumer advocacy group, fought against PG&E, taking the view that customers should not have to pay for upgrades that, as one company representative said, PG&E neglected for years. Although ultimately the reform network agreed to the $1.15 billion settlement and rate hikes that go along with it, Mindy Spatt, the nonprofit’s communications director, believes that in light of the pandemic and subsequent economic hardship, PG&E should not implement the rate increases on March 1.
“Our big concern right now is the customers who are under so much economic pressure and hardship because of unemployment, because of rent coming due, because of small businesses being basically destroyed,” said Spatt during a phone call. “There are just so many pressures on customers that it’s obviously the wrong time for a rate hike.”
Spatt thinks that the rate increases should be frozen until some of the economic downfall from the pandemic has passed.
PG&E disagrees — communications representative Paul Doherty described PG&E’s rate hikes as an integral part of the utility company’s plan to reduce wildfire risk and deliver reliable service to the 16 million customers who use its grid. When asked specifically about The Utility Reform Network’s request for PG&E to freeze the rate hikes, Doherty said, “They participated in the negotiations and ultimately agreed to the multi-party settlement and so I’ll refer you to them for more information.”
Spatt reasoned that the California Public Utilities Commission has in the past been flexible with PG&E given economic hardship, and she thinks they should do the same now for PG&E customers.
“We want these increases suspended during COVID and to be perhaps revisited after that,” she said. “Just to be clear we’ve come to this position, despite our participation in the settlement, because we’ve seen the commission do the same thing in PG&E’s favor at other times.” Spatt referenced the situation early this summer, when the California Public Utilities Commission waved PG&E’s $200 million fine despite the fact that their equipment caused 15 wildfires resulting in more than 100 fatalities and the destruction of 25,000 structures. “We’re just asking the PUC [Public Utilities Commission] to show customers the same type of consideration they’re so willing to show PG&E,” said Spatt.
PG&E representative Doherty said that the company understands that rate increases could be a serious hit to customers, but that they are urgent because PG&E needs the funds to fix their strained infrastructure. “This decision enables the necessary investment in PG&E’s electric and gas distribution systems and power generation infrastructure and that includes investments to reduce the risk of catastrophic wildfires through electric system hardening, enhanced vegetation management, system automation and asset inspection and repair.” Doherty also mentioned that the utility company has programs that offer discounted rates to their customers through the Relief for Energy Assistance through Community Health program, the Family Electric Rate Assistance Program, and the California Alternate Rates for Energy program.
Ultimately, this battle between PG&E and consumer advocacy groups like The Utilities Reform Network (TURN) is over who is going to pay for the costs of climate change and years of deferred maintenance. Across the planet our quickly changing climate presents innumerable challenges. For PG&E, it means many of the areas it serves in Northern California are now considered high fire risk zones, and as droughts are forecasted to become longer and more severe, Northern California is likely to become more flammable. At the same time, PG&E’s equipment that has in the past ignited deadly fires needs to be updated and hardened so that doesn’t happen again and somebody has to pay for that, but no one wants to foot the bill.