SAN FRANCISCO - California regulators decided on Pacific Gas & Electric's (PG&E (NYSE:PCG)) proposed rate increases on Thursday, setting the stage for a rise in customer bills from January 2024. The California Public Utilities Commission (CPUC) greenlit an alternative rate proposal, which suggests an 11% increase in monthly rates for PG&E customers, down from the original 26% revenue requirement hike. This decision comes after a series of delays and intense scrutiny from state regulators.
The approved rate hikes would translate to an additional $32 on average monthly bills, affecting roughly 16 million Californians and adding to the cumulative $100 increase customers have experienced over the past eight years. Non-CARE program customers or those without similar assistance will be hit with a yearly 3.6% bill increment for a three-year duration starting 2024. In contrast, CARE customers will witness a 3.8% average increment over the same period, kicking in on Jan. 1, 2024.
PG&E has faced rigorous examination from regulators leading to a $2 billion reduction from their initially requested $15 billion budget. The utility company justifies the approved increases citing inflation and the costs associated with fire-safety measures, including insulating power lines or relocating them underground.
In addition to setting customer rates, the CPUC also gave a nod to PG&E's plan to underground 1,230 miles of power lines in high fire-risk areas as part of the general rate case. This move is part of a compromise that incorporates consumer advocacy influences advocating for cheaper alternatives such as protective covering over lines, rather than burying more power lines as initially proposed by PG&E. This compromise achieves a cost-saving measure that spares ratepayers $1.7 billion.
This will determine a spending cap for PG&E on programs such as wildfire and vegetation management, which have been significant factors in the rising rates.
Despite the looming increases, PG&E maintains that these hikes are an exception, emphasizing their commitment to limiting future rate increases to at or below inflation levels. Customers and stakeholders await the implementation of this decision with hope for a balance between necessary safety improvements and financial impact on consumers. Meanwhile, Assemblyman James Gallagher expressed opposition to the rate increment, pushing for transparency and accountability.
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