Pacific Gas and Electric, or PG&E, has increased its rates for the fourth time in the last five years, and consumers in California are already beginning to see a spike in expenses.
The latest PG&E electric rate increase was announced in 2023. In February, it raised rates by 8% for residential customers in its service area. This comes after a series of hikes in 2022 that left Californians struggling to pay the bills.
This change in rates is not sudden. Several factors are thought to be responsible for the PGE price increase, including:
Safety equipment upgrades—the company says it is working to decrease wildfire risks by placing electric lines underground.
To maintain its aging infrastructure.
To pay off the debt accrued during the California energy crisis.
To offset the hefty fine it had to pay in civil penalties for the 2017 wildfires.
The rise of energy and natural gas prices.
The construction of a new gas pipeline.
Until these reasons are dealt with, rates will likely continue to rise with no end in sight.
So how do PG&E electrical rates stand to affect customers? How much is an average PG&E bill for an apartment? Let’s find out.
Following the PGE price increase in 2022, Californian consumers were already feeling the blow to their expenses.
According to estimates, residential customers saw an average increase of $14 on their electric bill each month. The average PG&E bill in 2022 went from $152 to $166, working out to a 9.2% increase. For those who had subscribed to the Customer Assistance Rates (CARE) program, the increase was $10.66 a month, on average.
PG&E commercial rates also saw a 10% bump for small businesses and an even more significant bump for industrial facilities. This all eventually added up to an average increase of 12.69% across the utility’s commercial customer base.
Following the PGE rate increase 2023, residential energy bills from November 2022 through March 2023 were projected to be 32% higher than those from the previous year. For customers who aren’t a part of the CARE program, this could mean bills could be as much as $79 higher a month, the company has indicated.
And unfortunately, it doesn’t stop there.
According to the California Public Utilities Commission projections, the average customer would have to pay 18% more for monthly electricity and gas bills in 2023 and may see a 32% increase by 2026 if the PG&E electric rate continues to soar.
As previously mentioned, the PG&E rate increase 2023 was only the latest in a series of hikes in the last few years.
Some reports have found that the PGE rate per kilowatt rose higher between 2009 and 2019 than the rate of inflation—with average residential rates going up 31%.
Then in January 2022, the utility company increased gas rates by 11% and electricity rates by 8%. And just one month later, PG&E submitted a request for another electricity rate hike of 9%.
2023’s rate hike will not be the last. In the coming years, rates are expected to continue to rise by 3% to 4% each year until at least 2026.
Meanwhile, the Los Angeles Department of Water and Power also announced adjustments in LADWP electric rates effective January 1, 2023, causing a snowball effect on the prices of utilities in the area.
Given these sudden and drastic spikes in utility rates, it’s unlikely that the average PG&E bill will stabilize in the coming years. So how are consumers expected to deal with the rising costs?
Here are some tips:
Switch to a lower plan: As the PG&E electric rate continues to rise, customers should consider switching to a more cost-effective plan. It might be worth asking yourself, what is PG&E’s lowest rate per kwh? For a Tier 1 plan, this could be as little as 34 cents during non-peak hours.
Reduce personal consumption: If you haven’t already switched all your bulbs out for LED lights and aren’t keeping the temperatures at home at moderate levels, you risk ending up with a hefty utility bill each month.
Look out for cost-saving programs: PG&E offers several programs to its customers, such as the low-income home energy assistance program and the relief for energy assistance through community help (REACH) program.
While these measures can help offset the PG&E electric rate, the best solution by far to deal with rising costs and energy requirements involves reaching out to your local solar company.
Solar energy has been rising in popularity across the United States, and for good reason.
Residential solar panel installation and commercial solar panel installation are very high in demand, as they have the potential to reduce individuals’ and businesses’ reliance on the local utility grid. Not only can solar solutions reduce the average PG&E bill, the most efficient solar panels can help you do away with your reliance on the utility company completely.
Another reason to go solar now has a lot to do with the difference between how solar panels work and the answer to how does PG&E generate electricity?
The traditional power grid relies a lot on hydroelectric power, which can be scarce in California, especially during periods of drought. Solar energy relies only on sunshine, which is never in short supply in the state all throughout the year.
Do you want to make the switch but don’t know where to start? Do you want answers to questions like how long does it take to get solar panels installed?
AMECO, with about 50 years of experience, is one of the most trusted solar companies in California. Contact us today for more information on the benefits of solar power at home and how it can help you deal with the continuous PGE price increase.