After higher-than-normal natural gas market prices drove up energy bills last winter, PG&E customers can expect the reverse trend in June and July: lower-than-normal natural gas bills.
Compared to June and July 2022, the average residential gas bill is expected to decrease by a third due to lower market prices and delivery costs.
PG&E does not control market prices for gas and electricity, and like other utilities, does not mark up the costs of gas and electricity that it purchases on behalf of its customers. The market price PG&E pays for natural gas to serve customers fluctuates with the market.
Summer bills forecast; winter rain, snow increase hydropower
While gas bills are expected to decrease this summer, electricity bills likely will increase as customers use more electricity during the warmer summer months to cool their homes and businesses. For a typical customer, the air conditioner accounts for about 40% of their summer electricity bills.
However, customers’ A/C units may get a bit of break this summer. PG&E meteorologists are forecasting a cooler summer than last year as a result of the La Niña weather pattern transitioning to El Niño in the summer and fall.
“This summer is expected to be cooler compared to summer 2022, which was above normal in almost all locations,” said PG&E meteorologist Ted Schlaepfer. “This summer may be the coolest since 2011 or 2012.”
This past winter, La Niña brought higher-than-normal precipitation statewide, as well as a snowpack that tied 1952 as the largest on record as of April; the Southern Sierra recorded its biggest snowpack ever.
The rain and snow totals are good news for hydropower generation. Clean hydropower reduces the demand for natural gas to generate electricity, which reduces greenhouse gas emissions, and it costs less than many sources of electricity.
Electricity supply costs are forecasted a year in advance, so cost-savings from the large hydro year will affect customers’ bills in 2024.
Ways to save energy, money
PG&E is committed to helping all customers save money by working with them to find the best rate plan for their home or business, and sharing no- and low-cost actions to help reduce summer energy usage and manage their monthly bills. For example, customers can take these steps toward better energy efficiency in the summer:
- Identify sources of wasted energy in your home and get a personalized savings plan to lower monthly bills in five minutes with a Home Energy Checkup.
- Install an airtight A/C; replace air filters monthly to improve energy efficiency and reduce costs; and use shade coverings so your A/C won’t have to work so hard to cool your home.
- Block heat by keeping blinds or drapes closed on sunny days.
PG&E offers programs to help customers pay their bills including one-time assistance, longer-term assistance including monthly energy discounts through California Alternate Rates for Energy and Family Electric Rate Assistance, energy reduction and weatherization, payment arrangements and Arrearage Management Plan.
Customers also can level out monthly energy payments and offset seasonal bills with PG&E’s Budget Billing, a free tool that averages out annual energy costs to help manage bills.
Actions PG&E is taking to reduce costs
PG&E is working to reduce its own operating costs to help keep customer cost increases at or below assumed inflation for the longer-term, between 2-4% a year. The company reduced its non-fuel operating costs by 3% in 2022, and has identified more than 200 projects company-wide to further reduce costs. Examples include:
- Reducing vegetation management costs by an expected $300 million in 2023 through improved standard work practices, quality controls, and safety performance while still meeting compliance and customer commitments;
- Reducing undergrounding costs, including reducing trench depth, delivering expected cost-savings of $70 million in 2023;
- The recent sale of the company’s San Francisco headquarters, which included returning approximately $400 million net gain to customers over five years;
- Selling licensing agreements with wireless providers to attach equipment to certain transmission towers, to generate $973 million to help reduce costs for customers.
Summer rate changes
PG&E also wants customers to know about upcoming rate changes that will impact their energy bills.
In June, residential non-CARE customers who receive both their electricity supply and delivery from PG&E (non-Community Choice Aggregator and Direct Access customers) received a rate reduction of 1.8%, which will help offset a rate increase of 5.7% in July.
The California Public Utilities Commission (CPUC) recently approved the July rate change to pay for costs related to previous wildfire mitigation activities, catastrophic events such as wildfires and storms, and other activities related to safety. These costs do not include instances in which PG&E’s equipment was found to have caused a fire.
Taking into consideration the June and July electric rate changes, the electric bill for a typical residential non-CARE customer (non-CCA or DA) using 500 kilowatt hours (kWh) per month will increase from $181.10 to $187.74 compared to bills before June 1, 2023. A typical residential CARE customer’s electric bill will increase from $115.54 to $119.86. Actual impacts will vary depending on usage.
High user surcharge eliminated
Customers who previously incurred the High User Surcharge (HUS) on their electric bills will see some bill relief this summer. Most customers who paid the HUS live in hotter climates where air conditioning is needed to cool homes and businesses during summer months.
The CPUC voted to eliminate the HUS in March 2021, once utilities met certain conditions. PG&E eliminated the charge in January of this year.
General Rate Case
The CPUC also is expected to issue a Proposed Decision on PG&E’s 2023-2026 General Rate Case (GRC) this summer. Customer bills would not be impacted until after the CPUC issues and approves a final decision, which could be in the third quarter of 2023.
The GRC is how PG&E proposes critical investments needed to further reduce wildfire risk; improve safety and climate resiliency; support the continued growth of clean energy, and provide long-term cost reductions to help with energy affordability for customers.
The GRC also funds safety investments include hardening power lines and placing more powerlines underground to reduce wildfire risk; replacing gas distribution main pipeline and strength-testing or replacing gas transmission pipe; and investing in electric system capacity upgrades to support affordable housing projects, economic development and electric vehicle home charging growth.
If approved in its entirety, the monthly bill for a typical residential non-CARE (non-CCA or DA) combined gas and electric customer would increase by about $31.62 or 14.6% compared to January 2022.
As with any customer rates proposal by PG&E, investments and expenditures are subject to open and transparent public review and approval by the CPUC. The CPUC thoroughly reviews PG&E’s rates proposals, including holding public hearings throughout the service area.
PG&E strongly encourages its customers to provide feedback and participate in public hearings to help determine the energy priorities and investments that will define California’s energy future.
Cautionary statement concerning forward-looking statements
This Currents post includes forward-looking statements that are not historical facts, including statements about the beliefs, expectations, estimates, future plans and strategies of PG&E Corporation and PG&E, including but not limited to cost reductions and customer bills. These statements are based on current expectations and assumptions, which management believes are reasonable, and on information currently available to management, but are necessarily subject to various risks and uncertainties. In addition to the risk that these assumptions prove to be inaccurate, factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include factors disclosed in PG&E Corporation and PG&E’s joint Annual Report on Form 10-K for the year ended December 31, 2022, their joint Quarterly Report on Form 10-Q for the period ended March 31, 2023, and their subsequent reports filed with the Securities and Exchange Commission. PG&E Corporation and PG&E undertake no obligation to publicly update or revise any forward-looking statements, whether due to new information, future events or otherwise, except to the extent required by law
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