Fresno residents can weigh in Tuesday on Pacific Gas & Electric Co.’s request for hundreds of millions of dollars in rate increases over the next three years that the company says are needed for improved electric and gas service.
PG&E is holding a pair of public participation hearings at Fresno City Hall. The sessions are at 1 p.m. and 6 p.m. in the City Council chamber on the second floor of City Hall. The hearings are an opportunity for people to sound off to representatives of the utility and the California Public Utilities Commission about the proposed rate increases.
PG&E Corp., the utility’s parent corporation, is authorized to collect $7.9 billion in rates charged to customers for electrical distribution, gas distribution and electrical generation, according to the company’s 2016 first-quarter financial statements. In its proposed 2017-19 general rate application, PG&E is proposing that revenue from those rates be increased by $333 million in 2017. An additional $469 million is being sought in 2018, plus another $368 million in 2019.
$7.9 billionPG&E 2016 authorized revenue from electric, gas rates
$333 millionIncrease sought in 2017
$469 millionAdditional increase sought in 2018
$368 millionAdditional increase sought in 2019
Never miss a local story.
Over the three years, the cumulative revenue increase would amount to $2.3 billion, according to the state Office of Ratepayer Advocates.
Donald Cutler, a PG&E spokesman, said the rate increases are necessary to help the utility keep up with technology upgrades and make improvements to its electricity and natural gas systems and invest in clean-energy technology. “We’ve made this request because customers want us to deliver safe, reliable energy and want us to be a leader in renewable energy,” Cutler said. “This proposal supports those goals while keeping customer bills as low as possible.”
The effect of the proposed 2017 rate increase for the “average” residential customer would be an increase of about 3 percent, or $3 per month, on their PG&E bill, Cutler said. The effect on bills in 2018 and 2019 won’t be known until after the state approves a new structure for residential utility rates, which is being developed in a separate hearing process.
“We understand that any of these increases can be difficult for some of our customers,” Cutler said. “Our rates have gone up and are going up. Since 2000, our rates have been very much in line with inflation. But on average, our customer bills are still 25 percent below the national average.”
To ease the burden that power rates can place on household budgets, including in the San Joaquin Valley where hot summer temperatures force people to use more electricity for air conditioning, Cutler said PG&E has tools and programs to help customers manage energy costs.
Cutler said the rate increase, if approved by the Public Utilities Commission, would help PG&E use smart-grid technology to accommodate growing solar and renewable energy resources; prepare for emergencies such as earthquakes including construction of a backup gas-control center; improve wildfire prevention and management; and provide improved mobile technology for field crews to respond faster to outages and reports of gas leaks.
Not every one agrees that PG&E needs all the money that it’s asking for.
The Office of Ratepayer Advocates is urging the Public Utilities Commission to approve a much lower rate increase over the three-year period – including an $85 million rate decrease in 2017. Coupled with increases of $274 million in 2018 and $283 million in 2019, the cumulative revenue increase over three years would amount to $576 million, compared to the $2.3 billion requested by PG&E.
$85 millionRate decrease for 2017 recommended by Office of Ratepayer Advocates
$274 millionORA recommended increase in 2018
$283 millionORA recommended additional increase in 2019
“ORA supports ratepayer funding for necessary and/or cost-effective capital projects and maintenance programs/activities proposed ... which are intended to improve safety and reliability,” the state advocates said in a report to the Public Utilities Commission, “as long as PG&E provides record evidence which justifies and supports such proposals and requests.”
“ORA expects PG&E to implement measures that are necessary to keep its system safe and reliable,” the advocate office stated. But, the report added, PG&E is also expected to “understand that its safety obligation exists independently of revenue requirement.”
Fresno is the second stop on an 11-city schedule of public participation hearings through July 28 where people can offer their opinions about the proposed rate increases. Later, the Public Utility Commission’s review process will include hearings before an administrative law judge. PG&E anticipates a judge’s recommendation and final decision by the commission in late 2017 on how much revenue is necessary for PG&E to maintain and upgrade its systems.
PG&E rate hearings
▪ What: Public participation hearings on Pacific Gas & Electric Co. proposed electricity and gas rate increases for 2017, 2018 and 2019
▪ When: 1p.m. and 6 p.m. Tuesday
▪ Where: Fresno City Council chamber, on the second floor of Fresno City Hall, 2600 Fresno St., downtown Fresno