In This Article:
Dive Brief:
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Pacific Gas & Electric is disappointed with two competing proposals under review at the California Public Utilities Commission in its general rate case proceeding, both of which are “falling short of providing the funding to accomplish the necessary safety work we have proposed on behalf of customers,” PG&E Corp CEO Patti Poppe told analysts during the company’s earnings call Thursday.
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PG&E had filed an application with the agency requesting a $15.4 billion revenue requirement for 2023. However, a proposed decision from a CPUC administrative law judge would cut that by $1.6 billion, while an alternate proposal from the assigned commissioner on the rate case would reduce it by $2.1 billion.
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PG&E is disappointed in the proposals’ “apparent willingness to trade safety and reliability for short-term considerations,” Poppe said on Thursday’s call. The agency is set to vote on the proposals at a meeting on Nov. 2.
Dive Insight:
PG&E parent company PG&E Corp. reported third-quarter income available for common shareholders of $348 million, or 16 cents per diluted share – compared to $456 million, or 21 cents per diluted share during the same quarter last year.
This September, the CPUC issued two proposals in response to PG&E’s general rate case request which cover the utility’s operational and infrastructure costs from 2023 through 2026.
California utilities file general rate case applications with state regulators every four years, during which regulators scrutinize the revenues the utility will need for that period. PG&E’s latest application sought a $15.41 billion, $16.34 billion, $16.98 billion and $17.43 billion revenue requirement for 2023, 2024, 2025 and 2026, respectively.
Regulators noted in their proposal that the utility’s application contended that the changes were needed to ensure the safety and reliability of the grid, and that its requested costs were driven up in part by inflation, as well as “a significant investment in undergrounding electric lines.”
The utility is seeking to bury 10,000 miles of power lines in its service territory, in an attempt to reduce the risk of its infrastructure sparking wildfires. However, some stakeholders maintain that installing covered conductors, or insulated power lines, is a more cost effective technique to prevent fires.
The proposed decision would authorize a revenue requirement of $13.82 billion, effective as of Jan. 1, 2023, and revenue requirements of $14.47 billion, $14.73 billion, and $14.85 billion respectively for 2024 through 2026. The alternative, meanwhile, would authorize revenue requirements of $13.31 billion, $14.02 billion, $14.32 billion, and $14.49 billion for the four-year period.