Aug 17 2014

Pacific Gas and Electric Rate Increase Approved

Increases will be 4.57 % in 2015 and 5 % in 2016.

The California Public Utilities Commission (CPUC ) unanimously approved Pacific Gas and Electric’s (PG&E) request for increased rates. PG&E rates for all customers will increase 4.57 percent in 2015 and 5 percent in 2016. (PG&E had asked for rate increases of 5.9 percent for 2015 and 6.1 percent for 2016.)

The initial increase begins September, 2015.  PG&E estimates the average residential customer who pays $129 per month for its gas and electricity bill will see an increased charge of $7.50 per month next fall (2015).

PG&E service area covers over a 70,000 square mile area stretching from Eureka to Bakersfield with 15 million people.

CPUC released the following statement on the increase:

“After reviewing the findings of independent safety consultants and others, the CPUC adopted revenue requirements that balance the priorities of safety and reliability with just and reasonable rates. PG&E requested a 17.5 percent increase ($1.16 billion) over the currently approved revenue requirement for 2014-2016. The CPUC reduced PG&E’s revenue increase request by $700 million, authorizing an increase of $460 million, which is an increase of 6.9 percent over the currently authorized revenue requirement. The decision approved attrition increases of 4.57 percent for 2015 and 5 percent for 2016. PG&E requested attrition increases of 5.9 percent for 2015 and 6.1 percent for 2016.

Rate cases for PG&E are conducted in three-year cycles. For the first time in a rate case the CPUC retained outside experts to evaluate risk assessment, risk mitigation, programs and policies, as well as PG&E’s corporate policies, goals, culture, and the efforts being made to bolster PG&E’s system safety and reliability. The findings of the consultants, along with those of the CPUC’s Office of Ratepayer Advocates, TURN, and other intervenors were important factors in determining the appropriate level of funding to authorize.

Today’s decision authorized programs to increase the safe operation of PG&E’s system in a cost-effective manner and hold PG&E accountable for the safe operation of its system. The programs focus on infrastructure upgrades and improvements and include the creation of a Gas Distribution Control Center to provide real-time visibility and remote control of dynamic gas pressure and flows within PG&E’s system; tools to meet a superior standard of safety in detection and repair of gas distribution pipeline hazardous leaks; the acceleration of the replacement of aging distribution pipeline; tools to reduce electric outages and mitigate wildfire risk; and the replacement of poles previously scheduled for replacement in prior years (a reduction was adopted, however, to assign a share of responsibility to PG&E shareholders, rather than ratepayers, for pole replacement deferrals previously funded by ratepayers).

The CPUC’s decision also includes requirements and rate-making mechanisms that will increase the accountability of PG&E and help ensure that PG&E is using the increased revenues prudently and effectively, as well as several requirements that will improve the showing on safety and risk in PG&E’s next rate case.”

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