PG&E seeking to raise rates to cover losses from wildfire issues

April 23, 2019

pg&e

PG&E requested permission from the California Public Utilities Commission (PUC) on Monday to hike rates, which would result in the average household’s electricity and natural gas bill increasing by $22.67 a month. [Sac Bee]

Currently in bankruptcy over the massive liabilities it incurred from its involvement in Northern California wildfires, PG&E is also requesting that the PUC raise its return on equity, or maximum profitability, from 10.25 percent to 16 percent. However, the company says it is open to discussing alternatives with state officials that would reduce the size of the increase the utility is requesting.

PG&E says it needs increases in its rates and profits in order to raise investment capital and invest billions of dollars in wildfire safety measures and system reliability. Because of its financial woes, PG&E needs to give investors a higher return in order to attract capital, the utility is arguing.

“In order to invest in the affordable, safe, reliable and clean energy future our customers expect and demand, investors must continue to play a vital role in providing the capital necessary to fund essential safety and reliability infrastructure upgrades,” PG&E Chief Financial Officer Jason Wells said in a statement.

Mark Toney, of The Utility Reform Network consumer advocacy group, said PG&E’s request is outrageous and would produce a windfall to Wall Street.

On Monday, California’s other major utilities, Southern California Edison and San Diego Gas & Electric, joined PG&E in requesting that the PUC grant them larger profit margins. Edison likewise says its needs to compensate for financial losses caused by major wildfires.

Edison is asking the PUC to raise its maximum profit margin from 10.3 percent to 16.6 percent. The proposal would likely result in a $12.20 a month increase to customers’ bills.

San Diego Gas & Electric is seeking to raise its profit margin from 10.03 percent to 14.3 percent. It is unclear how much the proposed increase would raise utility bills.

The requests from the three utilities, but particularly PG&E, are expected to draw backlash from legislators. Sen. Jerry Hill (D-San Mateo) has already introduced a bill, SB 549, that would give the Legislature a say over authorizing rate increases for PG&E.

If PG&E’s request is approved, the rate hike would take effect in Jan. 2020.


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kayaknut

And now, “A federal judge has approved Pacific Gas & Electric Corp.’s plans to pay $235 million in employee bonuses this year”


rukidding

That is absurd. Is there not any protection for the citizens? The oil companies just raise their prices as they see fit gouging the public at will. And now PG&E is allowed to charge the ratepayers for their failure to operate safely. We have all heard the term slap on the face, well PG&E customers you have been slapped on the face.


rukidding

Well that just about takes care of most seniors Social Security “raise.” Filing for bankruptcy, but still wants to make a profit? Where are you entitled to make a profit when you file for bankruptcy which will probably result in many small contractors losing everything because of PG&E’s bankruptcy. Usually an independent purser is appointed by the courts to receive all income and then disperse it to pay the bills and not pay raises, bonuses and anything else they can siphon off of the rate payers. This should be the time when corrective measures be taken to deflate PG&E and prevent it from acting like a monopoly.


tomsquawk

surprise, surprise, surprise. i already pay a charge for maintaining the delivery system, it’s as much as my electric and gas usage. so once again it is on us. let’s overhaul the PUC.


shelworth

Just wait until California ends the sale of Natural Gas in 2030! Can you say $500+ a month for electricity? Plus changing out your dryer, furnace, oven, stove, etc. That, and the electric grid crashing every few days, and not being allowed to use air conditioning between the hours of 9am and 9pm… Can’t wait, hope I’m in Idaho with all my friends who moved there.


kettle

“Just wait until California ends the sale of Natural Gas in 2030! ”


This is 100% false. Why are you posting fake info?


ml1999

Will Governor Newsom first expedite tree thinning, fire breaks, and select logging? Immediately?


The reference to ‘clean energy future’ means subsiding more high-cost solar power, while the State shuts down reliable, safe, low-cost Diablo Canyon.


Rambunctious

Monopoly power….don’t blame PG&E blame your representatives in the legislature…..


pi-on

Uh, no. Since I wasn’t involved with the maintenance of the power line infrastructure (authority) I shouldn’t have to help shoulder the cost (responsibility) that PGE obviously failed to do.


Mitch C

If these utilities are interested in increasing their profit margin, it would be interesting to evaluate how much attention and action was given to cost cutting. Since profit is revenue minus expenses, it doesn’t seem just to ding the ratepayers without a serious look at where money is spent. As an aside, i’d Be happy with a 10% profit margin since anyone who has money in a bank savings account is getting less than 1% on their money. It would be interesting to know why these utilities seek a higher profit percentage.


tomsquawk

PUC


kayaknut

Back on April 18, “Amid its bankruptcy, PG&E has hired a new chief executive officer who will receive a $2.5 million base salary, a $3 million signing bonus and an estimated $3.5 million a year in stock:” and now they want to raise rates, anyone surprised?