Millions of California households served by Pacific Gas and Electric Co. will pay about $384 more in 2024 for utilities to help the company prevent wildfires and meet rising demands for electricity. That amounts to about $32.50 more per month for average residential customers, according to PG&E.
The California Public Utilities Commission approved the increase Thursday, ending a years-long debate over how much more PG&E customers must pay to help the embattled utility — which caused a catastrophic explosion in 2010 and major wildfires in 2017, 2018, 2019 and 2021 — modernize its infrastructure, primarily to be more safe.
The 2024 increase will be followed by a much smaller rise of $4.50 per month in 2025. Average bills are expected to decrease by $8 per month in 2026, the company said.
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 hardship of families struggling to pay utility bills.
“They (PG&E) keep causing disasters and they keep getting rewarded by state officials,” said a man who identified himself as Jose Lopez, who called into the proceeding 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 speaker identified as Sue Fox, who urged the commissioners to adopt the proposal with “the faster, cheaper” plan for preventing wildfires.
Commissioner John Reynolds, who drafted the plan they voted to approve Thursday, said commissioners “struggled mightily with the additional hardship these increases will create for families.”
“We know this — and yet we know that the grid and the pipelines that serve the same families need upgrades, repairs and reinvention to meet growing demand and to adapt to a changing climate,” Reynolds said.
Reynolds acknowledged the revenue increase was unprecedented.
“It’s a historic investment,” he said.
PG&E said in a statement that more than 85% of the increase will go toward projects “to reduce risk in PG&E’s gas and electric operations.”
“We are committed to being the safe operator that the people of California expect and deserve,” said Patti Poppe, PG&E’s chief executive officer. “ We appreciate the Commission for recognizing the important safety and reliability investments we are making on behalf of our customers, including undergrounding power lines to permanently reduce wildfire risk.”
PG&E bills have risen precipitously over the last decade. Average monthly residential bills for electricity and gas combined 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 establishes PG&E’s budget through 2026 and sets the company’s agenda for key projects like moving power lines underground in communities where the risk for wildfires is high.
PG&E executives lobbied heavily for the increase, blanketing television networks with commercials promoting the company’s request for vastly more in revenue dollars to put more power lines underground. But commissioners balked at the over $15 billion the company initially requested — a year-over-year increase of about 25% in revenue, Reynolds said. The CPUC voted to reduce that amount to $13.5 billion.
That includes significant funding to put about 1,230 miles of power lines underground in communities where the risk for wildfires is high.
“This is the biggest rate case TURN has ever seen,” said Katy Morsony, an assistant managing attorney for The Utility Reform Network, or TURN, an advocacy group for rate payers.
The CPUC was considering two internal proposals that both offered less revenue than PG&E had requested, but differed in how much to allow the company to spend installing power lines underground. Ratepayer advocacy groups like TURN pushed for the commission to promote a far less expensive and faster method by insulating bare wires instead of the laborious process of burying them. The CPUC opted to allow for more buried lines.
“We’re disappointed,” Morosony said. “We need to be choosing only the most affordable and fastest wildfire safety measures to protect customers and their pocketbooks.”
Reynolds acknowledged the commission is allowing PG&E to spend billions of dollars burying power lines, which the company has never done at the scale or pace approved Thursday. He said that PG&E still needs to regain trust lost from “past failures,” including deadly wildfires blamed on company equipment and mismanagement, and demonstrate it can deliver.
“My message to PG&E is your work is not done here,” Reynolds said.
Reach Julie Johnson: julie.johnson@sfchronicle.com; Twitter: @juliejohnson
