PG&E proposes to replace the five-tiered rate system with three tiers and to lower the rate or price that customers in the top tier pay for electricity. In a tiered system of rates, as required in California, customers pay more per unit of energy as energy use increases.
Customers in Tier 5 currently pay almost 50 cents per kWh, compared to 11.9 cents for Tier 1 (baseline) usage. Under PG&E’s new proposal, the top rate that customers will pay in Tier 3 will be 29.8 cents per kWh.
Tom Bottorff, senior vice president of regulatory relations at PG&E, said: “We’ve heard our customers tell us, loud and clear, that rates for those who use the most energy are just too high. Our proposal would set rates more fairly and equitably, and help avoid summer bill shocks, without sacrificing the incentives to use energy more efficiently.”
In its new proposal, which will take effect next year, PG&E is expected to make several other changes in its residential rates to spread costs equitably among customers. Separately, PG&E has proposed changes to better reflect the actual costs of providing electric service among various customer classes. As a result, costs allocated to residential customers will drop 2.9%, but will increase 4.6% for small business customers and 6% for agricultural customers, the company said.
