PG&E Corp. won permission to hike rates by 11% this year with more increases through 2026 as it seeks to bury power lines and reduce the risk of devastating wildfires.
The utility giant will be allowed to collect $13.5 billion from customers in 2023 compared to $12.2 billion in 2022, according to a decision Thursday by the California Public Utilities Commission. PG&E also can boost rates by 5.3% in 2024, 2.5% in 2025 and 1.4% in 2026 for an overall total revenue increase of $221 million from 2023 to 2026.
The increases come at a time when California consumers already pay some of the highest electricity rates in the nation. The average monthly bill for PG&E residential customers has jumped 92% over the past decade, according to a recent report by the California Public Advocate Office.
PG&E managed to convince the commission to increase its spending after lobbying by Chief Executive Officer Patti Poppe and other executives. Poppe told Bloomberg News last month that putting lines underground offers the greatest reduction of fire risk while reducing the ongoing costs of trimming trees around power lines.
The utility had proposed investing $5.9 billion over four years to bury 2,000 miles (3,219 kilometers) of line. Earlier proposals from the commission allowed for less than half that amount. However, the final decision lets PG&E underground 1,230 miles and place protective covering on another 778 miles at a cost of $4.7 billion.
Read More: PG&E CEO Set to Make Last-Ditch Pitch to Bury Power Lines
Policymakers, environmental and consumer groups have warned the state’s rising electric rates risks undermining California’s effort to electrify cars, appliances and buildings to combat climate change.
The commission said in its decision that it needed to balance customer affordability with investments needed to maintain safety and reliability.
For its part, PG&E has been working to restore its reputation and financial health since it was forced to file bankruptcy in 2019 after sparking some of the worst wildfires in California history.
Executives said during the company’s third-quarter earnings call that an adverse rate decision could jeopardize its efforts to restore its credit metrics to investment grade. PG&E also said it will announce the timing of the restoration of its dividend after the decision on its rate case.
