Pacific Gas and Electric Co. (PG&E) has submitted a request to California regulators seeking approval to raise its rates. This move is intended to ensure that investors are adequately compensated for the various business risks the company faces. PG&E attributes the need for this rate increase to several factors, including inflation, supply chain disruptions, decisions made by the federal government, extreme weather events, and the potential liability for damages caused by its equipment.
The utility company aims to align investor compensation with that of other companies encountering similar risk levels across the nation. If the proposed rate increase is approved, residential customer bills could see an increase of approximately $5.50 per month, effective from January 1, 2026. This request comes on the heels of six rate increases that were sanctioned by the California Public Utilities Commission in 2024.
In 2024, PG&E reported record profits of $2.47 billion, surpassing its previous record from 2023. The company highlights that it pays the lowest dividend within its industry and that an independent expert has deemed its proposed 11.3% return on equity investment as reasonable. Furthermore, PG&E reinvests 97% of its earnings back into the company. The proposed return on equity investment represents a one-percentage-point increase from the current cap.
PG&E predicts that average annual bill increases will range between 2% and 4% through to 2026.
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