Electric Bill Increase: Intervention or Utility Bail-Out?

In Fall 2018, California Gov. Jerry Brown signed a measure allowing California utilities, such as PG&E, to bill their customers to pay for future legal settlements stemming from the devastating 2017 California wildfires. This was signed while even larger flames continue to destroy the California landscape. Will this help or cause a electric bill increase?

Intervention or a Bail-Out? How This Creates Electric Bill Increase

The bill was written with the intention of preventing bankruptcy for PG&E. PG&E is one of California’s largest utility companies and a major bankruptcy could devastate Californian’s access to electricity. The last year has brought billions of dollars of charges against PG&E, who is being held liable if investigators find PG&E’s equipment caused the Tubbs Fire last year – which destroyed thousands of homes and killed 22 people.

Many critics are calling this bill a bail-out. The bill creates a special process for recent California fires. This process determines how much of the liability the utility company can absorb without triggering bankruptcy. What this means is that the bill will allow the Public Utilities commission to consider many factors, including weather, utility company effort to prevent fires and mismanagement – to determine if the utility company can pass the costs to consumers.

Unfortunately, PG&E has filed for Chapter 11 bankruptcy. However, business as usual is what is on the books for the utility.

Changes in Legislation

Photo Credit Auspice Safety

Courts have previously ruled that utility companies are liable for damage caused by their equipment, even if they followed all safety procedures. Utility companies have historically been required to shoulder the burden of the costs associated with fires.

New legislation changes that. New legislation means that the costs may be passed on to the consumer. If PG&E is blamed for both the 2017 and the 2018 fires, customers can expect to see a surcharge on their bill for at least the next 20 years. The total cost consumers will pay is unknown. First, we do not know which fires will be blamed on the utility company. Second, with the current fires still burning in California, we do not even know the extent of the damage.

Solar Still is Best For Consumers

From a perspective in the energy industry, this is a good reminder of why it is important to become independent from the utility company. Although there is not a direct cost that we can attribute to this newly signed bill, we can expect that there will be an increase in the cost of doing business with the utility. Now is the time to learn how solar can help you control the costs of your energy use. Plus, the added benefit of reducing greenhouse emissions can not be underestimated. Clean air – clean energy – and owning your own power is the benefit of going solar. Reach out today to learn how you can go solar today.