About Your Energy Bill: What’s Ahead and How to Lower Your Energy Costs

PG&E plans substantial investments in its energy system in coming years to pay for permanent wildfire risk reduction, critical gas and electric safety and reliability work, and capacity upgrades to support new business connections and California’s bold clean energy goals.

The cost of some of these investments will appear in customers’ bills beginning Jan. 1, 2024, along with other rate changes approved by regulators-- including rates that account for lower natural gas prices compared to last winter. January gas bills are forecast to be about 9% lower, reducing the typical customer gas bill by about $17.

PG&E wants to help customers understand why their bills will change, how we’re working every day to keep bills as low as possible, and how customers can reduce their costs.

PG&E is saving costs for customers through:

• Improving standard work practices
• Adding quality controls and efficiencies
• Seeking nontraditional sources of financing to reduce borrowing costs

We’re also committed to helping our customers save energy and money by helping them find their best rate plan, sharing ideas on using less energy and offering financial assistance programs to income-eligible customers, including an expanded bill support program.

“The investments we plan in 2024 and beyond focus on three goals: Keeping our energy system safe and reliable for our customers, meeting growing energy demand and adding even more renewables to our energy mix,” said Carla Peterman, PG&E Corporation Executive Vice President, Corporate Affairs and Chief Sustainability Officer. “At the same time, we’re aggressively focused on finding new ways to work so that we can keep future bill increases at or below a broader, long-term inflation rate of 2% to 4%.”

For the typical non-California Alternate Rates for Energy (CARE) residential combined gas and electric use customer who receives both energy supply and delivery from PG&E, monthly bills will increase by about 13% or about $34.50 compared to current bills.

For the typical CARE residential combined use customer, monthly bills will increase by approximately 12% or $20.

Investments support safety, clean energy

Following California Public Utilities Commission (CPUC) approval in November, PG&E’s 2023-2026 General Rate Case (GRC) goes into effect in January. Energy rates reflect the actual costs of continuing to provide safe and reliable service to customers. More than 85% of PG&E’s proposed increase targeted risk reductions in gas and electric operations, including:

• Undergrounding 1,230 miles of powerlines in PG&E’s highest fire-risk areas. It’s one of PG&E’s multiple layers of protection that have reduced wildfire risk from company equipment by 94%.[1]
• Replacing 139 miles and 24 miles of plastic and steel distribution gas pipeline respectively.
• Deploying state-of-the-art tools to inspect gas transmission pipelines and use advanced mobile leak detection technology to quickly find and fix gas leaks.
• Performing grid work to support adoption of electric vehicles and bolster resiliency during extreme weather and peak energy demand.

“Our GRC prioritizes safety above all else, with its emphasis on undergrounding and installing stronger poles and covered powerlines,” Peterman said. “At the same time, this funding ensures we can deliver a cleaner, decarbonized electric system that supports California’s clean energy transition and air quality goals to build a better future for our customers and for California.”

The GRC is the largest share of the January rate change. Over three years, the GRC will increase non-CARE monthly combined bills by 3.6% on average.

In addition to the GRC, other rate changes will be implemented as part of annual rate adjustments called true-ups. These adjustments go through a transparent regulatory approval process to ensure that dollars collected from customers are just and reasonable, and reflect the changing cost of energy purchased for customers.

PG&E does not control market prices for gas and electricity and, like other utilities, does not mark up the cost of gas and electricity that it buys for customers. State regulations require PG&E to adjust electricity and gas rates to return over-collected revenue or cover under-collected revenue.

A mild winter—so far

Weather drives winter gas and electric bills in two ways:

• Energy use rises as customers need more gas and electricity to warm their homes
• That rising demand causes higher market prices for natural gas

So far, the weather is giving customers a break compared to winter 2022-2023, when regional temperatures fell below average and gas prices in the western U.S. spiked 90 percent year over year.

Since the heating season’s November start, temperatures across PG&E’s service area have been warmer than in November 2022, said PG&E meteorologist Ted Schlaepfer. PG&E’s six-city gas-temperature composite, which surveys temperatures in Sacramento, San Jose, Oakland, Fresno, Redding and Salinas, is running about five degrees higher than a year ago.

Looking ahead, Schlaepfer forecasts slightly above-average temperatures during peak winter from December through February.

However, weather “wild cards” could affect temperatures beyond the forecast, Schlaepfer said.

A dry winter could mean lower temperatures, as fewer clouds lead to colder nights. Plus, the service area is overdue for a “polar vortex”—an intense cold wave in which a high-pressure ridge over Alaska and northern Canada pushes Arctic air into the lower United States.

The likeliest window for cold snaps is mid-December through mid-February.

Regardless of the weather, PG&E has a plan to provide energy at the lowest possible cost to its customers.

Keeping bills as low as possible

The company takes a number of actions to reduce the effects of volatile natural gas prices on customers’ winter bills.

“Our customers are at the center of what we do,” said Gillian Clegg, PG&E Vice President, Energy Policy and Procurement. “We know that every dollar we spend buying energy goes on someone’s bill. All the tools we use are designed to ensure that we have a reliable supply of energy that’s also the most affordable supply we can obtain in the marketplace.”

These measures helped PG&E save over $1 billion for customers last winter, and include:

• Maintaining pipeline access to gas production basins in Canada, the Rocky Mountains and the Southwest United States. That diverse supply helps the company meet reliability standards and tap into the lowest-cost sources.
• Purchasing and storing gas when prices are lower, such as summer, for use when demand jumps. PG&E gas storage fields such as McDonald Island in San Joaquin County help the company maintain gas reliability and lower, more stable prices throughout the year.
• Using its financial hedging program to protect residential and small-business customers from price increases. Hedging works like insurance: PG&E pays a small premium to buy hedges that cover some expected winter demand for gas. If prices settle above a predetermined level, PG&E receives a payment to lower customers’ rates and bills.

Investments in PG&E’s GRC will also reduce long-term costs to customers.

Undergrounding powerlines in high-fire risk areas, for example, will mean less future spending on vegetation management and other operations and maintenance expenses.

Through improved standard work practices and quality controls, PG&E has:

• Saved $300 million in vegetation management expenses in 2023 alone while meeting compliance and customer commitments
• Reduced undergrounding costs by $70 million through design improvements and innovations and efficiencies in construction

We’ve also worked with customer advocates on an alternative to commercial insurance to save our customers up to $1.8 billion over the next four years.

And we’re looking at nontraditional financing including lower-cost U.S. Department of Energy loans to reduce borrowing costs by hundreds of millions of dollars over the life of the loans.

Those efforts are designed to help keep customers’ bills within overall inflation rates in coming years.

Customers can take action

A few simple steps can help customers reduce energy use and limit monthly bills:

Set thermostat and water heater for savings. Dialing down your thermostat to 68 degrees (health permitting) can save you about $35 a year. Set your water heater thermostat at 120 degrees or lower to reduce energy used to produce and maintain hot water. The change can save you more than $400 a year when factoring in water demand for showers, laundry and dishwashing.

Improve home energy efficiency. PG&E offers energy efficiency programs and services to help customers save. The Home Energy Checkup estimates what uses energy in the home and suggests improvements. Free service HomeIntel provides in-depth analysis of energy use and offers recommendations to reduce use.

Enroll in Budget Billing. This program uses participating customers’ energy-use history to balance energy bills across the year for predictable monthly payments. PG&E averages annual bill totals over 12 months to avoid seasonal spikes in bills.

PG&E also offers rebates and incentives, as well as other energy-saving tips, to help customers conserve.

Customers should also check if they qualify for bill assistance, including:

• California Alternate Rates for Energy (CARE), which provides a monthly discount of 20% or more on gas and electricity
• Family Electric Rate Assistance (FERA), which provides a monthly discount of 18% on electricity for households of three or more people
• Arrearage Management Plan, a debt forgiveness plan for eligible residential customers who may have experienced pandemic-related hardship

Additionally in 2024, PG&E will make a significant contribution to the REACH program, with record funding to help income-eligible households. Expanded bill assistance details will be shared early next year.

As part of our commitment to transparency, PG&E will continue to keep customers informed about rate changes and other factors that affect the cost of energy service, and how those changes affect bills. We look forward to working with our regulator, customer advocates and other stakeholders on ways to deliver our service at the lowest-possible cost.

[1] Based on the methodology established by the CPUC in the Safety Model Assessment Proceeding and implemented by PG&E, accordingly.