A new utility rate hike has been proposed for November, and if it goes through it could cost grid reliant utility customers hundreds of dollars a year. If you’re a California resident, this is going to sound like something of a broken record, but PG&E is looking to raise rates to cover the cost of various initiatives, and while they haven’t figured out just how much the cost of these rate increases might be themselves, consumer advocacy groups are projecting an increase of over $300 a year on energy bills. Let’s dive into what the utility proposed rate hike is, why they want to increase your rates, and how you can avoid paying more with solar!
PG&E has proposed a rate hike to cover the expenses associated with a series of safety and efficiency projects. These expenses will translate directly into customers paying more for power. The new utility rate hike may go towards important projects, but will cost California residents hundreds of dollars annually.
What is the new utility rate hike?
So there are a few answers to this question – to start, PG&E made a proposal to the California Public Utilities Commission, or CPUC, requesting a rate increase of roughly 26%, stating that they needed the revenue to undertake several key projects that we will discuss in a moment. The CPUC countered with two proposals of their own, one for a 13% revenue increase and one for a 9% revenue increase. So, depending on which proposal is ultimately enacted, the new utility rate increase would start at 9% and could go as high as 26%.
What does that mean for you? Well, PG&E says they are still analyzing the proposals to determine the potential impact on consumer energy bills. In the meantime, consumer advocacy group The Utility Reform Network (TURN) indicated that their estimates place the rate increase at more than $300 per year. Mark Toney, Executive Director of TURN, spoke with ABC10 earlier in September. He said, “Enough is enough. There should not be rate increases above cost of inflation.” While the public will have time to respond to the new utility rate hike, it is likely that at least one of the proposed plans will be put into effect after considering them at the November 2nd meeting.
Why does the utility need a revenue increase?
Now that we understand the proposed rate increases, the question naturally becomes: why does the utility need to increase revenue? Especially since that money will come out of your pocket, it’s worth understanding what that money will be used for. Interestingly, the plans PG&E have for this money sound similar to initiatives already being undertaken by clean energy industries like solar. The big three initiatives PG&E wants to raise rates for are:
- Underground Powerlines
- Wildfire Risk Reduction
- Grid Capacity and Resilience
The biggest dispute between PG&E and the CPUC in regards to this new utility rate hike is that PG&E wants to underground as much of the powerline system as possible, in order to reduce the risk of ignition points for wildfires. This is likely due to the recent deaths in power line sparked fires, including the fatal Camp Fire of 2018. Wildfire risk reduction is an important goal, one we’ve talked about previously in regards to the benefits gained from solar in the event of wildfire outages.
Finally, with the increased instability found in our aging grid, capacity and resilience initiatives are a laudable goal, and these changes would legitimately benefit California residents. The problem is that as a paying utility customer, you are simply renting these benefits, and the cost is being passed on to you for the privilege of covering the utility from fire liabilities. These critical changes should have been made already, and the cost should not fall to the users who ultimately have no control over grid maintenance. However, there is a way to avoid the new utility rate hike, and any rate hikes that come down the pipe in the future.
How can I avoid the new utility rate hike?
With a solar installation, you can take your hard earned money and put it towards a lasting investment, rather than letting the utility raise your rent with no returns. Unlike your monthly utility bill, which is functionally endless and constantly fluctuating, your investment in a solar installation provides a reasonable and reliable monthly payment, with a finite end date! Once you’ve paid off your system, you can enjoy the value, savings, and security of a solar installation, shielding you against market fluctuations and providing resilience against outages.
With the new utility rate hike looming on the horizon, you have an opportunity to make a change in the moment that will save you thousands of dollars in the long run. Of course, if you like the idea of paying more annually for the same service you already receive, with no protection against outages and no assurance that prices will stay the same after this, then go right on ahead. Just be sure to set aside an extra $300 plus dollars a year for your energy expenses. If you’re interested in taking control of your energy costs, our expert consultants can help you get started on a solar installation before the new utility rate hike hits your bill – schedule an appointment today!
