About 16 million people in California will see their electric and gas bills go up by an average of more than $32 per month over next year in part so that one of the nation's largest utility companies can bury more of its power line s to reduce the chances of starting wildfires.
Pacific Gas & Electric had initially asked state regulators for permission to raise rates by more than $38 per month so it could bury 2,100 miles (3,380 kilometers) of power lines in areas that are at high risk for wildfires. But consumer advocacy groups complained, arguing PG&E could save ratepayers money and still reduce wildfire risk by putting a protective covering over the power lines instead of burying them.
Thursday's decision by the California Public Utilities Commission sought to find a middle ground. Commissioners decided to let PG&E bury 1,230 miles (1,979 kilometers) of power lines, which would be $1.7 billion cheaper than PG&E's proposal.
The commission rejected a proposal by a pair of administrative law judges that would have only allowed PG&E to bury 200 miles (322 kilometers) of power lines while installing protective covering on 1,800 miles (2,897 kilometers) of power lines.
“We as a commission have struggled mightily with the additional hardship these increases will create for families,” said Commissioner John Reynolds, who wrote the proposal regulators approved. “I can say that I am confident that you are getting something out of this investment.”
PG&E said 85% of the increase was to improve safety in its gas and electric operations. It says typical bills will increase by about $32.50 next year, followed by a $4.50 increase in 2025 before decreasing by $8 per month in 2026.
For low-income customers who qualify for discounted rates, PG&E said typical monthly bills will increase by $21.50 next year, followed by a $3 per month increase in 2025 before decreasing by $5.50 per month in 2026.
“We are committed to being the safe operator that the people of California expect and deserve,” PG&E CEO Patti Poppe said in a written statement. “We appreciate the Commission for recognizing the important safety and reliability investments we are making on behalf of our customers, including undergrounding powerlines to permanently reduce wildfire risk.”
Electricity rates have been increasing in California over the past decade in large part because utility companies are rushing to upgrade their aging infrastructure to prevent wildfires. PG&E’s residential rates have more than doubled since 2006, according to The Utility Reform Network, an advocacy group for ratepayers.
The turning point for PG&E came in 2018 when a windstorm knocked down one of its power lines in the Sierra Nevada foothills that started a wildfire. Within a few hours, the fire had spread to Paradise, where it destroyed most of the town and killed 85 people.
PG&E eventually pleaded guilty to 84 counts of manslaughter and filed for bankruptcy after facing more than $30 billion in damages related to the Paradise fire and other blazes started by its equipment. The company has pledged to bury 10,000 miles (16,093 kilometers) of power lines over the next decade.
The five people on the commission, who are appointed by Democratic Gov. Gavin Newsom, approved the rate increase unanimously while voicing concern for ratepayers.
“The rates we are asking ratepayers to pay are increasing at a rate that will become unaffordable in the very near future if we don’t find mechanisms to better control costs,” Commissioner Darcie Houck said.
Before the vote, dozens of people called the commission to complain PG&E's rates are already unaffordable, with one woman testifying she doesn't watch TV or turn on the pilot light for her gas stove because she can't afford it.
Cheryl Maynard, who identified herself as a survivor of the Paradise fire, called the rate hikes “outrageous” and accused the company of trying to secretly recoup the billions of dollars it paid to wildfire victims in a settlement.
“PG&E is getting our settlements back from us by raising rates. This has to stop,” she said.
