Consumer Federation of California

CFC, allies win total of $369 million in cuts from PG&E’s initial rate application

On February 27, an Administrative Law Judge of the California Public Utilities Commission (CPUC) issued a preliminary decision which would reduce PG&E’s proposed general increase by $230 million for residential and commercial ratepayers for 2017. Under the proposed decision, gas and electric bills will increase by $88 million statewide in 2017, or a 1.1% increase for the average ratepayer. This PG&E general rate case before the CPUC is separate and apart from other recent residential gas and electric restructuring rate increases covered by the news media this week.

The proposed ruling is subject to approval or modification by the members of the CPUC in April. PG&E provides gas or electric service to over five million California households.

The amount does not include an additional $138 million in reductions that PG&E retracted from its original rate hike application. After scrutiny by the Consumer Federation of California and other consumer groups, PG&E acknowledged errors in its projected costs and revised downward its rate application before the CPUC. The total cuts from PG&E’s initial application add up to $369 million. PG&E’s original application would have increased rates by 5.8% in 2017.

“This is an overdue win for PG&E’s customers who have been burdened by big increases in their gas and electric bills this winter,” stated Richard Holober, Executive Director of the Consumer Federation of California (CFC).

Background

In 2015, PG&E applied to the CPUC for an across the board rate hike totaling $1.262 billion for 2017 through 2019, or a 16% increase over 2016 rates.

The Consumer Federation of California and several other consumer and environmental groups intervened in the CPUC’s review of the rate application. CFC and our allies disputed the utility’s cost projections, arguing that increases the utility claimed it required for several line items were overstated by hundreds of millions of dollars. CFC and other consumer groups also argued that the bulk of any rate increases should be postponed to the second and third year, to keep utility costs more in line with income growth.

The ALJ’s proposed decision would increase PG&E rates by 1.1% in 2017, 5.5% in 2018, and 4.3% in 2019.

The Consumer Federation of California was represented in the PG&E rate case by its Regulatory Attorney Nicole Johnson and Economist Tony Roberts. The ALJ’s decision is posted at: http://docs.cpuc.ca.gov/SearchRes.aspx?docformat=ALL&docid=176948581