PG&E customers in California will see their average monthly bills go up between 1.5% and 2.7% beginning January 1st.
The higher rates come after another difficult year for PG&E. Following the aftermath of the November 2018 Paradise wildfire, which killed dozens and was found to be PG&E’s fault, the company had filed bankruptcy early in the year because of tens of billions of dollars in liability they faced.
Following that, PG&E reduced services and started preemptively shutting down power in many parts of Northern California that were a wildfire-risk. However, this only put more people at risk because of the lack of power and phone service. These actions angered so many that cities such as San Francisco and San Jose started to look for ways to not have PG&E as a power supplier. Further bankruptcy court hearings throughout the last months of the year only managed to hurt the companies perception even more.
The additional costs of bankruptcy, along with inflation and higher maintenance costs, sparked the rate increase from PG&E. And because of wildfire trouble already being projected for next year, as well as a possible fight with California in June over a state takeover of the company if they don’t emerge from bankruptcy, PG&E has already filed for at least one more price bump in 2020.
The first increase will only amount to around $3 for the average customer, but there’s no telling what other price hikes in 2020 will be.
“2020 will be a scary year for PG&E,” said Fred Clarke, a stock broker specializing in energy company stocks in New York. “They’re coming into the year in bankruptcy, and they have California threatening to take the company. They have been working on settlements, but it hasn’t been enough.”
“They came into 2019 at about $25 a share. They come into 2020 at $10 a share.”
“Now this tells you what they need to do. They need to fix a lot of things and improve maintenance – that requires money. They need all regular services, both electrical and gas, to keep going, so that requires a smidge more money because of higher prices of materials and rising wages. And you need to pay these settlements, which through insurance, can mean more money. Oh, and not to mention unexpected costs like operating more of those emergency places like what they had during the blackouts out there.”
“That’s why they’ll be going up several times this year. It’s only a few bucks per person, but multiply that by all their customers and you got the difference, or at least close to it.”
PG&E’s bankruptcy proceedings will resume in January in San Francisco. It is not known when electricity rates will go up again in 2020, but they will at least go up one more time according to filings by the company with the California Public Utilities Commission.