Pacific Gas and Electric announced plans this week to raise utility bills by as much as 16 percent over the next five years despite a recent request by the California Public Utilities Commission that prices be firmly capped.
If PG&E implements the rate hike as they plan to at the beginning of next year, consumers could see their average monthly bill climb from $54.50 to $63.50.
Energy rates are currently frozen under a state mandate that restructured California's electrical industry to allow for increased competition. However, energy shortages last summer caused rolling brown-outs throughout the state which prompted Gov. Gray Davis to sign AB970 into law on Sept. 6. That bill seeks to reduce approval time so new and expanded power plants can be on-line in time for next summer.
One such expanded power plant, planned for the Coyote Point substation in the North Shoreview neighborhood of San Mateo, met with strong resident opposition early this month. Neighbors complained that the noise and pollution from the expanded power power plant would destroy their quality of life.
Calpine, the South Bay energy company proposing the expansion, pulled its request soon after.
However, a report released Nov. 20 by the California State Energy Commission said there will be enough energy to meet next summer's demands unless temperatures are unusually hot.
The commission did say that new power plants should be built to handle California's rising demand, about 2 percent a year, for power.
That rise in demand, coupled with lower supply, is what is prompting the PG&E lawsuit to recoup $3.4 billion in losses the company said it incurred because of increased energy prices and an uncertain wholesale market.