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AARP Files Challenge to PG&E’s Proposed Rate Increases

Electric Meter
Close-up of electric meter face showing kilowatt hours.
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AARP has filed testimony with the California Public Utilities Commission (CPUC) in response to a four-year rate plan submitted by Pacific Gas & Electric (PG&E). Starting with an 18% increase in 2023 for both electric and gas service, this is PG&E’s biggest rate increase in decades and follows a 9% rate increase imposed upon PG&E customers earlier this year. If approved, by 2026, customers would see their energy bills skyrocket: a 39.25% increase over 2021 for electric rates, and a 56.9% increase for gas rates.

As a formal intervenor in the rate case, AARP hired experts from the Wired Group to review the spending increases proposed by PG&E. These experts reviewed the benefits and risk reductions expected from the proposals and compared them to the proposals’ projected costs. They found that certain PG&E capital spending proposals in gas and electric infrastructure would cost customers more than the benefits customers would receive from that spending. AARP has identified cost-ineffective and inappropriate spending which, if eliminated as AARP recommends, will reduce PG&E's requested $3.76 billion 2023-2026 rate increase by 92%, down to $280 million.

“It’s time for PG&E to live up to its responsibility to improve wildfire safety without placing an even heavier burden on its customers, who already pay some of the highest rates in the nation,” said AARP California State Director Nancy McPherson.

In its proposals, PG&E has asked the CPUC to authorize $10 billion in spending to bury or “underground” 3,600 miles of power lines between 2023 and 2026, which equals about $3 million per mile. Undergrounding is much more expensive than overhead lines, and, given that high fire threat districts (HFTDs) are largely rural, it is not uncommon for only one customer per mile to be served by such lines, making undergrounding a poor economic choice, since safety could be improved in less costly ways.

AARP estimates the average cost to underground the first 10,000 miles of power lines in HFTDs to be $68,000 per rural HFTD, customer not including the cost to underground the remaining 15,000 miles of HFTD power lines. Such spending is not only economically irresponsible, it is also a type of capital spending, which allows PG&E to increase its profits. This means that PG&E has a financial incentive to choose this most expensive option, regardless of whether its customers benefit.

To read the full testimony, click the link BELOW.


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