Pacific Gas and Electric on Dec. 19 received its fifth and sixth approvals for rate increases for customers in 2024.
The California Public Utilities Commission’s decision to green-light the rate hikes — slated to hit customers’ bills next year — marked a record-breaking number of increases in what has been a record-breaking year for PG&E.
According to regulators, average PG&E bills swelled 56% over the last three years.
PG&E had profits in 2023 of $2.24 billion, a 24% increase from the previous year, and is on track to earn more in 2024. The company’s share price is up more than 12% from the beginning of the year, and its last reported quarterly profit, $791 million, exceeded Wall Street analyst expectations. All told, PG&E saw profits of more than $2 billion in the first three quarters.
In fact, the company’s performance has been so strong that CEO Patti Poppe in January reinstated quarterly dividend payments. The company had decided to stop paying dividends to shareholders for six years due to its role in California’s 2017 wildfires.
PG&E this month announced a rise in its dividend and extended Poppe’s contract through 2031.
A spokesman said average residential electric bills were 4.5% lower in December than in January 2024 because of a rate reduction announced in the summer.
“Rates fluctuate both up and down based on the timing of regulatory approvals for cost recovery,” the spokesman said in a statement.
However, the approval of the new rate increase will essentially wipe out that discount when it goes into effect in January and March.
The reasons cited for the rate hikes range from tree trimming around power lines to a new customer data and billing system to extending operations at San Luis Obispo’s nuclear generation facility.
The Utility Reform Network, a nonprofit that advocates for imposing regulatory guardrails, is trying to pass state legislation that would stop utilities from being able to pass along to customers the costs of lobbying or advertising. A previous version of the bill died this year in committee.
A report by the Sacramento Bee found that $6 million in PG&E advertising, including a slickly produced commercial touting an effort to bury power lines, were paid for by a customer-funded fire risk mitigation account.
Mark Toney, executive director of the Utility Reform Network, said PG&E has more rate increase proposals scheduled to go in front of regulators in the coming months.
“When you open your bill, you get the initial rate shock, but you also get hit with the impact of higher energy prices at the grocery store,” Toney said. “High energy prices filter down to nearly everything you buy.”
He said the reduction in wildfires caused by PG&E is evidence that the utility is taking steps to improve safety, but he takes issue with the lack of oversight of its spending. For instance, he pointed out that PG&E has prioritized burying power lines, an expensive and labor-intensive method, over insulating them, which is roughly five times cheaper.
“2024 has been pretty harsh on PG&E ratepayers,” Toney said. “We’re campaigning for affordable power, the ability to cap and limit rate increases, and new guidelines for spending and overspending.”
William Abrams, whose Santa Rosa home was destroyed in 2017’s Tubbs fire, has become an advocate for more transparency and oversight of PG&E’s rate decisions.
Asked if he believes the utility’s stated goal of keeping rates stable for the next few years, Abrams said, “If past is prologue, that won’t occur.”
“When all of this retooling of the system was talked about in the wake of the Camp and Tubbs fires, we were told it was ratepayer neutral,” Abrams said. “If there are more fires and it’s demonstrated they need to do more of different things to limit them, you can be sure they’re going to be looking at ratepayers to take on the cost.”