Utilities Commission Approves PG&E Rate Hike For Pipeline Safety

Rates will rise for customers of California’s largest utility. Energy regulators voted Thursday to allow Pacific Gas & Electric to collect more money to store and transmit natural gas, including new tests and upgrades after the 2010 San Bruno pipeline explosion.

The California Public Utilities Commission approved a 27 percent jump in what PG&E charges customers for gas transmission, beginning in August, with further increases through 2018. Commissioner Liane Randolph described it as striking a balance.

"This decision, while it is a substantial increase, will protect the safety of the residents of California," Randolph said before the vote. "And ensure that the utility will comply with its federal and state mandates."

The commission expects the average bill to increase by about $7. The utility will use the money to assess, repair and replace hundreds of miles of pipe. It’s part of complying with new safety standards required after the San Bruno pipeline explosion killed eight people.

Mindy Spatt at the Utility Reform Network (TURN) says shareholders, not ratepayers should be on the hook for those costs.

"These huge rate hikes--and mind you this is just one of many that PG&E is asking for--are largely to fix a pipeline system that PG&E neglected for years," Spatt says.

PG&E will not be able to charge ratepayers for about 200 miles of pipe it has no records about. The commission has already decided to fine the company about $1.5 billion for the explosion with roughly half of that money supposed to off-set the cost of safety upgrades.

A federal criminal trial for the pipeline explosion also began last week.