SAN FRANCISCO (KMJ/KFSN} — On Thursday, Pacific Gas and Electric asked state regulators to charge customers more so shareholders can profit more. It’s a process that happens every three years.
Even though PG&E customers pay some of the highest energy bills in the country, even though PG&E has shattered profit records, the utility is now asking the California Public Utilities Commission to raise rates so it could pay investors more.
PG&E is asking for an 11.3% return for investors, up a percentage point from the current limit.
That would increase customer bills by $5.50 per month.
“First and foremost, PGE is increasing their rates to benefit their shareholders–pure profits,” Silicon Valley State Senator Dr. Aisha Wahab said. “This past year alone, they made $2.47 billion in pure profits let alone the $86 million that goes to shareholders dividends.”
The Utility Reform Network, or TURN, advocates on behalf of ratepayers.
“It’s unbelievable. I’m floored that PG&E is asking for such a large increase in their rate of profit, their Cost of Capital application,” TURN Executive Director Mark Toney said. “They apply every three years to the California Public Utilities Commission. It has to approve how much profit they can make on investments.”
PG&E says they’re asking for the increase because they want to attract and keep investors.
“PG&E will keep saying they have to attract investors and make sure that they are profitable enough to be invested in,” Wahab said.
The utility says investors in California’s energy face a lot of risks, like inflation and disruptions to the supply chain which can increase prices and interest rates.
On it’s website, the utility stated, “PG&E seeks to adequately compensate investors for these risks, consistent with other companies with similar risk levels across the country.”
PG&E noted that climate change has also increased the impact of storms and wildfires. PG&E is also facing big pressure to prevent its equipment from sparking devastating fires.
Last year, PG&E increased its rates six times.
“There were five electricity increases and one natural gas increase,” Toney said.
The average residential customers paid about $440 more a year, compared to 2023.
Earlier this month, PG&E customer bills rose by about $3 for average households. That increase covers rising transmission service costs and repay the utility company for state-mandated vegetation management work the company completed in 2021.
Wahab is proposing a new plan to limit utility companies to only one rate increase a year.
“We pay more and more each month to keep the lights on,” Wahab said.
According to the PG&E website, “PG&E pays the lowest dividend in the utility industry, and as a result PG&E reinvests 97% of what it earns back into the company. This includes programs that make the system safer for customers.”
If the CPUC approves PG&E’s proposal, the rate hike would take effect starting in January 2026.
By ABC30-ABC7 Suzanne Phan
Listen to the report by KMJ’s Liz Kern.
