Dive Brief:

• Pacific Gas & Electric today will begin charging higher rates for residential customers, alongside changes to its rate structure tiers the utility says will help California meet aggressive environmental goals and better cover the cost of service. 
• Residential customers will see a 2.1% increase in electric transmission rates the utility said. And customers who use less, may wind up paying more.
• PG&E also intends to introduce a High Usage Surcharge to encourage energy conservation among customers who are typically consuming more electricity. 

Dive Insight:

PG&E's changes to its tier structures follows on a pattern of rate hikes, but is also aimed at encouraging customers to use less energy.

However, the Daily Democrat said the San Francisco-based utility concedes that due to its new rate structures, customers who use les energy are likely paying more for power.

The newspaper also notes than in the last few years PG&E has taken steps to simplify its rates, reducing from energy-use tiers from five, now down to two. And, this is the second electric rate increase this year, alongside the utility's move to begin charging more for gas last summer as well.

In a statement on the changes, PG&E said the "current electric rate structure was established during the 2001 energy crisis. It's outdated, complex and confusing for customers."

In order to encourage energy conservation and efficiency, PG&E said that for years, the costs of service to maintain the energy grid and ensure reliability "were disproportionately placed upon customers who found themselves in the higher tiers – most often impacting those who live in hotter climates."

Beginning today, the utility said it will make changes to help those with greater cooling needs, but the utility also noted it could wind up costing more for customers who use less.

"After the changes are implemented, customers who need to use more energy may see lower bills, while customers who typically are able to use less energy may see higher bills," the utility said.

Mark Toney, executive director of The Utility Reform Network, told the San Jose Mercury News the changes take the wrong approach.

"People should be rewarded for conserving energy, and not rewarded for being an energy hog,” he said. “People are being punished with higher bills for using less energy.”

PG&E's statement also noted that the changes aim to support the state's clean energy goals. Customers who use more than four times the baseline amount of electricity will receive a surcharge on their bills. The baseline will vary based on customer location, the season and their home heating system.

PG&E said less than 10% of residential customers will likely incur the High Usage Surcharge, which applies only to customers subscribing to tiered electric rate plans.