Why Did PG&E Increase its Rates?

The electric and gas bills, on average, are rising by 9.4% for PG&E residential customers in early 2022. These changes in average monthly electric and gas bills are part of “annual true-up” – a regulatory PG&E filing with Public Utilities Commission (PUC).

“These changes occur annually to consolidate rate changes approved by our regulator, the PUC, and drivers can vary from year to year,” said Paul Doherty, a PG&E spokesperson.

Fatal Wildfires

One of the reasons of this high increase in monthly electric and gas bills is due to PG&E’s initiative to reduce catastrophic wildfires. PG&E’s equipment has triggered numerous disastrous wildfires in Northern California for the past several years.

“A large driver of the January 1, 2022, rate change is for grid safety, reliability and resilience investments and upgrades, including work to reduce wildfire risk,” Doherty said.

High Energy Market Commodity Prices

Another factor of the electric and gas bill increase is that energy markets are increasing the commodity prices of electricity and natural gas.

“Natural gas commodity prices for this winter are currently double the prices seen last winter,” Doherty said. “Since market electricity prices are driven by the cost of natural gas, a similar increase in the cost of electricity in California’s power markets is happening.”

According to PG&E, electricity and natural gas commodity prices are expected to continue rising well into 2022.

How Much Are You Over-Paying Now?

Let’s take a look at how a monthly electric and gas bill has changed for an average PG&E customer in January 2022 compared to December 2021 bill:

• Combined electricity and gas bills are due to average $221, compared with the prior average bill of $202 (an increase of $19 or 9.4%).
• Electricity bills have increased to total average $152 a month, compared with the December 2021 average bill of $140 (an increase of $12 or 8.6%).
• Gas bills are expected to total $69 a month, compared with the previous cost of $62 (an increase of $7 or 11.3%).

According to PG&E, besides the annual increase in monthly electric and gas rates, utility bills might rise by an additional amount at some point in 2022, if the state Public Utilities Commission agrees and votes on this matter.

“Any associated rate changes will take place after a final decision sometime in 2022,” PG&E said.

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