PG&E says it’s feasible to break up the embattled and insolvent utility into separate electricity and gas systems — but also has sketched a forbidding picture of higher monthly utility bills should the breakup materialize.
San Francisco-based PG&E issued the warning of rising rates as part of a wide-ranging examination by the state Public Utilities Commission of the utility’s safety culture. Failures in PG&E’s safety efforts caused a fatal explosion that killed eight people and destroyed a San Bruno neighborhood in 2010, a disaster that led to PG&E’s criminal conviction in 2016 for felonies it committed before and after the lethal blast.
“Separation of PG&E’s gas and electric operations appears feasible from a technical and operational perspective,” PG&E stated in a filing connected to the PUC investigation. “The gas system and electric system are functionally independent from one another and each has its own operational control center.”
But an actual breakup of the utility into its two most substantial pieces bears plenty of risks, in PG&E’s view. Ratepayers may be saddled with those risks, the utility said in a Feb. 13 filing with the PUC. Replies to the utility’s assessment are due by Feb. 28 to the PUC.
“Separating PG&E’s gas and electric operations could increase rates,” PG&E warned.
Why? PG&E offered a number of reasons, both long-term and on a one-time basis, that could fuel higher monthly bills.
“Increased headcounts in operations and asset management functions, as well as the duplication of
corporate services across separated entities, that is, human resources, fleet, finance, insurance, real
estate, safety, environmental, health, legal, regulatory, etc.” would be among the long-term higher costs, according to the PG&E filing.
Several one-time increases in costs could transpire, which PG&E described as incremental expenses.
“These incremental costs would include one-time costs associated with the duplication of services that are currently shared, such as technology infrastructure, service centers, equipment storage, and billing and customer support,” PG&E stated in the filing.
