SAN BRUNO -- PG&E ratepayers will receive slightly reduced bills for natural gas, starting next year, the utility said Tuesday, because of lower-than-expected expenses for a pipeline safety improvement program undertaken in the wake of a fatal explosion in San Bruno nearly four years ago.

In a new regulatory filing, the utility said it expects a reduced expenditure -- and less revenue required from ratepayers -- for what is called the utility's Pipeline Safety Enhancement Program, or PSEP. The state Public Utilities Commission would have to approve the proposal.

San Francisco-based PG&E, the PUC's Office of Ratepayer Advocates and The Utility Reform Network, a consumer group, had been engaged in a dispute about the amount of revenue PG&E would require from ratepayers. The three parties have settled their dispute and jointly filed a proposal for the reduced revenue requirements.

"The settlement, if approved this year, would lower average residential bills next year a little more than 1 percent, between 50 and 60 cents a month," said Greg Snapper, a spokesman for PG&E. But other cases pending before the PUC could have unforeseen effects on gas and electricity rates, he added.

The average residential natural gas bill at present is $44.56 a month, though rates oscillate greatly because of peak demand for gas usage during the cold winter months.


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The utility's original proposal had required $299 million in revenue from ratepayers for the pipeline safety and upgrade effort, but that was lowered to $223 million in the latest proposal.

PG&E will undertake less pipeline work than it had first proposed, according to the regulatory filing. From 2011 through 2014, it will have replaced about 143 miles of natural gas pipeline, less than the original proposal of 185.7 miles. The utility also will undertake high-pressure strength tests on 658.1 miles of pipeline, down from the original plan of 783 miles.

The new proposal comes before a soon-to-be disclosed proposed punishment for the utility by the PUC that could be as high as $2.25 billion.

In addition, PG&E faces criminal charges, including an allegation of obstruction of justice, in a separate federal felony case that could result in a fine of up to $1.13 billion.

"The lower rates are welcome, but the big problem is PG&E is trying to use customers' fears of its incompetence to justify rate hikes," said Mindy Spatt, a TURN spokeswoman. "We don't want PG&E to shirk its responsibility to maintain a safe gas and electricity system. But customers should not be held responsible for PG&E's mistakes."

Contact George Avalos at 408-859-5167. Follow him at Twitter.com/georgeavalos.