OAKLAND — PG&E customers who reckoned with a series of rate increases in 2024 can expect a respite in early 2025 as combined monthly bills are poised to be only a bit higher compared to a year ago.
A typical PG&E residential customer who receives both electricity and natural gas services from the investor-owned utility can expect to pay about $295 a month starting with their January 2025 billing cycle.
This would be $1 higher than the $294 a month that typical PG&E residential customers were paying for combined electricity and gas services in January 2024. It’s also a dramatic turnaround from the increases ratepayers had experienced in recent years.
The average that customers paid in January 2024 for combined services was 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 a conference call Monday.
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 a decrease of $11 compared to January 2024.
— Gas bills are slated to average $84 a month in January 2025, up $12 from the average gas bill a year ago.
In recent years, PG&E customers have seen monthly bills surge dramatically. But the company is looking at ways to curb increases, according to PG&E CEO Patricia Poppe.
PG&E’s top boss in April suggested that ratepayers may see monthly utility bills flatten out and someday even fall below their current levels.
“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 new monthly bill cycles for PG&E customers.
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 next year. For example, 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 overall.
Ratepayers are also expected to see ongoing reductions in real estate costs as PG&E seeks to reduce its corporate footprint.
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 it 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 estimates for monthly bills hold true, PG&E would have achieved this outcome in a stark contrast to increases which rose at a higher pace than the Bay Area inflation rate.
“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.