Pacific Gas and Electric (PG&E) is facing significant backlash after proposing a rate increase to state regulators that would fund a $26.6 million shareholder incentive payment. The move comes as millions of Californians are already grappling with escalating utility bills.
PG&E, which serves approximately 16 million customers across 70,000 square miles in Northern and Central California, asserts that the proposed increase is linked to cost savings achieved through its natural gas purchasing strategy between 2022 and 2023. The company stated that customers collectively saved about $170 million due to these favorable purchasing decisions.
Under rules set by the California Public Utilities Commission (CPUC), customers typically retain the majority of these savings, with shareholders eligible for performance-based incentives if procurement costs fall below established market benchmarks. PG&E maintains that its proposal aligns with these regulations.
However, the request has ignited anger among customers, particularly those already burdened by high energy costs. Janice Mercado, a resident of Antioch, expressed frustration, stating, "The PG&E rates keep going up and our Social Security doesn’t. So it’s hard to balance the budget here." She questioned why the savings were not directly returned to the customers paying the bills.
Another Bay Area resident, Janice Henry, criticized the proposal, emphasizing PG&E's history of incidents. "PG&E needs to drop the rates instead of raising the rates. They need to get back to the consumers instead of the big pocket people who already have plenty of money," Henry said. She added that customers are still paying for past failures that have led to loss of lives, homes, and livelihoods.
Consumer advocates have also voiced strong opposition. Mark Toney, executive director of The Utility Reform Network (TURN), argued that it is unfair for customers to finance rewards for PG&E when costs are lower, especially since customers bear the financial burden when the utility exceeds spending expectations. "If they want their shareholders to be rewarded when they underspend, then their shareholders should be held accountable when they overspend. And that’s not what PG&E is asking for," Toney stated.
The controversy unfolds as California consumers face increasing utility expenses. The California Public Advocates Office has projected that PG&E rates could rise by as much as $840 annually by 2030, a projection the utility disputes. Currently, the average PG&E customer pays about $285 per month, or approximately $3,420 a year. Some customers report making significant lifestyle adjustments due to these costs, including one resident who spent nearly $9,000 on PG&E bills last year.
The California Public Utilities Commission is expected to render a decision on PG&E's shareholder incentive request next year.