PG&E quietly arm twists regulators as state preps vote to raise bills

PG&E has quietly lobbied regulators about plans that may enrich shareholders as customers endure higher rates.

OAKLAND — During a delay ahead of a state panel’s vote to unleash higher monthly PG&E bills, the utility leviathan quietly lobbied regulators about plans that may enrich shareholders as customers endure higher rates.

The state Public Utilities Commission is scheduled to make a final decision on Nov. 16 regarding PG&E’s general rate case by reviewing multiple scenarios for changes in customer monthly bills.

The grim reality: The two main alternative proposals that the PUC is considering — as well as potential tweaks to these primary scenarios — all lead to big increases in monthly bills for PG&E customers.

One option that the PUC is considering would increase bills for the average residential customer who receives combined electric and gas services from PG&E by $31.13 a month. Electric bills would jump by $22.37 a month while natural gas bills would increase by $8.76 a month.

An alternate proposal that is being floated would increase average residential monthly bills by $25.25 a month. Electric bills would jump by $18.59 a month while natural gas bills would increase by $6.66 a month.

The first option would cause monthly bills to soar by 12.5%. The alternative option would cause bills to hop higher by 9.9%.

While the debate raged about the bill scenarios, PG&E met on Nov. 7 with PUC staffers to lobby the regulators regarding a modification that would oblige PG&E customers to cough up more money to bolster the utility’s credit rating.

“PG&E executives scheduled a private meeting met with Commission staff to lobby for an additional $1.8 billion in ratepayer increases,” said Mark Toney, executive director with The Utility Reform Network, or TURN, a consumer group.

Oakland-based PG&E responded that it’s allowed to lobby the state PUC on an array of issues including rate cases, and that other groups had also lobbied the state agency in connection with the general rate proceeding.

“We continue to advocate for sufficient funding to meet the safety and reliability needs of our customers,” PG&E spokesperson Mike Gazda said.

This general rate proceeding, along with the higher bills, also is poised to determine the strategies that PG&E should take to harden its electricity system as a way to reduce the odds of catastrophic wildfires in California.

PG&E’s approach to combat wildfires is slated to include a combination of covering and insulating overhead power lines as well as the burial of many miles of power lines. These approaches are all designed to reduce the likelihood that PG&E equipment will come into contact with nearby trees and other vegetation and spark a wildfire.

Burial of power lines is typically deemed to be far more costly and more time-consuming than insulation and covering of overhead lines, according to TURN.

The decisions are likely to authorize a combination of these two approaches.

One thing is certain: PG&E customers are already paying monthly bills that have soared far faster than the current inflation rate in this region.

In October, the Public Advocates Office at the state PUC released a report detailing the rise in electricity bills for the three major investor-owned utilities in California, including PG&E.

Over a roughly three-year period, PG&E bills for the average residential customer have hopped 38% higher, or an average of 12.7% a year, the PUC public advocates reported.

Yet over that same approximately three-year stretch, the Bay Area inflation rate, as measured by the consumer price index, rose 11.7%, according to this news organization’s review of reports from the U.S. Bureau of Labor Statistics. That works out to an average yearly increase of 3.9% in the Bay Area inflation rate.

Put another way, PG&E electricity bills are rising three times as fast as the overall inflation rate in the Bay Area.

These trends are alarming enough that consumer groups, politicians, labor unions and advocacy organizations have teamed up to try to combat the huge increases in PG&E monthly bills and demand more accountability from the utility titan.

FAIR California, as the coalition is called, banded together in October ahead of the PUC’s decision that would bestow on PG&E the power to shove monthly utility bills higher — once again — starting in January.

“We have to create a sufficiently substantial counterweight to the massive political power of PG&E, its investors and its political allies,” Sam Liccardo, San Jose’s former mayor, and one of the principal leaders of FAIR California, said in an October interview with this news organization.

Toney insisted in an interview on Monday that the PUC shouldn’t allow PG&E to force customers to endure higher bills as a way to bolster its credit rating on Wall Street.

“PG&E has to focus on basics, to reduce its wildfire risks as quickly as possible by hardening the lines,” Toney said. “Credit ratings are all about managing risk. PG&E needs to harden the wires rather than use its customers to put more money in the pocket of Wall Street investors and the company’s shareholders.”