Over the past 20 years utility companies have increased the cost of energy. Pacific Gas & Electric, one of the largest utility providers in California, will be making improvements to how they provide energy. PG&E’s goal is to provide safe and reliable gas and electricity that is environmentally sound and affordable to their customers. But in order to meet and improve their infrastructure, a PG&E rate increase will be introduced to their customers. The increase will help fund the following core strategies: improve operations, strengthen and better identify safety compliance, and rebuild relationships with customers, communities, and stakeholders. Some examples of the utility company’s recent improvement efforts within the last 4 years include ongoing safety, response time, frequency and duration of outages, and customer satisfaction with billing and payment options.
Why PG&E Rate Increase?
The PG&E rate increase will create revenue to improve safety risks and invest in clean energy with solar and storage renewables. Modernization of the grid with clean energy integration is also one the utility’s priorities. Below is a breakdown of the PG&E rate increase goals:
Gas Distribution: $1.8 billion in costs to improve safety operations, distribution systems, and procure natural gas to customers. Additional revenue will enable faster response to emergencies such as possible gas odors, finding and fixing leaks faster to minimize hazards, and reduce greenhouse gas emissions. Other investments will go toward replacing aging and obsolete pipes, minimizing corrosion, adding monitoring and control devices to piping, and installing more emergency shut-off valves.
Electric Distribution: $4.4 billion in costs to improve safety operations and distribution systems of electricity transmission and interconnected generation sources. Funds will be allocated to public safety and workforce education, emergency preparedness and response (ie: natural disasters, fires, etc.), risk management, grid reliability, affordability, and customer satisfaction.
Generation: $2.2 billion will be spent to better operate and improve nuclear, hydroelectric, fossil, PV, and fuel cell generation. PG&E will also make improvements toward bundled energy (power delivered from multiple resources) for their customers. A multi-year effort to inspect, modify, and upgrade PG&E’s dams and water conveyance systems will also implemented with the funds.
Customer Care Improvements: Other funding will be directed to serve the needs of PG&E’s 6.3 million customers. The focus is based on continuous improvement to customer service. This includes automation, providing choice and control to customers over their energy usage, align more closely with community needs, and enable customers to have more personalized approach with how they manage energy.
Capital expenditure forecast
PG&E Rate Increase Impact
According to PG&E, a typical customer than consumes 500 kwh per month will see their bill increase by $3 for total annual increase of $92. The average PG&E customer pays about $165 for gas and electric energy. With the price hike, the utility carries an optimistic outlook considering manufacturing growth, lower unemployment, and higher in household incomes. Another aspect of the rate increase is to also to help low-income customers receive affordable electricity through the utility’s Assistance Programs that offer lower rates for energy.
In the first half of 2018, PG&E customers can expect a rate increase close to 3% per kilowatt hour – an 8.8% higher electric bill than a year ago. Customers with Time-of-Use plans can also expect changes in 2018. The idea is encourage peak shifting so consumers can use energy during off-peak hours when demand is less.
PG&E Time-of-Use & Tiered Rate Plans
In January 2018, PG&E provided notification to their customers regarding the new rate plan and options that are available to help guide them to compare the available rates and choose a plan. PG&E also will incorporate a Bill Protection for 12 months to allow customers to try new plan risk-free. With more tools and programs available to the customers, communication and tips from PG&E will assist customers to better manager their energy and stay on budget.