Pacific Gas &
Electric is seeking to raise rates by more than $2
billion over three years, arguing it needs the money in
part to upgrade its gas and electricity networks and
hire an additional 2,200 employees.
The San Francisco-based utility made the request Monday
when it submitted a draft of its 2014 general rate case,
the first step in a long process to set natural gas and
electricity rates for utility customers.
"Safe, reliable and affordable energy is the foundation
of our economy," PG&E President Chris Johns said in a
four-minute video about the proposed rate hikes on
PG&E's website. "It's what this rate case is all about."
If the request is approved by state regulators with the
Public Utilities Commission, the typical
PG&E customer who gets both gas and electric service
from the utility would see their monthly bill increase
by an average of $12 a month, or $144 a year, beginning
Jan. 1, 2014.
numbers for average bill increases are staggering --
about $150 a year," said Mindy Spatt of the consumer
advocacy group TURN. "The general rate case is the main
place where PG&E says 'This is what it will cost us to
run the utility.' The good news for consumers is that
TURN will be going over this with a fine-tooth comb."
Utility rate cases, which are typically filed every
three years, are highly complex proceedings before state
regulators. The five-member PUC is not expected to vote
PG&E's general rate case until the end of 2013.
"This shouldn't just be an argument about cost," Tom
Bottorff, PG&E's senior vice president of regulatory
relations, said in an interview Monday. "The discussion
is, what's necessary to make the system safe?"
PG&E is seeking $1.25 billion in 2014, $500 million in
2015 and $500 million in 2016 to cover additional
infrastructure improvements and increased cost of labor
Of the $1.25 billion, $459 million would pay for the
replacement of miles of older gas lines, new technology
to improve gas leak detection and a new gas distribution
control facility. PG&E plans to replace 180 miles of gas
distribution lines per year, compared with just 30 miles
currently, a sixfold increase.
Those issues stem from the deadly September 2010 San
Bruno pipeline explosion, which raised questions about
PG&E's maintenance of its natural gas pipeline network,
record-keeping and how it responded to the disaster.
PG&E plans to continue working with Sunnyvale-based
Picarro, a startup whose gas leak detection technology
is allowing PG&E to more quickly identify and repair gas
leaks. Every report of a suspicious gas odor will be
also be treated as an emergency response call.
Roughly $791 million would go to the electric side to
pay for the cost of connecting new residential and
business customers, replacing cables and station
equipment and adding new transformers. The utility will
also increase patrols and take other measures to
mitigate wildfire risk.
PG&E has about 20,000 employees, but wants to hire 2,200
more dedicated to improving system safety, reliability
and customer service. About 180 additional customer
service representatives would be added to beef up
staffing at the utility's various call centers.
"Currently, 80 percent of phone calls from customers are
answered within 60 seconds," Bottorff said. "We want to
improve that response time to 30 seconds."
PG&E uses a complex electrical rate plan with four
levels, or tiers, of billing, which vary by region and
season of the year. Tier 1, or baseline customers, use a
minimum level of electricity. Customers are charged an
increasingly higher rate as their electricity use rises
above the baseline through tiers 2, 3 and 4. The more
electricity you use, the higher rate you pay -- a system
designed to reward energy conservation.
Customers can find out what tier they're in, how much
electricity they use each month and the charges for it
on their monthly PG&E bill, under the area marked
"Electric Account Detail."
If approved, electric bills for the typical residential
customer would increase about $5 a month, to about $95 a
month. Natural gas bills for the typical residential
customer would increase about $7 a month, to about $53 a
The proposed rate increase would also improve dam safety
modifications at PG&E's hydroelectric facilities and
implement new safety Nuclear Regulatory Commission
regulations at the Diablo Canyon nuclear facility in San
Luis Obispo County.
Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.