OAKLAND — A less forbidding economic landscape is coming into view for PG&E customers starting in early 2025 in the form of monthly bills that are poised to be only a bit higher compared to a year ago.
A typical PG&E residential customer who receives combined electricity and natural gas services from the utility can expect to pay about $295 a month starting with their January 2025 billing cycle.
To be sure, this would be $1 higher, or 0.3% more, than the $294 a month that typical PG&E residential customers were paying for combined electricity and gas services in January 2024. But it’s also a dramatic turnaround from the mammoth increases ratepayers had to endure in recent years.
The average $294 a month for combined utility services that typical residential customers paid in January 2024 was a whopping 28% higher than the $173 that customers were paying in January 2023.
“We are seeing decreases in electricity but increases in gas,” Benjamin Kolnowski, a PG&E director of electricity rates, said during the conference call.
Here is how PG&E customers will arrive at the average $295 a month for combined electric and gas bills:
— Electric bills are expected to average $211 a month for residential customers in January 2025, which would be down $11 from the $222 a month electric bill for January 2024.
— Gas bills are slated to average $84 a month in January 2025, up $12 from the average gas bill of $72 a month for typical residential customers.
In April 2024, PG&E’s top boss suggested that the utility’s beleaguered ratepayers may see monthly utility bills flatten out and someday even fall below their current levels.
In recent years, PG&E customers have seen monthly bills surge dramatically. But the utility titan is looking at ways to curb the increases, according to PG&E Chief Executive Officer Patricia Poppe.
“We see a future where customers’ bills can start to come down,” Poppe said in response to questions from this news organization about fast-rising ratepayer costs, after a PG&E-hosted event in Richmond.
The first glimmers of that future may be starting to materialize with the monthly bill cycles for PG&E customers starting in January 2025.
Oakland-based PG&E is also betting that some costs that are now in the rate base will no longer be charged to customers by the end of 2025.
PG&E customers won’t have to keep paying for expenses related to prior wildfire prevention and storm responses. These components will vanish from the customer rate base in March and September of 2025. The potential savings could be $1.15 billion.
Plus, ratepayers are also expected to see ongoing reductions in real estate costs as PG&E attempts to reduce its corporate footprint and requires less office space.
PG&E’s shrinking space requirements are exemplified in part by the utility’s decision to exit its San Francisco headquarters campus, sell that complex of buildings, and then occupy and eventually buy an office tower in downtown Oakland.
The utility also hopes to save money through alternative sources of insurance as well as low-cost financing.
PG&E recently landed a federal energy loan guarantee that would enable PG&E to scout for relatively inexpensive sources of financing for loans.
The utility is convinced it will be able to keep annual increases in monthly bills close to the overall increase in inflation as measured by the consumer price index. If the estimates for monthly bills hold true, PG&E would have achieved this outcome.
This would be in stark constrast to the bill increases of recent years, which hopped higher at a pace that was about seven or eight times greater than the Bay Area inflation rate that equated to a roughly 3% toi 4% increase.
“Affordability is top of mind” for California political leaders and PG&E, Lynsey Paulo, a PG&E spokesperson said during a conference call to discuss the billing changes. Paulo provided the estimates for the new combined bill levels.
