SAN FRANCISCO — PG&E on Monday unveiled a restructuring of how the utility charges people for electricity, a move that will impose a steep increase in electric bills for residential customers.
The higher electricity costs, which take effect March 1, mark the second time in two months that power bills have risen for PG&E customers. Monthly electricity bills last jumped on Jan. 1.
What’s more, the higher electricity bills come on top of a huge jump in monthly gas bills that took effect last summer. As of Aug. 1, monthly gas bills soared 12 percent.
At present, the monthly PG&E electricity bill for a typical residential customer is $99.13 a month.
But as of Wednesday, due to the new rates and changes in its billing tiers, the new average monthly bill will jump nearly $12 a month to $110.77, according to the company.
“We are trying to simplify the rate structure,” said Donald Cutler, a PG&E spokesman. “We are trying to align the cost of service to the service that is being provided.”
San Francisco-based PG&E conceded that customers who tend to use less electricity are likely to pay more in their monthly power bills, while those who use more electricity will likely be paying less under the bill-balancing effort.
Why? According to PG&E, an analysis indicates that customers who have used a great deal of electricity have tended to subsidize those who used very little under the prior system of several billing tiers, especially since PG&E has a certain minimum expense of connecting each residence to the electricity grid.
PG&E is reducing the number of billing tiers to two, down from the prior three. At one point in recent years, PG&E customers were grouped into five tiers.
“People should be rewarded for conserving energy, and not rewarded for being an energy hog,” said Mark Toney, executive director of The Utility Reform Network, a consumer group. “People are being punished with higher bills for using less energy.”
Just last July, the average PG&E residential customer paid $145.36 a month for gas and electricity combined. Effective March 1, that combined bill will rocket to $165.10 a month, an increase of nearly 14 percent, or nearly $20.
Electricity bills last July 31 averaged $96.94. By March, the increase in electricity bills of $13.83 will equate to a 14.3 percent jump in those power costs over the 7-month period.
Gas bills that at the end of July averaged $48.42 are now $5.91 higher and average $54.33, a 12.2 percent increase since midsummer.
About two-thirds of PG&E residential customers are likely to be saddled with more expensive monthly electricity bills, TURN estimated.
PG&E says that it must pay fixed costs to connect a residence to its electricity grid, and it seeks to recoup those costs through the restructuring.
“These changes to the rate structure were developed with the energy companies, the PUC and a number of consumer groups from across the state,” Cutler said.
In addition, people who use power far above the levels in the tier structures will be obliged to pay a 10 percent surcharge on top of their basic electricity bill.
“We understand that any change to the way our customers are accustomed to being charged for energy may cause some questions,” said Deborah Affonsa, vice president of customer service for PG&E, in a prepared release. “We want all of our customers to know that we’re here to help them understand these changes and manage their energy costs.”
PG&E Electricity Bills Will Rise This Week amid Rate Restructuring, by George Avalos, The Mercury News, February 27, 2017.