Editorial: Don’t let PG&E further gouge its 16 million customers

PUC must prioritize protecting Northern Californians over utility profits

When it comes to profiting at the expense of its customers, PG&E has few competitors.

Since 2018, the average monthly bill for a typical residential customer receiving gas and electric services has risen by 42%, from $169.73 to $240.73. In comparison, the Bay Area’s overall inflation rate over the last five years has been 13.5%, or 2.7% per year.

As if that weren’t bad enough, the two-time convicted felon now wants to be able to collect even more money from its customers.

PG&E had the audacity to ask the California Public Utilities Commission for permission to increase its revenue by $3.2 billion, or 26%, in 2023.

The PUC, which has a long history of cozying up to PG&E, must not allow PG&E to further gouge its 16 million customers, especially given that they already pay some of the nation’s highest utility rates.

Instead, the PUC should consider the two alternatives it issued last week, one crafted by PUC Commissioner John Reynolds and the other offered by a PUC administrative law judge.

Reynolds’ proposal would allow PG&E to collect $1.1 billion more in revenue, or 9% more than it did in 2022. According to The Utility Reform Network (TURN), a consumer group that monitors PG&E, this would amount to a $24 monthly increase in PG&E customers’ bills.

The utility would earn $1.6 billion in 2023 under the other alternative plan, which TURN officials said would increase customers’ bills by $28 per month.

PG&E claims that the funds are required to improve the safety, efficiency, and dependability of its gas and electric systems. The utility also stated that the majority of the funds would be used to bury power lines underground in areas prone to wildfires. But the utility fails to mention that its profits are determined not by how much energy it sells, but by how much it invests in infrastructure. When PG&E trims trees and maintains power lines, it does not make money. But it does, for example, when new powerlines are buried underground. State regulators guarantee a 10% profit margin for those investments, which means that for every dollar spent on infrastructure, PG&E can charge its customers an additional 10 cents in profits for shareholders.

According to TURN executive director Mark Toney, it would be far less expensive for PG&E to insulate its power lines rather than bury them underground in order to protect against catastrophic wildfires. At a cost of $2.1 billion, the two proposals would have PG&E insulate 1,800 miles of power lines and bury 200 miles of power lines. At a cost of $5.9 billion, PG&E proposes insulating 320 miles and burying 2,000 miles of power lines.

The PUC is expected to make a final decision on PG&E’s rate increases in November.

It is the PUC’s responsibility to ensure that PG&E maintains its priorities. The PUC must not put PG&E profits ahead of the best interests of California customers.