Customers of the utility company Pacific Gas & Electric can expect higher prices in the future and will be seeing their monthly bills go up as a result.
Millions of households in California get their utility services from the company and will be directly affected by the 8% average rate increase. The money from the increase will go towards funding improvements in the company’s Northern California service area in an attempt to address outdated equipment and cut back on the risk of that equipment sparking another potentially fatal wildfire.
The increase will go into effect starting March of this year. This means that residential customers of the company will soon be seeing the results of this rate hike and will be paying an average of $13.44 more monthly when it comes to their gas and electric bills. While it may not seem like much, multiply that by 12 over the course of the year and the average customer will be paying over $150 more annually ($161.28, approximately) for the same services rendered.
However, the added cost comes at a time where individuals, couples, and families are struggling already to make ends meet. The Covid-19 pandemic altered economic circumstances for many people. For those who are behind or on the verge of falling behind, the higher bills are yet another financial obligation they must contend with in a situation that is already precarious.
Despite what appears to be a quickly-looming date for price increases, the negotiation for the increase itself has been a long time coming. Power regulators in California met with Pacific Gas & Electric and other groups concerned about the financial impact customers might be expected to take on for two years before approving an increase.
The utility company’s grid provides power to roughly 16 million people in its service area, but the company itself has also been accused of neglect. The out-of-control wildfires of 2017 and 2018 in California were thought to have been caused by outdated PG&E equipment. The wildfires killed over 120 individuals and destroyed more than 27,000 residences and buildings.
In 2019, Pacific Gas & Electric filed for bankruptcy. They also negotiated $25.5 billion worth of settlements with those who affected by the fire. It was a real life catastrophe that led to a negative public image and relationship with the public from which the company still has not fully recovered. Now the company has come out of the bankruptcy and is seeking to prevent the same problems that led to those disastrous consequences.
The revenue from the rate increase will go to upgrading equipment and implementing new safety measures. While the company is to be lauded for their efforts to increase safety, it also dragged its feet on implementing solutions that were long overdue, and now their customers are literally paying the price. Unfortunately, for those without solar panels or battery storage, relying on a local utility service provider might be their only option and they have no choice but to pay the bigger bills.
A solar panel company can install solar panels and battery storage like the Tesla Powerwall easily so that reliance on utilities alone is no longer required. The fact that these panels and battery storage can provide residential power for the home and provides independence is good news as utility rates go up and could increase again in the future.
Astonishingly, the rate increase could have been even higher. Regulatory documents show that Pacific Gas & Electric originally proposed the goal of $2 billion more in revenue from increasing customer rates in what would have been from 2020-2022. After negotiations, regulators approved the final rate settlement, which will generate $1.15 billion for the utility company.
With wildfire season fast approaching, California will once again be at risk for large wildfires starting and spreading. Pacific Gas & Electric says that it plans to use added revenue to pay for improvements to the grid, trimming trees that are near power lines, and pursuing other actions to decrease the odds of starting another blaze.
Some express disappointment with the approval of the rate increase, pointing to the financial strain that the pandemic has caused already. TURN(The Utility Reform Network) worked with other groups to negotiate the settlement of the rate increase with Pacific Gas & Energy.
TURN’s executive director Mark Toney expressed his concern that higher bills for consumers “will only add” to the problems they have. For now, it appears that customers have no choice in the matter.
The rate increase will go into effect on March 1, 2021.