Ready to hand over more cash to PG&E for power? Fresno leaders right to oppose proposal
The notice carried a bureaucratic headline that only the most devoted would read to the end:
“Notice of Pacific Gas and Electric Company’s request to increase rates to make targeted investments for a safe, reliable, clean energy future as part of its 2023 general rate case application (A.21-06-021).”
Thankfully, Fresno has some dutiful city officials, and they explored further into the utility’s notice. What they found was this:
▪ First, PG&E is asking state regulators to hike electrical rates by 18% for residential customers in 2023. Rates would go up by smaller amounts to 2026, but overall, rates would jump by 22.5%.
▪ Second, prices for natural gas service would also go up 18% for the typical residential user.
PG&E says the average monthly residential bill (based on all customers) would go from $199.65 to $235.65. That is a monthly increase of $36.
Understandably, Mayor Jerry Dyer and Fresno City Council members were alarmed, and with good reason. Fresno’s poverty rate, as of 2019 data, was 19.1%; the poverty rate for families in west Fresno was even higher, at 37.3%. Fresno is one of the poorest cities in the state.
PG&E rate increases affect more people than just Fresnans, of course. The utility serves 16 million customers in a huge area — from the Oregon border south to Bakersfield and from the Sierra to the Pacific.
Dyer and council sent a letter to the state Public Utilities Commission asking it for several things. First, freeze rates and work out a more equitable solution. Second, PG&E should audit its spending to find cost savings. The city leaders also want the PUC to consider reforming how rates get determined.
“Unfortunately, enormous PG&E bills are a significant threat to most of our disadvantaged communities and struggling families trying to make ends meet,” Dyer wrote.
The Fresno County Board of Supervisors on Tuesday followed the city’s lead in opposing the rate proposal. “I know my residents, including myself, have a hard time with these massive energy bills,” Supervisor Steve Brandau said.
Significantly, even the program that helps low-income customers pay their monthly bills would see an 18.3% hike in the first year.
PG&E defends hike
PG&E proposes to use higher rates to pay for improved wildfire safety. It would replace standard electrical transmission lines in high-fire areas with ones that are spark resistant, or workers would put lines underground. The company also wants to do more trimming work to clear trees and brush from around power lines.
Gas lines in communities with earthquake risk would be replaced, and more robotic inspection of gas lines would be done.
PG&E also proposes to use new funds to set up electrical vehicle charging stations, a nod to Gov. Gavin Newsom’s push to convert cars and trucks away from gas and diesel, which cause global warming. In another step to reducing climate change, PG&E wants to make more homes all-electric and reduce natural gas for heating and cooking.
Robert Kenney, PG&E’s senior vice president for regulatory and external affairs, admits the rate proposal is a significant increase.
But the proposed rates, he said, better position PG&E to face risks like wildfires that have evolved with phenomenons like the drought.
Request too high
No discussion of rate hikes is complete without a look at the CEO’s compensation, in this case, Patricia K. Poppe. The fourth CEO in two years of PG&E Corp., she gets paid $1.35 million in annual salary and another $9.25 million in incentives, according to Bloomberg. Plus, PG&E agreed to a one-time payment of cash and stock worth $40 million for awards she earned at her previous employer, a Michigan utility. Shareholders pay compensation, not customers in monthly bills. Still, the contrast is stark.
While high pay for utilities executives might be standard practice in the industry, ratepayers cannot relate, and only know what their bills say.
At least PG&E is not using the rates to pay dividends to shareholders; the last time dividends went out was 2017.
The Public Utilities Commission needs to sharply scrutinize PG&E’s rate request and carefully consider the comments it has gotten from Fresno leaders. It is critical that the PUC recognize the financial hardships that many Californians already bear. If the PUC thinks rates indeed need to go up, programs to help hardship customers should be expanded so more can qualify.
An 18% hike in one year is simply not affordable. PG&E does need new funding to improve wildfire safety and create a climate-friendly electrical grid. But it has to be realistic, especially when so many customers have seen their personal finances hurt by the pandemic. That massive rate request needs to be negotiated down to something more feasible.
Share your view
The utilities commission has scheduled public hearings later this year. The commission takes public comments at 415-703-1584 or by email at PublicAdvocatesOffice@cpuc.ca.gov.
This story was originally published September 10, 2021 at 10:36 AM.