PG&E is raising eyebrows after asking for a rate increase on natural gas to fund a $26.6 million shareholder “reward” payment.
PG&E notified customers of the requested rate hike, stating it saved consumers $170 million by purchasing the lowest gas prices possible from November 2022 to October 2023.
While most of the savings go to consumers, the company believes shareholders deserve a portion under CPUC rules, which allow “shareholders may receive a performance-based incentive when procurement costs are lower than the established market benchmarks.”
If approved, average monthly bills will go up by about 41 cents.
Sixty-seven-year-old Janice Mercado and her friend, Janice Henry, were caught at their senior knitting club in Antioch, which they noted is one of the few activities they can still afford.
“The PG&E rates keep going up and our Social Security doesn’t. So it’s hard to balance the budget here,” Mercado said.
Mark Toney, executive director of The Utility Reform Network (TURN), called the request outrageous and unfair.
Ratepayers are already asked to shoulder the costs when PG&E goes over budget, he said, and shouldn’t have to pay for a shareholder reward when the utility spends less than projected.
“Because PG&E thinks they did well and keeping it not too high, they wanna reward just for doing their job. And their job is to keep rates as low as possible,” Toney said. “If they want their shareholders to be rewarded when they underspend, then their shareholders should be held accountable when they overspend. And that’s not what PG&E is asking for.”
The utility’s request hinges on a mechanism known as the Gas Cost Incentive Mechanism, or GCIM, which allows utilities to share a portion of savings when they negotiate favorable fuel prices.
PG&E notified customers of the requested rate hike, stating it saved consumers $170 million by purchasing the lowest gas prices possible from November 2022 to October 2023, with most of the savings going to consumers while the company believes shareholders deserve a portion.
The California Public Utilities Commission is not expected to make a decision on PG&E’s shareholder reward request until sometime next year.
The gas utility’s request comes as
PG&E provides electric services and natural gas to 16 million people throughout central and northern California.
The current average cost for gas and electricity is $285 per month — or about $3,420 per year — which is an 84% increase since 2016 figures.
In the viral moment that sparked this latest round of outrage, PG&E announced it was seeking rate approval for the shareholder incentive in late July 2026. The utility presented the request as justified by its procurement efficiency, arguing that negotiating lower gas prices on behalf of consumers should earn executives and shareholders a bonus. However, the announcement landed poorly amid broader frustration over California’s escalating energy costs, coming as
16 million customers may see fees spike by as much as $840 by 2030, according to a forecast from California Public Utilities Commission’s Public Advocates Office.
The shareholder reward request exemplified for critics the fundamental imbalance: ratepayers foot the bill for rate increases tied to company performance metrics, yet are asked to bear losses when PG&E overshoots budgets—while shareholders pocket incentives when the utility underspends.
Advocates and customers view the request as particularly galling given
PG&E customers pay some of the highest energy bills in the country, even though PG&E has shattered profit records.