PG&E wants yet another rate increase.
And this time its to make sure its investors are kept whole against risks the for-profit utility may incur.
The filing Thursday with the California Public Utilities Commission pencils out to roughly $5.50 a month or $66 a year for residential customers.
In the utility’s own words, “PG&E seeks to adequately compensate investors for risks, consistent with other companies with similar risk levels across the country.”
Those risks, as outlined by PG&E, include:
*Inflation and supply chain disruption that can impact prices and interest rates.
*Recent federal government actions that could impact costs.
*Impacts from climate change such as extreme weather events.
*California’s policy of inverse condemnation that makes utilities strictly liable for damages caused by their equipment.
The application includes testimony from a third-party expert contending that based on PG&E’s risks, its proposed 11.3% return on equity investment is reasonable.
By setting the return at this level, the company is not guaranteed to recover it. This application just provides the opportunity to do so.
The Utility Reform Network (TURN) is urging the CPUC to reject the request.
“California utilities are driving an affordability crisis, with families paying billions in excessive costs while investor profits soar,” said Lee Trotman, Communications Director of TURN.
PG&E in 2024 shattered profit records for the second year in a row.
Profits hit $2.74 billion in 2024 after reaching a then record $2.02 billion in 2023 following $1.68 billion in 2022.
PG&E is currently pocketing state guaranteed profits in excess of 10.6 percent.
That has come from accumulative rate increases of 101 percent in less than five years.
TURN plans to submit formal protests next month.
A CPUC hearing on PG&E’s rate hike request is expected to take place sometime between July and October.
PG&E contends it pays the lowest dividend in the utility industry, and as a result PG&E reinvests 97% of what it earns back into the company.
To contact Dennis Wyatt, email dwyatt@mantecabulletin.com
