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Understanding PG&E Billing and Rate Increases

Why You Need to Pay Attention to Your Energy Bill

How closely do you analyze your energy bill every month? Do you eagerly await your PG&E statement to see if your energy-saving efforts have been rewarded by a reduced bill? Or do you leave billing matters to the auto pay and scarcely scrutinize your energy payments? With the changes being made to our energy costs on almost a daily basis, it is important to give your energy bill a second look. Today, I will discuss how PG&E charges their customers and why you should understand how you are being charged for your energy use.

How Is Energy Billed?

Just like gas is measured in gallons and we pay per gallon, energy is measured in kilowatt-hours (kWh), and we pay per kilowatt hour. On your PG&E energy statement, energy usage is measured by kilowatt-hours. PG&E offers different rate plans, but this article will focus on the most common E-1 tiered rate plan. With a tiered rate plan, customers are charged based on how much power they use, not when they use the power.

Each month, customers are given a baseline energy allowance that is billed at a lower rate per kWh. As customers use more power and go beyond their baseline allowance, they move into a second tier, which charges more money per kilowatt-hour. Throughout the month, they are billed at higher rates for the extra power. When usage falls into the third tier, or the high usage tier, they may pay up to $0.60/kWh, or about three times the baseline price. Therefore, it is important to check your energy bill and monitor usage to avoid unexpectedly astronomical charges.

The Problem with Tiered Energy Plans

This tiered pricing system encourages energy-saving and efficiency. However, it makes customers extra susceptible to rate increases and unpredictably high energy bills. Due to continuous PG&E energy rate increases, Northern California homeowners are paying more money for less power, and each tier is becoming more expensive.

The devastating wildfires that ravaged Northern California in 2018 cost PG&E about $15 billion. As a result, the utility is increasing consumer rates to help them pay for grid upgrades to reduce the risk that its antiquated equipment will cause deadly wildfires. After two years of bargaining with California regulators, an 8% rate increase scheduled for March 1st, 2021 was approved. The higher prices are projected to boost the bills of PG&E’s customers by an average of $13.44 a month. It is highly unlikely that this will be a one-time rate increase. Historical data shows that PG&E has raised rates roughly 3-6% per year since 2009.

The increases come at a time when millions of Californians are struggling to make ends meet during a recession caused by the COVID-19 pandemic. They may hit those on fixed incomes, such as elderly customers on social security or unemployed workers, especially hard. The percentage of customers’ monthly income that goes toward energy bills will increase, while their monthly income stays the same.

Turn to Renewable Energy

Even as unstable weather conditions and natural disasters accelerate, PG&E continues to drag its feet on upgrades to its grid. The future is looking grim for Northern California homeowners and the utility company, and it doesn’t take psychic powers to predict continued rate increases and power shutoffs.

Given these projections, you must ask yourself if you want to be bound to PG&E’s electric rates, which will continue to undergo readjustments for the foreseeable future. Or do you want to take control over your power, lock in your energy rates, and save tens of thousands of dollars in the long run? Thousands of California homeowners, tired of blackouts and ever-increasing rate hikes, have installed home solar systems to take back their power from PG&E.

To learn more about how you can save tens of thousands of dollars in PG&E bills while contributing to a cleaner, greener future, contact SolarUnion today.