PG&E asks California gas customers to pay more for a $26.6 million shareholder 'reward'

A request from California utility giant PG&E is not sitting well with ratepayers. The proposal aims to charge customers for a $26.6 million payout to shareholders. 

According to NBC Bay Area, PG&E says the payment is justified because its gas-buying approach reduced costs for customers.

What's happening?

In notices to customers, PG&E said that its gas purchasing from November 2022 to October 2023 generated $170 million in savings.

The company is now asking the California Public Utilities Commission to approve a shareholder incentive tied to those savings.

PG&E said in a statement cited by NBC Bay Area that the arrangement is allowed because "under CPUC rules, customers retain the majority of those savings, while shareholders may receive a performance-based incentive when procurement costs are lower than the established market benchmarks." 

If regulators sign off, the average monthly gas bill would increase by about 41 cents.

The utility says customers would still come out ahead overall, but the proposal would require households to pay more so investors can be rewarded at a time when utility bills are already straining many Californians.

A decision from the California Public Utilities Commission is not expected until sometime next year, NBC Bay Area reported.

Why does it matter?

Even a 41-cent increase can feel significant when household budgets are already stretched. 

Sixty-seven-year-old customer Janice Mercado told NBC Bay Area, "The PG&E rates keep going up and our Social Security doesn't. So it's hard to balance the budget here."

NBC Bay Area spoke with Mercado and her friend, customer Janice Henry, at a senior knitting club in Antioch that, as NBC Bay Area described it, is among the few activities they say they can still afford.

Critics say the proposal also raises a broader question of fairness. 

"Because PG&E thinks they did well and keeping it not too high, they wanna reward just for doing their job. And their job is to keep rates as low as possible." Mark Toney, executive director of The Utility Reform Network (TURN), said to NBC Bay Area. 

"If they want their shareholders to be rewarded when they underspend, then their shareholders should be held accountable when they overspend. And that's not what PG&E is asking for," Toney added.

For now, the main check on the request is the CPUC review process. Regulators will determine whether the incentive aligns with commission rules and whether it is reasonable to pass the cost on to customers.

"Why don't we get the reward?" Mercado asked, as reported by NBC Bay Area. "We've been paying bills, give it back to the people that are paying the bills."

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