Shocking! Some Californians facing $700 power bills this month – what’s going on? 🏠

Californians are facing an unprecedented surge in electricity rates, leading to widespread outrage and calls for political accountability. Recent emails from PG&E have informed residents that their July power bills will exceed $540, with some reporting amounts as high as $700.

KMPH News reported that a Fresno restaurant owner, Manuel Perales of Yosemite Falls Cafe, has been hit with a staggering $21,000 PG&E bill for one month, nearly double his rent. Perales expressed his uncertainty about how he will manage to pay such an exorbitant amount.

As a result, there is a growing demand for the immediate recall of Governor Gavin Newsom.

California now holds the unenviable position of having the highest electricity rates in the nation, second only to Hawaii. This blog post delves into the reasons behind this alarming situation and examines the role of the California Public Utilities Commission (CPUC) in this crisis.

The Role of the California Public Utilities Commission

The CPUC, a five-member agency appointed by Governor Newsom, is responsible for regulating the prices, service, and reliability of private energy utilities. Its primary duty is to protect utility customers by ensuring that the rates charged by utilities like PG&E are fair and justified. However, recent decisions by the CPUC have led to significant rate increases, raising questions about its effectiveness in fulfilling its mandate.

Unprecedented Rate Increases

In November, the CPUC authorized a historic rate increase of over $2.56 billion for PG&E’s 2023-2026 general rate case spending estimates. This decision allowed PG&E to charge its customers for various costs, including new infrastructure, system maintenance, and employee salaries. The rate increase was implemented in stages, starting with a $1.3 billion hike in January, followed by additional increases of $716 million in 2024, $359 million in 2025, and $204 million in 2026.

Overruling Judicial Recommendations

The CPUC’s decision to approve these rate increases came despite an initial recommendation from its administrative law judge for a much smaller hike. The judge’s decision was based on an assessment of whether PG&E’s spending was “just and reasonable,” a legal requirement for approving utility costs. However, politically appointed commissioners overruled the judge, granting PG&E the bulk of what it requested without sufficient justification.

Further Rate Hikes and the Diablo Canyon Case

Before the ink was dry on the 2023 rate increase, PG&E sought an additional $4 billion for various expenses, including costs associated with the Diablo Canyon nuclear power plant and infrastructure upgrades. The CPUC approved an immediate increase of $516 million in March, bypassing legal requirements for evidentiary hearings and cross-examination of PG&E’s witnesses. This decision marked a new low in regulatory oversight, with the commission admitting that it departed from the general requirement to raise rates only after determining costs were reasonable.

Fixed Charges and Future Increases

Adding to the financial burden on residents, the CPUC is now considering a new fixed charge on top of current pay-as-you-use prices. If approved, this charge will impose a $24.18 monthly fee on residential customers not eligible for low-income discounts, significantly higher than the national average for similar charges. This fixed fee is expected to pave the way for further rate increases, with no safeguards in place to prevent double-dipping by utilities.

Legislative Action and Reform

In response to these issues, California legislators have introduced several bills aimed at curbing the CPUC’s unchecked power and protecting consumers from unjust rate increases. AB1999 seeks to cap the fixed charge at $5 for low-income customers and $10 for others. AB2054 aims to end the revolving door between the CPUC and utility companies and increase scrutiny of utility funds. SB938 proposes to stop ratepayers from funding utility lobbying and advertising.

PCG Technical Analysis

Trend Analysis:
The stock has been on an upward trend recently, rising from around $17.00 to $18.12. The 50-day moving average (blue line) is currently at $18.09, while the 200-day moving average (red line) is at $17.24. The price is above both moving averages, indicating a bullish trend.

Support and Resistance:
There is a support level around $17.00, coinciding with the 200-day moving average. The resistance is currently around $18.50, as the price has approached this level before pulling back.

Volume:
The volume is relatively high, with a recent spike to 14.17 million shares. High volume on upward price movement typically confirms the bullish trend.

Relative Strength IndexIn the world of technical analysis, the Relative Strength Index (RSI) stands as a cornerstone tool for traders seeking insights into market momentum. Developed by J. Welles Wilder ... More (RSI):
The RSI is at 60.58, indicating the stock is approaching overbought conditions but is not yet at a critical level. This suggests continued upward momentum but warrants caution.

On-Balance VolumeThe On Balance Volume indicator (OBV) is a technical analysis tool used to measure the flow of money into and out of a security over a specified period of time. It is a cumulative ... More (OBV):
The OBV line is trending upwards, suggesting that buying pressure is increasing, which supports the continuation of the bullish trend.

Stochastic RSIIn the realm of technical analysis, the Stochastic RSI (StochRSI) emerges as a powerful tool for traders seeking to navigate market dynamics with precision. Developed by Tushar S. ... More:
The Stochastic RSI is at 1.000, which is extremely overbought. This might indicate a short-term pullback is possible as the stock may need to consolidate before making further gains.

Average Directional IndexThe Average Directional Index (ADX) stands as a cornerstone indicator in the toolkit of technical traders, offering insights into the strength of market trends. Developed by Welles... More (ADX):
The ADX is at 26.45, indicating a strong trend. A reading above 25 generally signifies a robust trend, either upward or downward.

Chaikin OscillatorNamed after its creator Marc Chaikin, the Chaikin Oscillator stands as a formidable tool in the arsenal of technical analysts. This oscillator is designed to measure the accumulati... More:
The Chaikin Oscillator is positive at 2.58M, indicating that the accumulation and distribution line is bullish, further supporting the upward price movement.

Time-Frame Signals:

• 3 months: Hold. The stock shows strong bullish signs, but the overbought Stochastic RSI suggests potential short-term volatility.
• 6 months: Buy. The overall trend is positive, and the stock may continue to rise as it consolidates gains.
• 12 months: Buy. The long-term indicators and moving averages suggest a sustained upward trend, making this a favorable long-term investment.

Past performance is not an indication of future results. Always conduct your own research and consider consulting with a financial advisor before making any investment decisions. 🧡

Looking Ahead

The CPUC’s approval of unproven and unjustified rate increases has placed a heavy financial burden on California’s families and businesses. Robust legislative oversight is needed to rein in the CPUC’s actions and ensure that utility rates are fair and reasonable. Without such measures, Californians can expect their energy bills to continue to skyrocket, exacerbating financial hardships and fueling further public outrage.