Gas and Electric Services: Your Public Utility Bills
Utility Bills: A Hard Look
Have you looked at your utility bill lately? I mean, really looked at it? Sure, the first thing we all see is the amount due column, which inspires plenty of grumbling. But read the itemization. Look at all those extra taxes and fees. They add much padding to the bottom line—and to the bottom line of the utility corporation as well.
Did you know that a good many of these so-called ‘taxes’ often do not, in fact, end up being transferred to the government coffers? Parent companies end up writing off their subsidiaries, who in turn don't pay the taxes they appear to owe. Additional fees deliberately misnamed either as taxes or fees, have been lobbied for by the utility itself: they go right into the utility's bank account, inflating their own net profit. The end result of this money shufflle is that you, the consumer, have been charged more than once for the services provided.
When you pay your monthly utility bill, be assured that a large portion is earmarked for these special-interest expenditures intended to benefit the utility, and not to improve your service.
This is not easy to track down, but it can be done so obliquely with a bit of research. Here in California, P.G. and E., according to the Senate Office of Public Records (via the Center For Responsive Politics), is at the very top of the list for lobbying expenditures. Their spending for 2010? An obscene $45,460,000!
Update: The same site lists P.G and E's spending on lobbying for 2017 as $3,730,000. A significant drop of about 92% from 2010, which saw the highest in a cycle of marked ups and downs starting in 2006. Nonetheless, it is still a lot of money.
A Little Bit of History
Northern California’s utility giant, P.G. and E. began back in 1852 as the San Francisco Gas Company. The early supplies of gas for cooking and lighting were by means of gasification from coal (rather than the natural gas we now use). As this technology was further studied and implemented, more start-up companies came into existence. By 1905, there were 5 different companies that then merged and became Pacific Gas and Electric. By 1952, the number of buyouts and mergers had added up to 520 different gas and electric suppliers consolidated under the P.G. and E. mantle.
Gradually, P.G. and E. became a monopoly provider of power for Northern California, much as Southern California Edison did for the lower half of the state.
Obscene Rate Increases
Despite so-called "regulating agencies," rates have skyrocketed over the years, far out of proportion to other price increases.
From my parent's average P.G. and E. bills between 1946 and 1950 of $5.70 per month to our current average bills of $250 is a whopping 4,286% increase.
By contrast, a loaf of bread or quart of milk has gone up "only" 1,400% in the same period.
This not a small increase, but contrasted against the rise in utilities, you see a 206% higher rate of increase for the utilities.
It is unconscionable, and illustrates well why many ratepayers in Northern California refer to the company as "Pacific Greed and Extortion."
I am terrible at math: to insure my figures are accurate, I used an online percent increase/decrease calculator. which you may find it useful or helpful for your own research.
Other Options Are Few
The bigger a company becomes, the less responsive it is to its consumers. In the case of these utility giants, termed as ‘legalized monopolies,’ the consumer has nowhere else to turn for gas and electric service.
The much-touted solar conversions are outrageously expensive, and therefore unavailable to most consumers. The break-even point, (averaging 20 years as promoted by the industry sales force), is likely to be beyond the remaining life expectancy for many.
Wind turbine power is another alternative energy source available, in principle, to get “off the grid” and obtain electrical power for free. Again the equipment is prohibitively expensive for the majority of people.
Additionally, the consumer must be located in an area with sufficient wind on a consistent basis. If that criteria is met, there are hurdles to be jumped in the form of city and county zoning regulations.
Beyond that, wind turbines, seen so gracefully turning on wind farms in the hills near freeways, are not so nice up close and personal. They are noisy.
It would be like having an idling helicopter right outside your door. Unless you live on a property with massive acreage where the turbine can be located an acre or two away from your house, it is not a practical idea for the masses.
The Supposed Guardians of the Public Interest
The Mission Statement of the California Public Utilities Commission (CPUC) :
” The California Public Utilities Commission serves the public interest by protecting consumers and ensuring the provision of safe, reliable utility service and infrastructure at reasonable rates, with a commitment to environmental enhancement and a healthy California economy. We regulate utility services, stimulate innovation, and promote competitive markets, where possible, in the communications, energy, transportation, and water industries.”
In this author's opinion, these statements, in a very generous assessment, at least stretch the truth. In point of fact, these agencies seem to be created to better serve the profits of the utilities themselves by merely rubber-stamping their requests for rate increases.
I am not alone in making such a charge of the fox guarding the hen house.
Worse, many utility corporations have been caught in outright fraud, which, if committed on such a scale by you or I, would result in a conviction for felonious grand larceny.
One such incident involves the current touting of so-called “green energy” and the forced implementation of fluorescent light bulbs. The small ones for lamps and ceiling lights in household fixtures are referred to as “compact fluorescent lights,” or CFLs.
P.G. and E. had a program in place to make these (very expensive) new bulbs available to California consumers at a discount. What happened?
According to the consumer watchdog organization, T.U.R.N. (The Utility Reform Network), here’s exactly what happened:
“A program funded by customers permits PG&E, SDG&E and SoCal Edison to sell the bulbs at a discount. The reduced-cost CFLs are supposed to conserve energy and reduce our state's need for expensive new power plants. But utility greed and mismanagement have resulted in the bulbs being sold out-of-state, providing little direct benefit to the consumers who pay for the discount.”
Excuse me? "A program funded by consumers..." For this sham of 'going green,' we are forced to pay twice? Since these CFLs are now mandated by law, the old style incandescent bulbs are no longer being manufactured. I smell collusion and kickbacks.
The Worst Case Example
Somehow, those slippery CEOs at P.G. and E. are managing to skate around the concept of public responsibility, and continually seek rate increases to its customers to pay for things that should instead be paid for by its stockholders, in the form of reduced dividends.
This is particularly true in the matter of negligent deferred maintenance, such as that which caused the fatal fire in San Bruno, CA, back in September of 2010. Interestingly, that is the same year of the huge lobbying expenses discussed above.
The penalty assigned by jurors in the subsequent investigation and criminal trial is but a slap on the wrist; pocket change for such a large corporation!
A Resident's Home Video Captured Moments After the Blast
The San Bruno Disaster Penalty
If It’s Not Illegal, It Ought To Be
An article from Utility Consumers Action Network (UCAN) breaks down the utility bill line items, but I immediately noticed that various 'line items' have been singled out for specific charges on your bill. These are the 'double-dipping' charges. In other words, they are supposed to be part of the normal cost of doing business, and are already included under the basic charges for gas and electricity.
Now, it seems to me, with all the promotion of reduced consumption, whether mandated or voluntary, there is no need to assess charges for increased consumption. Something is very wrong, here.
Adding to the insult of the double, triple and quadruple-dipping into the wallet of the utility consumer is the practice of money wasted on advertising.
Why does a monopoly need to advertise? We see advertisements for P.G. and E. in many areas: billboards, TV, print media and online. None of this comes cheaply. Advertising is, in fact, very expensive. We are captive consumers. This money would be better spent on lowering our rates than on pointless advertising and propaganda campaigns.
It may or may not be technically illegal, but it is most certainly unethical.
If You Want to Gripe About These Practices...
There is little doubt that P.G. and E. is not alone in its practice of overcharging consumers by means of these excessive fees and bogus taxes. The National Association of Regulatory Utility Commissioners will help you locate the regulating agency in your state.
There is also the option of contacting your local elected officials at the state level, and giving them an earful.
Finally, your United States representative in the House or the Senate is deserving of hearing about these egregious charges, as the feds are also involved to some extent.
Where To Find More Information or Volunteer to Help
- UCAN | Utility Consumers\' Action Network - non-profit, public interest consumer advocacy
- US: Many Utilities Collect for Taxes They Never Pay
Search the site for the above title, by David Cay Johnston, The New York Times March 15th, 2006 The specific URL does not want to 'take' within this article.
- Source Watch
Find information about corporations and utilities
- TURN Consumer Advocates
The Utility Reform Network
© 2011 Liz Elias