$147-Million PG&E; Rate Hike Plan Is Unopposed

A $147.2-million rate increase proposed by Pacific Gas & Electric Co. was made without objection from consumer groups.

PG&E; and the commission staff agreed on the figures made public Wednesday with the recommendation of a state hearing officer. The state Public Utilities Commission will consider the proposal next month.

Under the proposal made by the state hearing officer, the average PG&E; customer would pay about $1.25 a month more for electricity to cover operating costs of the Diablo Canyon nuclear power plant.

The proposal by Administrative Law Judge Albert Porter would allow PG&E; to increase rates by $147.2 million, or about 3%, to pay for ongoing expenses at the plant. It would be in addition to a $54.2 million increase approved by the commission for Diablo Canyon expenses in 1985.

Keep the Money

The commission has also authorized the company to keep the money it has saved by generating electricity with nuclear fuel, rather than other fuels, instead of giving customers a 6.4% rate reduction. That decision was upheld last month by the state Supreme Court.

All those rate actions have been interim measures, designed to protect PG&E;’s cash flow and divide plant costs between current and future ratepayers until the commission decides how much of the plant’s $5.5 billion in construction costs was reasonable and should be paid by the utility’s customers. The decision is scheduled in late 1989.

Diablo Canyon, on the San Luis Obispo coast, began operating the first of its two reactors in May, 1985, nearly a decade behind schedule and at 13 times its original budget. The second reactor started operation in March, 1986.

The delays were mainly due to federal licensing problems, prompted by a design error and the discovery that a nearby earthquake fault was larger than originally believed.

Operating Expenses

The rate increase recommended by Porter is for “non-investment costs,” as opposed to construction costs. About two-thirds of the increase would cover annual operating expenses, with additional amounts for refueling outages, insurance, employee benefits and payroll taxes.

Although the utility has no current financial emergency, “it is important to maintain reasonable cash flow for PG&E; while we are in the process of making a final determination in this matter,” Porter said.