OAKLAND — PG&E’s plan to use green energy to replace the electricity from an aging Oakland power plant near Jack London Square might lead to higher monthly bills for the embattled utility’s customers, PG&E indicated Wednesday.

The utility has crafted a plan to launch a green-energy initiative in two Oakland neighborhoods to replace the old energy facility, which runs on jet fuel.

The proposal to replace the Oakland power plant with clean energy must be approved by the California Independent System Operator.

“PG&E is also required by law to file for cost recovery with the Federal Energy Regulatory Commission and the California Public Utilities Commission,” the utility said as part of its announcement about the Oakland green-energy efforts.

Cost-recovery efforts can lead to higher rates for PG&E customers.

“The plan will likely grow PG&E’s profits, and how it will impact customers and the community remains to be seen,” said Mindy Spatt, a spokeswoman with The Utility Reform Network, a consumer group. “We don’t want green energy to become a new profit center for PG&E. Clean energy should be a community resource. The effort is certainly laudable, however. No one will be sorry to see the Dynegy plant go.”

PG&E spokeswoman Jennifer Robison declined to say whether higher monthly bills might result from the Oakland clean-energy efforts. Robison instead referred to the language that PG&E is obliged to file cost-recovery proposals with FERC and the state PUC. Those proposals are due to be filed by the end of 2018.

In a report issued earlier this year, a group that included PG&E analyzed the long-term viability of power production in western and downtown Oakland if the power plant, owned by Dynegy, is retired.

“PG&E has determined the viability of an innovative solution set that would replace the power plant’s energy supply with a portfolio of local distributed energy resources, such as solar, battery storage, demand response, etc., to meet reliability needs in this area,” the Rocky Mountain Institute stated in the report.

The Dynegy Oakland complex is located at 50 Martin Luther King Jr. Way and opened in 1978.

Three 55-megawatt units at Dynegy’s Oakland plant will be needed through 2018 to ensure reliability in the Oakland area, the California Independent System Operator has determined. A long-term replacement of that power is the key concern.

Skeptics in recent years have criticized PG&E for seeking to recover money from ratepayers, after a fatal explosion in San Bruno, for repairs and upgrades that critics believe should have been instituted prior to the deadly blast.

During a Nov. 2 conference call with analysts to discuss PG&E’s third-quarter financial results, PG&E’s Chief Executive Officer Geisha Williams warned that the utility’s customers could face higher monthly bills if the company’s insurance doesn’t cover all of its costs from wildfires that torched the North Bay Wine Country and nearby regions.

“Our costs over and above insurance coverage should be shared by all customers,” Williams told analysts.

TURN officials said they would do all they could to ensure that ratepayers aren’t charged unfairly for PG&E’s green initiative in Oakland.