OAKLAND — PG&E profits soared during its second quarter, powered by higher monthly bills that are rising far faster than the Bay Area’s overall inflation rate.
During the April through June second quarter, PG&E posted a profit of $520 million — up 28.1% from the utility titan’s profits from the same three-month period the year before, the company reported Thursday.
Oakland-based PG&E generated $5.99 billion in operating revenue in the 2024 second quarter — up 13.2% from the same quarter in 2023.
Electricity operations were the primary driver of the jump in overall revenue, although PG&E’s gas revenues were also higher.
PG&E on Thursday appeared to fine-tune its goal for reining in skyrocketing monthly bills for the utility titan’s customers.
In April 2024, during an impromptu interview with this news organization in Richmond, Poppe stated that her goal was for PG&E customers to see a decline in their monthly bills.
“We see a future where customers’ bills can start to come down,” Poppe said in response to questions from this news organization about fast-rising ratepayer costs, after an Earth Day event PG&E hosted in Richmond.
The messaging has shifted from absolute declines in monthly bill costs to increases that are more in line with inflation, as Poppe stated during a conference call with Wall Street analysts to discuss the quarterly financial results.
“Keeping bills at or below inflation for our customers” is PG&E’s current goal, Poppe told the analysts.
Even if bills were to match the inflation rate, that would be a dramatic — and welcome — change from the current situation for PG&E’s cost-burdened customers.
Over the 12 months ending in January 2024, combined bills for a typical residential customer who received electricity and gas services from PG&E averaged roughly $294.50 a month.
That was a 22.3% increase over the average monthly bill in January 2023 — rising eight times faster than last year’s inflation rate for the region. The Bay Area inflation rate rose 2.6% during 2023.
The utility titan is unlikely to keep bill increases within the inflation rate, according to Mark Toney, executive director of The Utility Reform Network, or TURN, a consumer group.
Toney believes this is the case because PG&E is expected to pursue multiple proceedings that could shove monthly bills even higher if the state Public Utilities Commission approves the requests.
“PG&E has so many proposals that are pending or will be filed for rate increases,” Toney said. “I don’t believe PG&E is going to keep rate increases within inflation. PG&E has too many rate requests coming up.”
Revenue for electricity operations totaled $4.46 billion in the April-June quarter, which was up 15.7% from the year before.
Natural gas operations generated $1.53 billion in revenue, an increase of 6.3% from the second quarter a year ago.
Excluding certain items that were not directly related to PG&E’s typical operations, adjusted profits for PG&E totaled $674 million in the second quarter, a 36.4% increase from the same period a year ago.
Despite weeks of elevated temperatures that at times reached triple digits, PG&E’s electricity system appears to be weathering the surges of heat, according to Poppe.
Our system performed well in the early July heat wave and benefited from numerous proactive steps,” Poppe said. “Looking at San Jose data and comparing July performance to the September 2022 heat wave, unplanned and sustained outages were down more than 50% with the total cumulative duration of those outages down more than 85%. The Bay Area region overall saw a 22% reduction in outages.”
One major key to drastically slowing the increase in customer monthly bills is widening electrification in California and the Bay Area through greater adoption of electric vehicles and appliances, PG&E maintains
Rising numbers of big business customers such as tech companies eager for more electricity could also help control costs for current customers — if PG&E can deliver that energy efficiently over a larger base of users.
“Beneficial load growth (for the electricity grid) is new load that helps to reduce monthly bills for existing customers,” PG&E Chief Financial Officer Carolyn Burke said during the conference call.
PG&E hopes to land major new customers as the Bay Area’s tech industry gallops through its latest evolution, this time into the artificial intelligence sector and other endeavors that could lead to expansion — and additional demand for electricity services.
“We are the hometown utility to Silicon Valley, home to AI and innovation and the headquarters of major cloud services providers,” Burke said. “The Bay Area has a vast fiber network and connects to a grid that is majority powered by renewables.”
PG&E executives are convinced that by adding major customers, the electricity grid costs can be spread among more ratepayers and potentially ease the burden on residential users.
“We can deliver on our plan to keep customer bill growth at or below inflation,” Burke said.
Toney remained skeptical that PG&E can keep increases in monthly charges close to or below the pace of inflation. “I’ll believe it when I see it,” Toney said. “Customers are going to have to pay more.”
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