Why is My PG&E Bill So High in 2024 and What Can I Do About It?
Recently, customers across Northern California received an unwelcome surprise when they opened their PG&E bills: the charges are higher than ever.
In fact, customers are paying about 32% more right now than they were this time last year, translating into an average increase of about $79 per month per customer.
But why are PG&E bills so high right now, and what can you do to save money?
In this blog, we’ll explore the reasons for the rate hike and discuss PG&E alternatives to help you keep more cash in your pocket.
Key Takeaways
The hike in PG&E rates, reaching up to 32% in 2023, is due to factors including increased natural gas demand, rising wholesale prices, and maintenance of aging infrastructure.
Customers can potentially mitigate high bills by adopting energy-saving measures such as lowering the thermostat, utilizing energy-efficient appliances, and considering alternative energy solutions like home solar systems.
PG&E plans further rate hikes in 2024, 2025, and 2026, highlighting the urgency for homeowners to explore sustainable and cost-effective energy alternatives now.
The History of PG&E Rate Hikes
This isn’t the first time PG&E customers have been surprised by their bill totals. In fact, the utility is notorious for raising its rates.
In January of 2023, PG&E raised rates by 8.9%. This was preceded by an 8% increase in electricity prices and an 11% increase in gas prices in 2019, and an 8% increase in electricity prices in 2022.
Overall, PG&E has increased its rates an average of 5.7%-6% year over year for the past 11 years.
In January of 2023, PG&E announced that customers’ bills could go up as much as 32%, in contrast to the 24% they initially expected. Anecdotally, however, some customers saw their bills double this past winter.
Why Your PG&E Bill is High (And What to Do)
In the past, PG&E has cited factors like upgraded safety equipment, aging infrastructure, debt and civil suit payouts, and the costs associated with new gas pipeline construction for its skyrocketing rates.
Here are a few of the reasons PG&E bills are so high right now and our suggestions for how to save money:
1. Higher natural gas demand
When cold weather hits the Bay Area as it did this past winter (California faced historic cold temperatures), the demand for natural gas increases accordingly.
Since natural gas is in short supply right now (more on this in the next point), increased demand ramps up prices and causes bills to climb.
What to do about it: Consider whether you’re using more or just paying more for using the same amount.
To do this, compare your current usage to your usage at the same time last year. You can find this information on your PG&E bill.
If you’re using more natural gas or electricity, even under NEM 3.0, consider finding ways to cut down, such as replacing major appliances that are more than 10 years old, unplugging major appliances when not in use, and ensuring you have energy-efficient lightbulbs throughout your home.
2. Increasing wholesale prices for natural gas
PG&E does not mark up its natural gas prices. This means that customers pay the same prices the company pays.
Unfortunately, higher wholesale prices for natural gas are causing bills to skyrocket.
The increase in wholesale prices is due to a combination of factors, including pipeline issues and the decreased natural gas supply, mainly due to the war in Ukraine.
Since Russia is a major exporter of natural gas, this conflict has decreased supply, even as demand increases.
What you can do: Consider lowering your thermostat. For every degree your thermostat is lowered, you’ll save an estimated 2% on your heating bill.
For the most savings, keep your thermostat at 68 degrees or lower and turn off your heater when you’re not home if your health allows it.
Consider replacing your gas furnace with an electric heat pump. Large rebates and/or tax credits are becoming available in 2023 through the IRA.
Find more information through Rewiring America’s online calculator, which can help you identify what you are eligible for.
Ensure your vents are clear, and your windows are well-sealed (use weather stripping to keep drafts out and lock the heat in), and change your furnace filter every three months.
3. The cost of maintaining aging infrastructure
In recent years, PG&E has struggled to replace and maintain its aging infrastructure, and some of that expense has been passed along to customers.
In past years, the utility giant has made it clear that some of the money from rate hikes has gone to improve the safety and efficiency of its infrastructure.
What you can do: You can’t stop PG&E from raising rates, but you can find ways to save money proactively in your home.
We recommend reviewing PG&E’s rate plan options online to see if you can save more money on a different plan.
4. Fines levied for causing wildfires
In 2018, a California judge ordered PG&E to pay $1 billion in civil penalties for starting some of California’s most deadly wildfires.
In addition to causing fatalities, the fires destroyed infrastructure, including power lines, and led to rolling blackouts.
The destroyed infrastructure increased PG&E’s cost of service.
As unfair as it is, PG&E ultimately passed this financial burden to its customers through multiple rate hikes and bill increases.
What you can do: Make slight lifestyle changes to save energy, including setting your water heater to 120 degrees, washing your clothes in cold water, and drying them on low.
You should also open your shades on sunny days to let the sun in, which will warm your home passively.
Want to Break Free from PG&E? What You Need to Do
While there are some things you can do to save energy and money within PG&E’s current rate structure, these are only band-aids for a problem that will keep worsening in the coming years.
PG&E has already proposed to raise rates in 2024, 2025, and 2026, respectively, and the trend shows no signs of stopping there.
Ultimately, the only way to save money and avoid rate hikes in the long term is to seek alternative energy solutions.
Installing a solar panel system equipped with battery backup allows you to generate your own electricity and store the excess to power your home during peak energy use hours, at night, or on cloudy or stormy days.
The result is meaningful energy savings for you and your household, and no more stress over when the next PG&E rate increase will hit.
Sick of Dealing With PG&E Rate Hikes? Now is the Time to Go Solar!
Stop waiting for the next rate hike or wondering whether you’ll be able to pay your electric bill next winter. Now is the time to quit PG&E for good and take your energy into your own hands.
Here at Sandbar Solar & Electric, we help PG&E customers throughout the Central Coast and San Francisco Bay Area California design and install custom solar systems, which provide peace of mind and long-term cost savings.
Are you considering installing a solar system for your home?
The best time to go solar is now – before rates increase again! Call us to explore your options and to request a free solar quote: (831) 469-8888
FAQs
How much are PG&E rates increasing?
Residential customers who get gas and electricity from PG&E will see an 18% increase in their bills in 2023, from an average bill of $217 to $255. Additional increases for 2024, 2025, and 2026 total $1,048, $860, and $680 million for the utility, respectively.
What uses the most electricity in a home?
Your home’s heating and cooling systems are the largest consumers of electricity, followed by your water heater, lighting, refrigerator, washer and dryer, oven, and dishwasher.
Because of this, turning down your thermostat is a great way to save money on your electrical bills.
If you have an electric vehicle, you’re likely pulling quite a bit of electricity to charge your vehicle. Hot tubs and saunas also use quite a bit of energy, so turning them down or off can help save money.
How often can I change my PG&E rate plan?
You can change your plan two times in a twelve-month period, after which you must remain on your chosen rate plan for one year.
