North Hollywood, CA -- (ReleaseWire) -- 12/14/2018 -- Pacific Gas & Electric Company (PG&E) customers may see drastic spikes in their electricity bills as a result of the recent lawsuits sparked from the disastrous wildfires in Northern California adding to the already increased electricity rates from increased fossil fuel costs.
Edward Harner, Green Solar Technologies COO, says "PG&E asked for permission to raise its customers' rates in a filing with the Federal Energy Regulatory Commission in October of this year. That was a month before the devastating Camp Fire that happened in November. Because we are a nationwide solar company, we've seen time and time again that utilities all over the country raise prices to their customers when the utility incurs unanticipated costs from their operations."
PG&E is currently being sued and is under investigation for an metal hook that could be the cause of the deadly Camp Fire. According to an article by Maria L. La Ganga and Diana Marcum, "While authorities have yet to determine an official cause of the Camp Fire, at least 20 lawsuits have been filed against Pacific Gas & Electric, accusing the utility of allowing its equipment to spark the blaze..."
Fortunately, there is an option for PG&E customers that can free them from consequential rate hikes and help prevent them (and others) from falling victim to PG&E's possible future mistakes: solar.
"Part of the value proposition with solar is that utility rates continue to rise while the cost for solar energy systems is fixed. Solar helps you save money and also allows you to control one aspect of your finances giving you peace of mind, " says Edward Harner.
Wall Street analysts estimate that PG&E could face up to $15 billion in property damage liability for a number of 2017 wildfires that destroyed parts of Northern California's wine country. PG&E claimed that its stock would tank if it were forced to pay for the damages.
"In most areas, utilities act as monopolies because the customer doesn't have the ability to choose where they purchase their electricity. If a company can't raise funds to offset costs, captive customers will likely foot the bill," Edward Harner explained.
Reporting on the 2017 wildfires, George Avalos remarked in an August 28, 2018 article published in The Mercury News, "State fire investigators determined that PG&E's equipment and facilities caused 16 wildfires last fall, including 12 of the October wildfires in Northern California. Of the 16 fire incidents, state investigators have alleged that the company violated laws requiring proper maintenance of their facilities in 11 of them."
In addition, PG&E reported an electrical incident on the morning of November 8th that may have caused the Camp Fire, which killed 86 people and destroyed over 14,000 residences leaving over 52,000 people homeless. The liability for the Camp Fire has been assessed to be at or above $15 billion.
According to an article published on CNBC, "A state law approved this year makes it easier for the company to raise rates to pay off lawsuits, but the company says it still faces high risk and got no relief for fires that started this year."
Adding to PG&E's woes, its stock value has plunged more than 50% in the last year. While the Camp Fire was raging in Butte County, a separate CNBC article by Thomas Franck reflected recent changes to PG&E's stock, noting that, "The plunge in the company's stock erased $3.7 billion in value on [November 14th] as its market cap slid to $13.3 billion from $16.9 billion."
PG&E may not have any choice but to introduce customer rate hikes to help it recover from its combined losses. It may also sell revenue bonds, but could force its customers to help repay the secured notes—also leading to higher electricity bills. We have seen this scenario foreshadowed by the failed Santee Cooper nuclear project in South Carolina, which is estimated to cost the average Santee Cooper electric ratepayer more than $6,000 over the next four decades to pay off.
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