PG&E: We need the help of California lawmakers to keep utility costs affordable

Opinion by CARLA PETERMAN SPECIAL TO THE SACRAMENTO BEE MAY 22, 2024

We at Pacific Gas & Electric are building a better future for California and the world by delivering a safe and climate-resilient energy system at the lowest cost for our customers.

Our investments in undergrounding powerlines, replacing gas pipelines and increasing electric capacity have already paid off for our customers: Our multiple layers of protection have reduced wildfire risk from company equipment by 94%. We delivered 100% greenhouse gas-free electricity in 2023 to residential customers and businesses to whom we directly sell power. Greenhouse gas-free electricity is generated by fuel sources — such as solar and wind power, nuclear energy and hydropower — that do not release carbon dioxide, methane or other gases into the atmosphere.

And in 2023, we reinvested more than 99% of our allowed earnings back into our business and energy system.

The cost of some of these investments began appearing in customers’ bills beginning in January.

We hear what our customers are saying about recent increases in their energy bills. To ease the burden of rising energy costs, we’re focused on how we can make these and future investments at the lowest cost for our customers by reducing costs in our own operations and finding opportunities to decrease costs at the state level.

Through these strategies, we are working hard to have average bills decrease in 2025 and 2026 compared to this year even as investments in our system continue to pay off in greater safety and reliability for our customers.

In fact, we achieved operating cost savings of $510 million in 2023, in part by doing our work more efficiently.

Our efforts so far include reducing vegetation management costs by $300 million in 2023; lowering undergrounding costs through new trenching methods, saving $70 million in 2023. We also improved our new-service connection processes and served more customers while saving $24 million in costs.

But we’re not finished: We’re managing more than 150 projects system-wide to reduce materials, labor and other costs. We continue to explore dozens of other ways to reduce our operating costs and to reduce or delay costs that state regulations require us to pass on to our customers. Overall, we expect prices will rise — on average — 3% per year from 2023-2026.

However, we need the partnership of California’s lawmakers, policymakers and other stakeholders to make even greater strides in reducing customer bills.

Almost a third of what customers pay is the result of state policy. That means we need the state’s help to reduce or remove subsidies and societal costs from customers’ bills without compromising our collective progress on safety, climate change and equity.

For example, about 10% of the average residential customer’s total electric bill goes to trimming trees. That’s almost $1.8 billion a year that we could reduce by investing in climate-resilient infrastructure such as undergrounding powerlines to permanently eliminate fire risk and reduce costly annual tree trimming in high fire-risk areas.

Public purpose programs pay for important societal benefits including low-income bill discounts, energy efficiency programs and other state mandates, but they are not part of delivering energy to customers. These programs make up about 6% of customers’ bills today. Additionally, non-solar customers’ bills are 15% (or $34 a month) higher because of rooftop solar incentives.

Beyond removing these subsidies and societal costs off our customers’ bills, lawmakers and policymakers should also ensure state funding to meet climate goals, support continued financing of critical wildfire safety work through recovery bonds and continue support for a fixed charge to provide more bill transparency and predictability and lower the energy-use rate for all customers to help make electric homes and vehicles more affordable for everyone.

We want our customers to know that we are committed to continuing vital investments while reducing the financial effects of these improvements. We invite the state’s lawmakers and policymakers to join us in that effort. And we look forward to keeping our customers and stakeholders informed of our progress on reducing our costs.

Carla Peterman is PG&E’s chief sustainability officer and executive vice president of corporate affairs