Millions of California households served by Pacific Gas and Electric Co. will pay about $384 more in 2024 to utilities to help the company prevent wildfires and meet growing electricity demand. That amounts to about an additional $32.50 per month for typical residential customers, according to PG&E.
The California Public Utilities Commission approved the increase on Thursday, ending a years-long debate over how much more PG&E customers should pay to help the beleaguered utility — which caused a catastrophic explosion in 2010 and major wildfires in 2017, 2018, 2019 and 2021 — It is updating its infrastructure, primarily to be more secure.
The company said the increase in 2024 will be followed by a much smaller increase of $4.50 per month in 2025. Average bills are expected to decrease by $8 per month in 2026.
The CPUC’s five commissioners voted unanimously to approve the plan, over the objections of PG&E customers who urged them to consider the financial hardships faced by families struggling to pay utility bills.
“They (PG&E) continue to cause disasters and get constant payouts from state officials,” said a man who identified himself as Jose Lopez, who called into action from his home in the Central Valley. “Inflation is high and people are struggling to pay their bills.”
“We can’t afford it anymore,” said a spokesman identified as Sue Fox, urging commissioners to embrace the proposal with the “fastest, cheapest” plan to prevent wildfires.
Commissioner John Reynolds, who drafted the plan they voted to approve Thursday, said commissioners “have struggled greatly with the additional hardship these increases will create for families.”
“We know that — but we know that the network and pipelines serving the same families need upgrades, repairs and reinvention to meet growing demand and adapt to a changing climate,” Reynolds said.
Reynolds acknowledged that the increase in revenue was unprecedented.
“It is a historic investment,” he said.
More than 85% of the increase will go toward projects to “reduce risks in PG&E’s gas and electric operations,” PG&E said in a statement.
“We are committed to being the safe operator that Californians expect and deserve,” said Patty Pope, CEO of PG&E. “We appreciate the committee for recognizing the important safety and reliability investments we make on behalf of our customers, including extending underground power lines to permanently reduce wildfire risks.”
PG&E’s bills have risen dramatically over the past decade. Average monthly residential bills for combined electricity and gas jumped by $86.51 — from $154.52 in January 2016 to $241.03 in January 2023, according to data from PG&E obtained by the Chronicle.
The plan outlines PG&E’s budget through 2026 and sets the company’s agenda for key projects such as moving power lines underground in communities where wildfire risk is high.
PG&E executives have lobbied hard for the increase, blanketing television networks with commercials touting the company’s request for more revenue dollars to put more power lines underground. But commissioners rejected more than the $15 billion the company initially requested, a roughly 25% annual increase in revenue, Reynolds said. The CPUC voted to reduce that amount to $13.5 billion.
This includes significant funding to place approximately 1,230 miles of underground power lines in communities where wildfire risk is high.
“This is the largest rates case TURN has ever seen,” said Katie Morsoni, assistant managing attorney for the Utility Reform Network, or TURN, a ratepayer advocacy group.
The CPUC was considering two internal proposals that both offered less revenue than PG&E requested, but differed in how much the company would be allowed to spend on installing underground power lines. Taxpayer advocacy groups, such as TURN, pushed the commission to promote a much less expensive and faster method of insulating bare wires rather than the arduous process of burying them. The CPUC chose to allow more buried lines.
“We are disappointed,” Morosoni said. “We need to choose the most cost-effective and quickest wildfire safety measures to protect customers and their wallets.”
Reynolds acknowledged that the commission is allowing PG&E to spend billions of dollars to bury power lines, which the company has never done at the scale or pace approved Thursday. He said PG&E still needs to regain trust lost due to “past failures,” including deadly wildfires blamed on the company’s equipment and poor management, and prove it can deliver results.
“My message to PG&E is your work is not done here,” Reynolds said.
Contact Julie Johnson: julie.johnson@sfchronicle.com; Twitter: @JulieJohnson
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