Consumer

PG&E rate increase to start Jan 1st

Friday, December 30, 2011

Word of a rate hike coming is not popular with PG&E customers Action News spoke with.

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"Why hurt us, why hurt everybody. Don't make sense." said Randy Gaston, who had come to the PG&E office in Downtown Fresno to pay his bill.

For residential customers the electric rates will go up from $3 to $5 dollars a month. Too much for Art Tarango, another PG&E customer. "Every little bit is going to start hurting after a while, it all adds up."

The California Public Utilities Commission approved the rate increase. PG&E Spokesman Denny Boyles told Action News it's needed to cover increased costs. "It covers things like the cost of buying renewable energy, the cost of improving infrastructure, and just the cost of generating electricity."

But one of the main costs, the wholesale price of natural gas, which is burned in power plants to generate electricity, is dropping dramatically, down 40% in six months. PG&E Vice President Tom Bottorf told us by phone from company headquarters in San Francisco that these rate hikes are due to the costs of delivering the power, rather than the cost of generating the power.

"The increases are primarily associated with the cost of operating and owning the distribution and transmission system. The customers who use those facilities more tend to see the larger increases in this particular example tend to be the residential and small commercial." Bottorf said.

At the same time Bottorf says because natural gas prices are down the company's largest industrial than homes will see their utility costs drop by about 3%.

PG&E says the dropping price of natural gas kept them from raising residential electrical rates even higher. The rate customers pay for natural gas to heat their homes is actually dropping, but only by about 30 to 50 cents a month.

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In a press release issued on Friday, PG&E announced that its customers would see a flat to moderate increase in gas and electric rates.

The company said the rate increase is being held under the rate of inflation. It says the rate increase is necessary to cover the cost of buying energy, investing in new plants and equipment, and paying for state mandates such as special programs to help low income customers.

PG&E says the average electrical rates will increase 2.4 percent over December 2011 and gas rates will increase 1.8 percent over December 2011.

The company said the rate increases are lower than the trend for all U.S. consumer prices. "Although electric and gas rates fluctuate from year to year, we have managed to keep them below the rate of inflation over the past five years," said Tom Bottorff, Senior Vice President of Regulatory Relations for PG&E.

According to PG&E, the electric and gas rates have not been affected by costs stemming from the San Bruno gas pipe explosion, but the rate change will provide revenue to repair or replace aging infrastructure and invest in clean energy.

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pg&e, consumer, gene haagenson
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