Annual bill increases are expected to be limited to between 2 percent and 4 percent through 2026.
Some Californians could see an increase in their monthly gas and electric bills next year if the state grants a request filed on March 20 by Pacific Gas and Electric (PG&E).
The Oakland-based utility, which serves about 16 million people in northern and central California with natural gas and electricity, submitted the increase request to the state’s Public Utilities Commission (CPUC).
PG&E and other utilities are required to file an application every three years to establish their companies’ financial returns for those who provide capital for essential energy system improvements, such as wildfire mitigation and other projects.
“Investors expect to be compensated for the risk they take when providing that funding,” PG&E wrote in a statement Thursday.
The company’s current risks include inflation, supply chain disruptions that can impact prices and interest rates, recent federal actions that impact costs, and the impact of extreme weather events, according to the utility.
The company also faces financial risk with California’s policy of “inverse condemnation” that makes utilities strictly liable for damages caused by their equipment, PG&E reported.
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The utility proposes an 11.3 percent return on investment.
If approved, PG&E’s proposal would cause residential customer bills to increase by around $5.50 per month starting no earlier than Jan. 1, 2026, reflecting the higher interest rate environment, according to the utility.
Annual bill increases are expected to be limited to between 2 percent and 4 percent through 2026.
The utility reported a record-breaking profit of $2.47 billion in 2024 after the CPUC approved four rate increases last year.
PG&E requested last year’s increases to pay for wildfire mitigation and catastrophic event costs after destructive winter storms in late 2022 and early 2023.
A PG&E contractor works on utility poles along Highway 128 near Geyserville, Calif., on Oct. 31, 2019. Philip Pacheco/AFP via Getty Images
The company also reported an operating cash flow of $8 billion in 2024, up from $4.7 billion in 2023.
The CPUC did not return a request for information about PG&E’s application Friday.
Southern California Gas Company (SoCal Gas) customers also saw increased rates starting Feb. 1 after the utility received state approval to hike rates for its 21.1 million natural gas customers in Southern California.
A typical SoCal Gas residential natural gas customer was expected to see an increase of about $7.93, or 12 percent, compared to their peak monthly January 2025 gas bill.
The average residential customer enrolled in the California Alternate Rates for Energy (CARE) program can expect an increase of about $4.35, or 11 percent, compared to their peak winter January 2025 gas bill, according to the company. Low-income customers enrolled in the program are offered a 20 percent discount on their natural gas bills.
