PG&E Requests Rate Increase to Fund Undergrounding

California-based PG&E has requested a rate increase in its continuing efforts to shore up its grid and improve customer reliability.  As you likely know, California and PG&E’s service territory in particular have been getting decimated by wildfire activity year after year for a long time now.  The higher rates are needed to help execute one key component of the company’s wildfire mitigation efforts – burying its lines underground.

What the Rate Increase Means for PG&E and Its Customers

The overall revenue increase the utility is requesting is just over $10 billion, which would increase customer bills by about $31 a month on average.  PG&E plans to use the $10 billion to move 3,600 miles of overhead power lines underground by 2026, a component of the company’s Wildfire Mitigation Plan that aims to underground 10,000 miles of lines overall.

Of course, customers, including the consumer group Utility Reform Network, aren’t taking too kindly to the rate increase request.  And to be honest, I can’t blame them, as customers have experienced 2 rate hikes just in the first four months of 2022.

That said, I don’t see how PG&E has much of a choice here.  The company desperately needs to reduce the impact of wildfire activity across its service territory, and undergrounding seems like the best approach for doing so.  Unfortunately, it’s an expensive process, but it has to be done and as a regulated utility, customers have to pay for it.  That’s just the way it works, folks.

Plus, the company is pursuing other mitigation tactics as well.  Here are just three examples:

• Expanding the footprint under which planned outages can be executed to contain fire-triggered outages.  The shutoff program launched in 2021, covering 11,500 miles of distribution circuits, and the company plans to more than double that footprint in the coming years.
• Introducing the Enhanced Powerline Safety Settings (EPSS) program in 2021, which ensures power is automatically shut off if an object comes in contact with a distribution line, preventing ignition risk.
• Expanding the use of microgrids to enable islanding, when necessary to slow the spread of fire-triggered outages.

All in all, while no one wants a rate increase, sometimes there is no other choice.  For PG&E and its customers, this is one of those times.