PG&E seeks lower bills for big energy users

by David R. Baker Originally appearing in SF Gate Pacific Gas and Electric Co. wants customers who use a lot of electricity on hot summer days to pay a bit less next year on their monthly bills. And as a result, customers who use relatively little would pay a bit more. On Friday, the utility asked California regulators for permission to revise its rates in the coming year. If approved by the California Public Utilities Commission, the changes would bring PG&E’s electricity rates closer to the actual costs of providing service. The revised rates would not increase PG&E’s overall revenues or profits, according to the company. Instead, they would shift costs among the utility’s customers, aiding residents of California’s hot inland valleys. PG&E customers there have often complained about a rate system they say favors residents of the state’s temperate coast. “Customers want fairer, simpler rates, and this proposal takes an important step in that direction,” said Tom Bottorff, PG&E’s senior vice president for regulatory affairs. California bases electricity rates on a system of usage “tiers,” with people who use a lot of electricity paying significantly more per kilowatt-hour than those who use little. But in the 12 years since the state’s electricity crisis, the rates for the highest and lowest tiers have grown farther apart. For most of that time, state law prevented utilities from substantially increasing rates for low-usage customers. So as the utilities faced higher costs for upgrading their infrastructure and adding renewable power, the brunt fell on customers in the upper tiers. As a result, customers in the lowest tier now pay less than it costs PG&E to serve them, according to the utility. Customers in the highest tier, meanwhile, pay roughly double the cost of service. PG&E’s new proposal would cut the number of tiers from four to three. It would also lower the highest residential rate by 5 cents per kilowatt-hour. A household using 550 kilowatt-hours per month would see its average bill rise 1.2 percent, to $94.61, according to the utility. A household using 1,500 kilowatt-hours would pay 2.4 percent less than before, with its average monthly bill falling to $418.72. Friday’s proposal from PG&E, California’s largest utility, was expected. Assembly bill 327, signed by Gov. Jerry Brown in October, authorized state regulators to revise California’s rate structure. And in a press release Friday, PG&E indicated that the company would probably propose more changes for 2015.

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PG&E seeks lower bills for big energy users

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