‘A Christmas without lights?’ Families struggle to pay bills as California regulators consider electric rate increases

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Update: On Nov. 16, the state Public Utilities Commission approved a rate hike for Pacific Gas & Electric that will increase residential rates by a monthly average of $22.20 for electric-only customers.

Angelica Vásquez’s anxiety soared when she read the notice on her most recent electric bill: “Please pay $135.81 by 10/26 to avoid service termination.” 

But the warning was part of a bigger problem. Vásquez owed a total of $400.68 to Pacific Gas & Electric Co.

For the past four months, the 43-year-old Salvadoran immigrant has been on disability leave from her job at Tesla due to a shoulder injury, she said. Vásquez also has not been able to do her second job, a part-time job cleaning houses to help pay the $3,000 monthly rent on the San Leandro house she shares with her husband, two daughters and two grandchildren.

In the early hours of Nov. 9, Vásquez wanted to warm up the house for her grandchildren, who needed to shower and get ready for school. But there was no power. Vásquez said she immediately called PG&E and explained that she had no money. 

The utility giant didn’t offer much help, she said. 

“We had to borrow money,” Vásquez added, recounting the day her family remained without power until 11 p.m. “Our food went to waste, so we didn’t have lunch and dinner that day. There’s medicine in the fridge that no longer works.” 

Vásquez is one of millions of residents across the state that has seen significant increases in their electric bills in recent years, adding to their cost of living. And the bills for PG&E customers could rise even higher if the California Public Utilities Commission approves a rate increase on Thursday.

The Oakland-based utility is seeking a 26% rate hike effective Jan. 1, though one utilities commissioner is suggesting a 9% increase. 

According to the last electric rate report by the commission’s Public Advocates Office, PG&E rates went up by 92% from January 2014 to this September. 

‘We can’t afford to stay’

Gov. Gavin Newsom appoints all five commissioners to the Public Utilities Commission, who are confirmed by the state Senate for staggered six-year terms. 

State regulators require PG&E and other investor-owned utilities to file an application to review their  revenues and expenses in order to establish reasonable rates. In its latest application, PG&E requested an increase in power bills to bolster the safety and reliability of its electric services. The utility also cited inflation and investments in underground electric lines designed to decrease wildfire risk to justify the higher fees.

In Thursday’s decision, PG&E wants $15.4 billion in additional rate revenue for 2023, a 26% jump from the year before. But state regulators responded with a proposed decision of $13.8 billion and Commissioner John Reynolds’ alternative of $13.3 billion — 13% and 9% increases from 2022, respectively. The commission is meeting in El Centro, not at its San Francisco headquarters.

“We are working to keep customer cost increases at or below assumed inflation for the long-term, between an average of 2 and 4% a year. We reduced our operating costs by 3% in 2022,” PG&E said in a statement to CalMatters. 

California residential electricity prices are already more than twice the national average, according to the report by the Public Advocates Office.

Republican state Sen. Brian Dahle, vice chairperson of the Energy, Utilities and Communications Committee, said his office receives many calls from people complaining about electric bills. 

“People that are barely making it, people on disability, you name it,” Dahle told CalMatters. “We get those calls and they’re like, ‘We can’t afford to stay,’ and it’s heartbreaking.” 

“The more money PG&E spends, the more they make and that’s not right. We need to make sure that we’re holding them accountable, that we are getting the projects completed with the minimum amount of cost.” 

Dahle’s district encompasses 11 counties in Northern California, including the most impacted by recent wildfires. The same state regulators that will vote on PG&E’s proposed increases are also considering a $45 million penalty against the utility company in connection with the Dixie Fire, the second-largest wildfire in state history that began in Butte County in 2021. 

PG&E said it is constructing underground power lines in order to prevent wildfires and protect customers. Underground power lines, the utility giant argues, reduces the risk of electrical-triggered wildfires by 98%, but a cost to customers of $3.40 a month from 2023 to 2026.

As of Oct. 30, 197 miles of 350 power lines PG&E plans to underground this year have been activated so far. That tops the 180 miles of underground lines in 2022 and the 73 miles in 2021.

Wildfire mitigation is not the only driver of the rate increases, according to the latest report by the Public Advocates Office, created in 1984 to represent the interest of utility customers. 

“Transmission and distribution investments are a second factor. That means replacing poles and wires with more modern equipment because certain new technologies can reduce the risks of sparking ignitions,” said Justin Ong, a chief policy adviser at the office.

The third reason for rate changes is rooftop solar incentives. In an analysis published in Oct. 2022, the office found that the cost shift from rooftop solar to nonparticipating customers increased from $3.4 billion to $4.6 billion from 2021 to 2022. Ong added that when rooftop solar owners offset a portion or the totality of their share of costs, customers without rooftop solar disproportionately pay more. 

Keeping the power on for poor families

The quarterly rate report also noted that the average monthly bill increased by $52 for PG&E customers from January 2021 to September. Overall, low-income households are the most impacted by higher rates and bills.

According to a PG&E monthly disconnect data report, 19,439 PG&E customers were disconnected for non-payment in September. Of the 5.6 million residential accounts as of September, nearly 1.4 million of those accounts were enrolled in a program that gives low-income customers a 30 to 35% discount on their electric bill and a 20% discount on their natural gas bill. More than 38,000 customers were enrolled in another program for families with slightly higher incomes that offers an 18% discount on their electric bill. 

When asked to comment on PG&E’s proposed increase, Ong said he couldn’t provide details on the matter. 

However, he added: “There’s no silver bullet to solving our rate crisis. A lot of our investments in utility investments are like a mortgage. Once they’re made, they’re spread out over decades. We’re trying to develop solutions to really lessen the energy burden on households, in particular the lowest income households.” 

Ten miles south from PG&E’s headquarters, Vásquez sat near the corner of her living room where a tall lamp illuminated her face as her two grandchildren slept nearby on the couch.

Vásquez said both children are excited for Christmas, but she’s worried about money. She will soon return to Tesla and will work with her daughters cleaning houses. 

Though her husband’s job as a construction worker helps cover most basic utilities, it won’t be enough later this year as holiday lights add costs to the bill. 

“Am I going to tell them this is a Christmas without lights?” she asked, gazing at her grandchildren. “It’s getting harder and harder to live here.”