PG&E Rate Increase Of 2023: What You Need To Know

If you’re familiar with California utilities giant PG&E, you know that the company raises its rates frequently.

In fact, the company has raised rates in 2018, 2019, 2021, and now, 2023.

While this most recent rate hike is unwelcome news for PG&E customers, you don’t have to navigate it alone.

In this blog, we’ll explain everything you need to know about the most recent PG&E price increase and how to keep more money in your pocket.

Let’s start now.

Why did PG&E Raise its Rates?

On April 20, 2022, PG&E filed a document with the CPUC called the “2023 Cost of Capital Application,” officially announcing its intention to raise rates in 2023.

In February of 2023, the company made good on its promise and raised rates by 8% for residential customers in its service area.

But why? What’s the reason behind PG&E’s ongoing rate hikes?

Here are a few of the factors at play:

• Upgraded safety equipment. PG&E is upgrading its safety programs and the electrical grid to mitigate wildfire risk. Notably, the company is hardening its power lines and placing about 3,600 miles of electrical lines underground to decrease wildfire risk, among other initiatives.
• Aging infrastructure. PG&E’s infrastructure is aging, and they need to raise costs to maintain it. Some of these maintenance efforts include replacing transformers in high-rise buildings to minimize fire risk and implementing cybersecurity threat protection measures.
• Debt and civil suit payouts. The company is still trying to pay off the debt it accrued during California’s energy crisis. Additionally, PG&E was deemed liable for causing several deadly wildfires in California in 2017, and they’re still paying $1 billion in civil penalties.
• Costs associated with new gas pipeline construction. PG&E’s gas pipeline construction has been costly. In 2023, the company plans to replace 222.5 miles of distribution pipeline. PG&E is also strength testing about 174 miles of gas transmission pipe to ensure safety and reliability.
• Increasing wholesale costs. Last but not least, energy and natural gas wholesale prices are increasing, and PG&E has repeatedly raised rates to keep up.

What Does This Mean for California Residents?

The rate increase passed in February has already gone into effect for most California customers – the utility provider deployed the changes on March 1, 2023.

Since California residents already pay some of the highest utility bills in the country (PG&E customers pay about 80% more per kWh than the national average), this is bad news for PG&E customers.

Experts predict PG&E to raise its prices even more in the coming years since the company has sought approval to execute annual rate increases of 3-5% from 2024-2026.

A Brief History of PG&E Rate Increases

As we’ve mentioned, PG&E is no stranger to raising its rates. In fact, the utility company’s rates have risen faster than inflation for the past ten years.

To help paint a picture, here’s a brief breakdown of the company’s rate increase history:

• Residential rates increased 31% from 2009-2019, compared to the consumer price index of just 19%.
• At the start of 2019, the company increased electricity rates by 8% and gas by 11%. This translated to an average monthly bill increase of about 19% for customers.
• In January 2022, the company again increased electricity rates – boosting them by 8%.
• In March of 2023, the company increased rates by 8.9%, which meant that the average customer saw bill increases of about $14 per month. In January of this year, PG&E’s gas rates increased by 11%.

By our calculations, PG&E has raised the rates 5.7%-6% year over year over the past 15 years.

The writing is on the wall:

The rate increases have only just begun for customers in the PG&E service area.

In the coming years, we expect to see PG&E raise its utility rates even further and for residential customers throughout California to feel the pain of that decision in their pocketbooks.

How to Lower your PG&E Bill

Sick of going along with PG&E’s endless rate hikes? You’re not alone.

Throughout the state, California customers are looking for ways to decrease their PG&E bills and reduce dependency on the utility.

Here are a few of our top tips:

1. Go solar

Going solar is the most effective and longest-lasting way to decrease your PG&E bill.

Installing a customized solar power and battery backup system allows you to drastically reduce your PG&E bills.

Are you considering making the switch? Don’t wait!

If you sign up for solar before April 5th there is still a chance to lock in the much better NEM 2.0 program for 20 years! Learn more here.

2. Turn down your thermostat

Save a little money and reduce your environmental footprint by turning down your thermostat. According to the US Department of Energy, you can save 10% on your annual heating bill by turning your thermostat down 7-10 degrees from its standard setting for at least 8 hours daily.

3. Upgrade your lighting to LED bulbs

Did you know that swapping out your light bulbs could help you save money on your electrical bills? LED bulbs consume about 75% less energy than incandescent bulbs.

They also last up to 25 times longer!

Since lighting accounts for about 15% of the average home’s annual electricity use, using LED lighting could save the average homeowner about $225 per year in energy costs.

What Cost-Savings Programs are Available?

In addition to the energy-saving tips above, there are other ways to save money on your energy bill. PG&E offers several cost-saving programs for California customers.

Here are a few of the most popular:

• Low-Income Home Energy Assistance Program (LIHEAP). LIHEAP provides up to $1,000 in energy cost assistance for eligible households.
• Relief for Energy Assistance Through Community Help (REACH) Program. REACH provides one-off financial assistance services for qualifying customers who are past due on their PG&E bills.
• Arrearage Management Plan (AMP). AMP is designed for families who experienced financial hardships due to the COVID-19 pandemic. Eligible customers can receive a maximum of $8,000 in outstanding balance forgiveness.
• Budget Billing. In addition to the above, PG&E offers budget billing options, which average your annual energy bills to provide a predictable monthly payment. Customers can also arrange flexible payment plans with the utility provider directly.

Sandbar Solar & Electric Can Help You Break Free From PG&E

Are you sick and tired of living life on the PG&E hamster wheel? If so, now is a great time to take control of your household, lower your utility bills, or create complete energy independence.

Here at Sandbar Solar & Electric, we help PG&E customers throughout the Central Coast and San Francisco Bay Area California design and install custom solar systems, which provide peace of mind and long-term cost savings.

Are you considering installing a solar system on your home?

The best time to go solar is now – before rates increase again! Call us to explore your options and to request a free solar quote: (831) 469-8888