PG&E Causes Controversy with New Pricing Announcement

After soaring monthly bills from Pacific Gas and Electric Co. this winter prompted a public outcry, California utility regulators said Thursday that they will consider tweaking natural gas rates to ease the pain.

The California Public Utilities Commission, which sets rates for the state’s three big utilities, said it will consider ways to prevent future spikes in monthly gas bills. In particular, the commission may adjust the baseline — a figure that represents a portion of an average residential customer’s monthly gas usage — that is used to calculate rates.

The move came one day after state Sen. Jerry Hill, D-San Mateo, issued a report examining the likely causes of this winter’s high bills. He also suggested steps the commission could take, such as changing the baseline during winter months.

Hill represents San Bruno, site of the deadly 2010 explosion of a PG&E gas pipeline, and he has been a fierce critic of both PG&E and the commission. And yet, the commission on Thursday praised his suggestions.

“There are many solid recommendations in Senator Hill’s report,” the commission said. “We will review the report closely to determine the best way to implement appropriate measures, such as adjusting the winter baseline.”

Hill’s report largely echoes PG&E’s explanation for the rising bills, with some additions.

Following the San Bruno explosion, the commission authorized PG&E to increase its natural gas rates to pay for upgrades to the company’s sprawling gas pipeline network. The most recent rate hike of 13 percent took effect in August but attracted scant notice, since most Californians use little gas during the summer.

That changed when the winter proved to be colder and wetter than the last. In addition, wholesale natural gas prices are higher than last year.

Hill’s report, however, also highlighted another possible cause.

Rates for both electricity and gas are calculated using a baseline, a figure meant to represent a portion of a typical customer’s monthly usage. Customers are charged a higher rate when their usage exceeds the baseline.

According to Hill, the baseline used by PG&E with the commission’s approval was lower in December and January than required by state law. As a result, PG&E customers often found themselves paying the higher rate. Even if they used only 20 percent more gas in January than they did in the same month last year, their bill could be 40 percent higher, according to the report.

“The research showed that the most vulnerable are being hit the hardest at a time when they need heating the most,” Hill said in a statement accompanying the report. “PG&E and the Public Utilities Commission need to prioritize customer heating needs in a way I have not yet seen.”

PG&E spokesman Donald Cutler said the utility will study Hill’s report. All of the utility’s rates, he said, had been developed with the full involvement and approval of the commission.

“But of course we understand that any changes to a customer’s rate that result in an higher than expected bill are frustrating, and we are here to help our customers take control of their energy use and manage costs,” Cutler wrote in an email.

Regulators Considering PG&E Gas Bill Changes after Rates Outcry, by David R. Baker, SFGate, March 2, 2017.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *