With the latest PG&E rate increases that took effect today, double digit energy inflation has become just the way it is in the Bay Area. Take a look at the new PG&E rates below. We are getting into Hawaii territory pretty quickly.
PG&E's new Tiered Base Plan, which takes the place of the E-1 Rate Schedule. Tier 1 rate is 20 cents per kilowatt hour. Tier 2 rate is 28 cents per kilowatt hour. Tier 3, aka the High Usage Surcharge, is 40 cents per kilowatt hour. 1 kilowatt hour is about the electricity you use to cook breakfast for a family of four.
The Tiered Base Plan is the basic plan that most homeowners will be on for the foreseeable future. PG&E eventually expects to have most of its users on time-of use schedules, where they are charged not only for how much electricity they use, but also for when they use it.
All of the PG&E rates you see above are higher than the rates they replace. All PG&E customers are seeing their bills go up, although at different rates. The highest increases are for small households, who get hit with a 10% increase on the basic rate tier, and for heavy users of PG&E electricity, who will pay more for more of the electricity they consume. If you are somewhere in the middle, with a bill around $175 per month, your bill will increase the least.
With the new rate hike that takes effect today, PG&E electric rates have increased by double digits over the last couple of years—we estimate a total increase of about 30% for most homeowners. This beats the Consumer Price Index, which has risen by 3.5% in the same period, by an order of magnitude. Here is another article on it, by the San Francisco Business Times.
PG&E is pushing hard for the inexorable rate hikes required to pay for upgrades to the utility's aging infrastructure, both on the gas and electric side. The company badly needs to get this aspect of its business under control. There are 1,500 miles of PG&E gas lines around the Bay Area. Most of this network is aging, and worse than that, it is unmapped. Simply put, another San Bruno could happen any day. It also means that PG&E has no good idea of how to structure and schedule its preventive infrastructure maintenance. It all adds up to higher business risk and insurance costs, lower stock valuations, and higher utility bills for the customers.
It will take years to make a dent in the problems that face PG&E. Homeowners who can reduce their dependency on PG&E energy, should do so sooner than later. The straightforward alternative to PG&E electricity is solar electricity. The savings are in the 50% to 70% range.
PG&E will remain a cornerstone business in the Bay Area. It just doesn't have to be that cornerstone in your world.
For a free consultation on how to save tens of thousands of dollars over the next decade, and often over six figures over the next two decades, all you have to do is to get in touch:
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