PG&E Rates Could Go Up Again as It Aims to Spend More on Connecting New Customers

Electricity rates could be going up again if PG&E’s most recent request for a spending increase is accepted by California regulators.

The request follows three temporary rate increases over the past year and a much larger general rate adjustment approved in 2023. PG&E’s rates have doubled over the past decade, which it says is the result of its heightened need to mitigate wildfires and handle repairs after increasingly severe storms.

This time, the company says it is seeking to raise the caps on its capital costs to connect more new users to the energy grid, which could mean an additional charge on customers’ bills depending on how much they spend.

The California Public Utilities Commission sets the spending caps. PG&E’s current caps for 2025 and 2026 equal almost $1.3 billion combined, but the company is facing a backlog of connection requests, in part due to the additional work that extreme weather has created over the past few years.

Now, PG&E is asking permission to raise its spending limits by $3 billion over the next two years to increase its progress on new connections.

“What that’s going to do, if the PUC agrees with it, is it’s going to be another rate increase for PG&E customers,” says Lee Trotman, a spokesperson for the Utility Reform Network, or TURN.

PG&E says if its increases are approved, customers’ bills will only increase as its spending does, up to those caps. The company estimates that the end result will be a maximum rate hike of 1.8% — or $4.33 tacked onto the average customer’s monthly bill and $2.81 a month for lower-income households.

“PG&E will recover costs only for what it spends, and the CPUC will review spending to ensure it is just and reasonable,” the company says in a statement.

The additional spending would allow the company to bring thousands more customers onto the grid per year, according to PG&E. In 2023, nearly 10,000 new customers came onto the grid, though about 1,500 projects were delayed due to winter storms. That was up from roughly 8,000 connections added in 2022.

PG&E estimates that this year, it will bring 13,000 new schools, hospitals and homes onto its power grid. In its request to the PUC, it says the additional funding will allow it to more than double the amount of connection work that it can complete.

“Adding thousands of new connections will help spread fixed grid operations and maintenance costs across more customers,” the statement continues.

The rate hike — if it’s realized — could also be “balanced out” by other items or rates that will be dropped from people’s bills over the next few years, PG&E says. Trotman is more skeptical.

“PG&E can say this is for 2025 and 2026, and then by the time these rate hikes hit, we’ll have adjusted the rates, etc., etc., but have you ever seen rates go down?” he asked.

KQED’s Ezra David Romero contributed to this report.