OAKLAND — PG&E profits hopped higher in the first three months of 2024, a first-quarter financial picture that was brightened by a state regulatory decision last fall to approve increased monthly bills.
The utility titan also raised its earnings forecast for 2024, a prediction that suggests investors and Wall Street can look forward to even better profits than initially anticipated.
For the January-through-March first quarter of 2024, PG&E captured $732 million in profit, up 28.6% from $569 million in earnings for the same quarter last year, the utility reported Thursday.
The jump in profit arrives as PG&E customers express increasing frustration with skyrocketing monthly bills.
PG&E Chief Executive Officer Patricia Poppe acknowledged rising customer bills in comments during a conference call to discuss the financial results.
“We appreciate that near-term bill pressure…is difficult for some of our customers,” Poppe told Wall Street analysts.
Last November, the state Public Utilities Commission that oversees the utility authorized a 13% increase in customer monthly bills to finance an array of tasks, including efforts to mitigate wildfire risks.
After an Earth Day event in Richmond on April 22, Poppe, in response to a question posed by this news organization, said she anticipates a day when PG&E monthly bills actually decline.
“We see a future where customers’ bills can start to come down,” Poppe said.
That would be a welcome counterpoint to current trends. In January 2024, the average monthly bill of $294.50 for residential customers who received combined electricity and gas services from PG&E was 22.3% higher than in January 2023.
“I look forward to the day when we can announce that customers’ prices are coming down,” Poppe told the analysts during the earnings call Thursday. “At the same time, we stand by the need for the near-term increase as this…is funding critical work, which is making our customers and communities safer than ever before.”
The company began to sketch out a timeline for when bills might finally start to head lower — although it’s unclear what heights might be reached before the descent begins.
“Near term, we expect prices to come down in 2025 and again in 2026,” PG&E spokesperson Ari Vanrenen stated in comments emailed to this news organization. “Longer term, we believe decarbonizing our economy through greater electrification will reduce overall household energy spending.”
PG&E reported Thursday that its first-quarter revenue slowed. Overall operating revenue totaled $5.86 billion in the first quarter of 2024, down 5.6% from the same quarter in 2023.
Electricity revenue totaled $4.05 billion during the first three months of 2024, down 1.6% from the first quarter of last year.
Natural gas revenue was $5.86 billion in the first quarter of this year. That was a decrease of 13.4% from the year-ago first quarter.
Excluding an array of unusual items that don’t directly relate to PG&E’s typical operations and business, the utility’s profits also zoomed higher.
The adjusted profit totaled $800 million in the first quarter of 2024, a hefty jump of 30% from the same period the year before.
“We’re reinvesting the vast majority of our profits back into the business to continue making improvements for our customers,” the PG&E spokesperson stated in the email comments.
Still, residential customers must face the grim prospect of further increases in monthly bills as an array of proposals make their way through the state PUC review and approval process.
Plus, PG&E is still planning to file a 10-year plan to bury transmission lines, a process that has drawn fire from multiple critics for being too costly and too time consuming.
Oakland-based PG&E believes it can capitalize on rising demand by key corporate players — including numerous tech titans — to meet a projected rise in demand for electricity in the coming years.
Poppe told analysts that she arranged a meeting at the PG&E Metcalf Transmission Substation in south San Jose recently and invited the company’s corporate customers. She found that the companies in attendance would build new facilities, primarily data centers, if the electricity system could support the expansion.
“When I got there, I was pleasantly surprised to see AWS (Amazon Web Services), Microsoft, Apple, Google, Equinix, Cisco, Western Digital Semiconductors, Tesla, all in attendance,” Poppe said. “These are our customers that we serve who want us to serve more. They were very clear that they would build where we can provide.”
PG&E foresees plenty of expansion opportunities and rising revenue as it attempts to meet anticipated growth in demand for electricity down the road.
“Our electric load growth opportunities are not just electric vehicles and data centers but an eventual and necessary decarbonization of our entire economy with clean electricity as the primary energy of the future,” Poppe said during the conference call.
