Pacific Gas & Electric is seeking to raise rates by more than $2 billion over three years, arguing it needs the money in part to upgrade its gas and electricity networks and hire an additional 2,200 employees.

The San Francisco-based utility made the request Monday when it submitted a draft of its 2014 general rate case, the first step in a long process to set natural gas and electricity rates for utility customers.

"Safe, reliable and affordable energy is the foundation of our economy," PG&E President Chris Johns said in a four-minute video about the proposed rate hikes on PG&E's website. "It's what this rate case is all about."

If the request is approved by state regulators with the California

Public Utilities Commission, the typical PG&E customer who gets both gas and electric service from the utility would see their monthly bill increase by an average of $12 a month, or $144 a year, beginning Jan. 1, 2014.

 

"PG&E's own numbers for average bill increases are staggering -- about $150 a year," said Mindy Spatt of the consumer advocacy group TURN. "The general rate case is the main place where PG&E says 'This is what it will cost us to run the utility.' The good news for consumers is that TURN will be going over this with a fine-tooth comb."

Utility rate cases, which are typically filed every three years, are highly complex proceedings before state regulators. The five-member PUC is not expected to vote o

PG&E's general rate case until the end of 2013.

"This shouldn't just be an argument about cost," Tom Bottorff, PG&E's senior vice president of regulatory relations, said in an interview Monday. "The discussion is, what's necessary to make the system safe?"

PG&E is seeking $1.25 billion in 2014, $500 million in 2015 and $500 million in 2016 to cover additional infrastructure improvements and increased cost of labor and materials.

Of the $1.25 billion, $459 million would pay for the replacement of miles of older gas lines, new technology to improve gas leak detection and a new gas distribution control facility. PG&E plans to replace 180 miles of gas distribution lines per year, compared with just 30 miles currently, a sixfold increase.

Those issues stem from the deadly September 2010 San Bruno pipeline explosion, which raised questions about PG&E's maintenance of its natural gas pipeline network, record-keeping and how it responded to the disaster. PG&E plans to continue working with Sunnyvale-based Picarro, a startup whose gas leak detection technology is allowing PG&E to more quickly identify and repair gas leaks. Every report of a suspicious gas odor will be also be treated as an emergency response call.

Roughly $791 million would go to the electric side to pay for the cost of connecting new residential and business customers, replacing cables and station equipment and adding new transformers. The utility will also increase patrols and take other measures to mitigate wildfire risk.

PG&E has about 20,000 employees, but wants to hire 2,200 more dedicated to improving system safety, reliability and customer service. About 180 additional customer service representatives would be added to beef up staffing at the utility's various call centers.

"Currently, 80 percent of phone calls from customers are answered within 60 seconds," Bottorff said. "We want to improve that response time to 30 seconds."

PG&E uses a complex electrical rate plan with four levels, or tiers, of billing, which vary by region and season of the year. Tier 1, or baseline customers, use a minimum level of electricity. Customers are charged an increasingly higher rate as their electricity use rises above the baseline through tiers 2, 3 and 4. The more electricity you use, the higher rate you pay -- a system designed to reward energy conservation.

Customers can find out what tier they're in, how much electricity they use each month and the charges for it on their monthly PG&E bill, under the area marked "Electric Account Detail."

If approved, electric bills for the typical residential customer would increase about $5 a month, to about $95 a month. Natural gas bills for the typical residential customer would increase about $7 a month, to about $53 a month.

The proposed rate increase would also improve dam safety modifications at PG&E's hydroelectric facilities and implement new safety Nuclear Regulatory Commission regulations at the Diablo Canyon nuclear facility in San Luis Obispo County.

Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.