PG&E Proposes New Rate Increase, But Says Customer Bills Won’t Rise — Yet

PG&E proposed a new rate plan for 2027–30 to state regulators Thursday, one they say would net no change to customer bills for the next two years, approximately, due to cutting out other expenses.

On its own, the proposal, submitted to the California Public Utilities Commission, shows an average increase of 3.5% in 2027 combined gas and electric bills, about a $9 monthly jump. But PG&E said that the cost would be offset by deducting other charges from customers’ bills.

The plan projects average annual increases of between 3.2% and 3.4% from 2028 to 2030 — about $9 more year-over-year than the current average utility bill. However, PG&E representatives cautioned that those figures could change.

The proposal, called a “general rate case,” is a requirement of major investor-owned utilities that establishes base energy rates to cover operations, maintenance and system upgrades. Utilities must submit one every four years.

PG&E executives said costs associated with previous general rate cases, as well as old wildfire mitigation and storm recovery costs, will be removed from customer bills, helping to offset the rate increases.

According to a KQED analysis, the average utility bill for PG&E customers increased by about 67% over the last five years. PG&E customers pay some of the highest utility rates in the country.

“We are transforming the company, and this filing is a demonstration of that,” said Carla Peterman, PG&E’s executive vice president of corporate affairs and chief sustainability officer.

The company wants to use funds to modernize and wildfire-proof the grid, increase the use of clean energy, and replace gas pipelines.

Peterman said the utility has found ways to save money through new processes and technologies, such as using drones to inspect poles and wires faster and at a lower cost. She said their proposal represents “the new PG&E,” and a concerted effort to rebuild trust with customers.

Mark Toney, executive director of TURN, The Utility Reform Network, said touting just a small increase or rates that remain flat is disingenuous.

“The rates that are currently being paid are grossly inflated and they’re artificially high because PG&E had such atrocious overspending on wildfire mitigation in 2020 to 2022,” he said.

The company spent more than double what they were supposed to on efforts to reduce wildfire risk, Toney said, and customers are bearing the brunt of that. TURN and other consumer representatives argue investor-owned utilities are incentivized to overspend on capital projects, like hardening the grid against wildfires, because that type of investment brings in returns for shareholders. Instead of protecting power lines by insulating them, which is cheaper and faster, a utility may instead underground those wires, a more expensive and more time-consuming option.

“We do not believe there is any need for any rate increases at this point,” said Roger Lin, senior attorney at the Center for Biological Diversity’s Energy Justice program.

Toney cautioned customers that while the numbers in PG&E’s rate case may look moderate, the company has other avenues to ask for cost increases outside of its general rate case, including for wildfire liabilities, storm damage, or grid emergencies.

“So on one hand, they’re saying, ‘We’re being very frugal and we’re going to have a general rate case with only a small request.’ But that has not stopped PG&E from asking for multiple rate increases in all the other areas,” Toney said.

PG&E, however, says all of their pending increase requests are factored into their projection that bills will be flat in 2027.

High electricity bills are a tremendous burden for low-income earners in the state, forcing some to decide between cooling their homes during heat waves or paying for other expenses. Energy insecurity is also a contributing factor in the state’s housing and homelessness crisis.

“The lower your income, the higher percent of your income you have to pay for an absolutely essential necessity of life,” Toney said.

The CPUC will analyze PG&E’s proposal alongside input from the public and consumer advocates. The regulatory agency will then decide how much of the proposal to approve, often suggesting a lower rate than what is submitted.

In its 2023 proposal, PG&E requested a 26% rate increase. The CPUC approved 11%.