PG&E is proposing 8% rate hikes – but it's not what you think. Why bills are likely to 'remain flat'
PG&E CEO defends rate hike request
PG&E says, though it is requesting its smallest percentage increase in a decade from 2027 to 2030, customer bills will remain flat and even go down a bit next year.
SAN FRANCISCO - PG&E, exceedingly aware of the anger customers have over ever-rising rates, says it has reached what will be a somewhat controversial turning point with its latest rate request in front of the California Public Utilities Commission.
In reality, PG&E is proposing an 8% rate increase, but that would be offset by some cost savings subtracted from customers' bills.
PG&E says, though it is requesting its smallest percentage increase in a decade from 2027 to 2030, customer bills will remain flat and even go down a bit next year.
In 2027, they will rise again, but not exceed the level of 2025.
"It will enable bills to remain flat from today," said PG&E Chief Executive Officer Patti Poppe.
Cutting costs
CEO Poppe says PG&E can do this because it is saving money using new technologies, processes, and procedures to cut its costs by $2.5 billion dollars.
"I want our customers to know that [there are] some important costs coming out of the bill," Poppe said.
In an interview with KTVU, she compared the costs being eliminated to when a child graduates from college – when your education is done, that cost burden goes away.
In PG&E's case, the utility is no longer recovering from extreme weather events, so those costs they were collecting then are no longer needed.
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PG&E has not said whether the cost of the improvements would be reflected in customer bills.
"We don't have those costs anymore. It's going to come out of customers’ bills," Poppe said.
The costs to recover from weather events that we're billed to customers are no longer being collected.
As demand increases, PG&E's costs would be shared by more customers, meaning lower prices
The other side:
As the California Energy Commission forecasts, if demand for electricity does increase, bills could go down because the fixed costs of operating the system would be shared by more customers.
The Utility Reform Network, or TURN, a consumer advocate, sees the price hike quite differently.
"It may look like [prices are] actually going down slightly…because they're only going down slightly. But you have to remember, last year they had a 6% rate increase, right. So, currently the bids are artificially inflated with 6% rate increases," a TURN representative told KTVU. "But that's only half the story. So, they're asking for 17 pending rate increases from here on out.
TURN argues that even if the California Public Utilities Commission approves only half of those increases, there are still real increases above and beyond this one major rate request.
PG&E argues it's making real turnaround progress.
"We can stabilize bills. We can, in fact, lower bills with some things that are coming up in the future," said CEO Poppe.
Historically, the CPUC has not approved the entirety of what PG&E wants, which could affect bills.
Also, a low-rate federal loan guarantee will lower PG&E's borrowing costs by as much as $1 billion, which will be passed along to customers.
PG&E carries on with undergrounding powerlines
As PG&E bills continue to climb, it's fair to ask if burying powerlines will eventually slash wildfire risks, but where are we in this expensive process?