Two public hearings Monday in Bakersfield will gather public comment on Pacific Gas and Electric Co.’s proposal to raise its core revenues almost 17 percent during the next three years, bringing them to nearly double what they were 10 years ago.
The hearings at 1501 Truxtun Ave., one starting at 1 p.m. and the other at 6 p.m., are part of a regularly scheduled process to decide how much the San Francisco-based gas and electric utility should be allowed to charge for things like maintenance, system upgrades and employee incentive programs.
PG&E says it needs the money to make sure it can provide safe, reliable energy. But consumer advocates at its primary regulator, the California Public Utilities Commission, say the company can get by with a much smaller amount. Typically the CPUC approves an increase somewhere in the middle.
Under PG&E’s proposal, introduced in September and updated in February, its average residential electric customer using 500 kilowatt-hours per month would see a $1.99 per month increase, or 2.23 percent, starting early next year. Its average residential natural gas customer consuming 34 therms per month would see a 1.76 percent increase, or 88 cents per month. Those averages do not take into account customers on PG&E’s discounted-rate program.
The company has not released projections on how much these rates would increase in 2018 or 2019, largely because of ongoing, state-level discussions about how to structure utility rates in the future.
At issue in Monday’s so-called General Rate Case, or “GRC,” hearings are items accounting for roughly half of PG&E’s income. The other half have to do with expenses stemming from its purchase of fuel and power, which are the subject of separate proceedings. Both categories are considered pass-through costs, though the company earns substantial income on the interest from its GRC-related investments.
PG&E has proposed raising its GRC income by $333 million per year to $8.25 billion in 2017. It wants a separate, $469 million per year increase in 2018, and a $368 million boost in 2019.
If approved by the CPUC at those levels, the company’s GRC revenues would reach $9.1 billion per year in 2019, a 16.6 percent increase from this year’s level and a 95 percent increase since 2006.
PG&E says it needs the money for improved technologies to deal with rooftop solar and other renewable energies, as well as emergency preparedness, new mobile technology for its field workers and better prevention and management of wildfires.
“This really is our opportunity to enable us to reach our goals, and our goals are pretty straightforward. But they're not simple,” PG&E spokesman Donald Cutler said.
Those goals, he added, are becoming the safest, most reliable energy provider in the country while supporting California's goal to be a leader in renewable energy and emerging energy technologies.
The CPUC’s Office of Ratepayer Advocates has countered with a sharply different proposal. It recommends cutting PG&E’s GRC revenues next year by $85 million, then increasing them by $274 million per year in 2018, and adding another $283 million per year in 2019.
Taken together, these steps would raise the company’s approved GRC revenues 7 percent during the next three years, or roughly a quarter what the company has proposed.
Specifically, the CPUC’s ORA says PG&E should not be allowed its full proposed funding of short-term financial employee incentives, thereby saving $90 million per year. It also wants the commission to deny, among other things, the utility’s request for repayment of record-keeping expenses, which the office says PG&E was already reimbursed for in 2014, and which would save ratepayers $21 million.
No official action is expected to be taken at Monday’s hearings.