Pacific Gas and Electric has filed for bankruptcy and may face billions of dollars’ worth of penalties, fines and liabilities related to recent wildfires. Now, the utility says it needs another rate hike – to enhance wildfire safety and attract investors.
The company, known as PG&E, says it’s “probable” its equipment started the 2018 Camp fire, California’s deadliest and most destructive, when a power line touched nearby trees. And it has cited at least $7 billion in claims from that wildfire.
Now, the company is asking its state regulator to let it charge typical California households $22.67 more per month, starting January 1, for electricity and natural gas service. The estimate includes requests made Monday and in December to the California Public Utilities Commission.
The company says both proposed rate hikes are needed, in part, to ensure safety against wildfires. It proposes to enhance safety by, in part, installing stronger power poles, clearing branches more aggressively, installing meters that identify fallen power lines, expanding its weather station network and installing cameras in fire-threat zones.
But another part of PG&E’s proposal is drawing the ire of customers and politicians: its request to increase its return on equity, specifically to boost investors’ profits to more closely align with the risk associated with wildfires.
That company’s overall proposal was not received well by Gov. Gavin Newsom, a Democrat.
“PG&E is requesting massive increases in costs to ratepayers in order generate profits for investors – all while wildfire victims sit in bankruptcy,” Newsom’s spokesman, Nathan Click, told the Sacramento Bee on Monday. “The governor strongly believes ratepayers shouldn’t be on the hook for unnecessary increases as the state’s process plays out.”
PG&E, the nation’s biggest electricity and natural gas company, isn’t the only California electric company making this kind of request. San Diego Gas and Electric and Southern California Edison have both requested for increases in return on equity, citing investor risk because of wildfires.