OAKLAND — PG&E’s top boss says the utility can keep monthly bills flat to lower over the next few years — even though the company has asked the state to authorize it to collect more revenue from its ratepayers.
How can PG&E collect more revenue yet anticipate that monthly bills will drift lower?
The company says this is possible because PG&E has begun to rein in costs and improve efficiency to a greater degree than in years gone by.
PG&E, moreover, asserts it has a new attitude about how to serve its customers and deliver electricity, gas, repair and upgrade services to ratepayers.
“This is not the old PG&E,” Poppe said in an interview with this news organization. “This is a turnaround story in the making.”
The utility titan is asking the state Public Utilities Commission to approve additional revenue as part of the company’s general rate case, which the company files roughly every three years.
“Although there is a revenue increase, we are decreasing other costs,” Poppe said. “The other parts of the bill are coming down. We are passing along the savings to customers.”
This new proposal covers 2027 to 2030, according to PG&E.
“Based on current information, if the proposal is approved in full, PG&E expects residential combined gas and electric bills in 2027 to be flat compared to 2025 bills,” the company stated in an assessment of the new proposal.
Oakland-based PG&E predicted that the rest of 2025 will bring no further increases in electricity rates beyond what’s occurred so far this year.
Plus, the typical residential customer who receives combined electricity and gas services from PG&E should see lower bills in 2026, the utility forecasts.
“PG&E is requesting its smallest general rate case percentage increase in a decade, made possible in part by reducing costs and passing on savings to customers,” PG&E stated in a document provided by the utility.
If the general rate case impacts were the sole factor, PG&E monthly bills would rise $10.64 in 2027, $9.94 in 2028, $10.50 in 2029 and $11.08 in 2030, according to the utility. The annual average increase over the four years is 3.4%, PG&E estimated.
Other factors are in play, however, which, when they materialize, will help curb the impact from the general rate case, the utility argues.
“Our goal is to also stabilize bills through this period,” PG&E stated. “They could even go down.”
This hopeful prospect of lower bills is in the works partly because PUC decisions that authorized PG&E to recover prior costs are slated to expire and vanish from the customer rates.
The scheduled terminations of the cost recovery efforts, combined with PG&E’s push for greater efficiency and cost reductions, may help offset the revenue increases PG&E is seeking through the new general rate case, PG&E says.
Should monthly bills for the typical residential customer really stay put or even drop, that would represent a stunning turnaround from the forbidding pattern for customer costs.
Over the five years that ended in January 2025, PG&E bills have skyrocketed by an eye-popping 68.6%, which equates to an average increase of 13.7% a year.
In January 2020, PG&E monthly bills were roughly $175 a month for combined services. In January 2021, the average monthly bill rose 7.4% to $188.
The January 2022 combined bill rose another 17.6% compared with 2021, and then another 9% in January 2023 compared with 2022 for an average of $241 a month. By January 2024, monthly residential bills averaged $294, up 22% from the year before.
Monthly bills in January 2025 for customers who receive combined electric and gas service from PG&E were $295, a 0.3% increase over the one-year period.
One of PG&E’s most crucial new initiatives is to find ways to ride the technology waves that have suddenly surged into view over the horizon. The artificial intelligence industry hungers for electricity.
PG&E disclosed several customer priorities. PG&E vowed to:
— Transform and modernize its power grid to meet what’s expected to be “historic growth electricity demand” from new homes, businesses, electric vehicles and data centers that are focused on AI.
— Improve wildfire safety by replacing 760 miles of power lines with stronger poles and covered power lines, placing 307 miles of power lines underground in the highest fire-risk areas, installing an additional 114 weather stations, and improving tree trimming by bundling work.
— Increase clean energy delivery by investing in lower-cost solar and battery energy storage, installing more microgrids in remote areas, modernizing existing clean hydroelectric plants and accelerating electric vehicle adoptions that could help the cars become mobile batteries during periods of peak electricity demand.
— Strengthen the gas system by replacing 164 miles of distribution pipeline and upgrading internal pipeline inspections. PG&E will also respond to more than 600,000 calls to locate and mark gas lines.
Poppe uses a pizza analogy to describe why existing customers could benefit from the addition of new customers, especially big tech companies.
“It’s like sharing a pizza,” Poppe said. “If you have a pizza and have four people, that pizza can cost less if you have 10 people eating it. That’s less per slice.”
While an example, the pizza analogy doesn’t transfer precisely to the real world of how economic systems work, because a large economy is elastic and its size fluctuates depending on supply and demand.
Among the factors that could force costs lower:
— A $15 billion U.S. Energy Department loan guarantee that enables PG&E to borrow money at sharply lower costs than the conventional market.
— State forecasts for sharply higher energy demand. This would spread fixed grid costs, enabling lower bills.
— The state PUC’s penchant for not giving PG&E all of its requests related to general rate cases.
Over the last three years, PG&E says it slashed operating costs and capital expenses by $2.5 billion.
Despite the moving targets, Poppe is convinced PG&E will be able to transform itself, revolutionize its power grid and accommodate new and existing customers even as demand grows.
“We can do upgrades more efficiently as more and bigger customers are added,” Poppe said. “We will keep pushing and pushing to lower bills. We can lower people’s costs.”