PG&E Proposes Significant Rates Increases for Agricultural, Commercial, and Industrial Customers

Public Utility Regulation  

February 18, 2022

PG&E intends to increase average electric rates for its agricultural, commercial, and industrial customers between 7 and 25 percent starting in 2023, with a corresponding increase in average gas rates of up to approximately 4 percent.  PG&E proposed these increases as part of its current general rate case filed with the California Public Utilities Commission (CPUC), which will set PG&E’s base rates for the period from 2023 to 2026.  The sizeable rate increases are the result of PG&E’s historic request for an additional $3.56 billion in revenue, bringing its total authorized revenue requirement to $15.46 billion.

PG&E’s wildfire mitigation activities, which include upgrading overhead infrastructure and conducting aggressive vegetation management, account for approximately half of the requested revenue increase.  PG&E plans to invest approximately $7.4 billion to reduce wildfire risk on its electric distribution system alone in the 2023–2026 period.   PG&E also intends to expand its natural gas storage holdings, and must fund the continued operation of the Diablo Canyon Nuclear Power Plant until it shuts down in mid-2025.

After the initial rate increase in 2023, PG&E proposes that rates for all customers increase again by 2.5 percent in 2024, 1.5 percent in 2025, and 0.4 percent in 2026.

PG&E’s calculations for the impacts of its proposed revenue increase are shown below.[1]  The electric rates are separated into “bundled” customers, who purchase their electricity from PG&E, and customers who purchase their electricity from Community Choice Aggregators (CCAs) or Direct Access (DA) providers; all CCA and DA customers receive electricity via PG&E’s infrastructure and therefore pay for those costs.

PG&E currently anticipates a final order from the CPUC in the third quarter of 2023.  It is common for the stakeholders in general rate case proceedings to reach settlement with PG&E on specific proposals, and it is expected that the CPUC will authorize less revenue than PG&E’s full request.  Even with a reduction in approved revenue, however, PG&E will still impose sizeable rate increases on its customers in the coming year.

What You Can Do

Agricultural, commercial, and industrial ratepayers in PG&E’s service territory should consider working with their trade associations to participate in the CPUC proceeding to advocate for reduced rate impacts.  Participation at the CPUC may include submitting expert testimony and negotiating directly with PG&E.

Please feel free to contact Megan Somogyi or the Downey Brand attorney you regularly work with for additional information.

[1] The current and proposed rates are average rates across all tariffs for a particular customer class; more granular information for specific rate schedules is available.

Electric Rate Increases

Customer Class Current Rate
Proposed Rate
% Increase
Agricultural – Bundled 24.95 29.63 18.7%
Agricultural – CCA or DA 16.94 20.90 23.4%
Small C&I – Bundled 27.35 32.39 18.4%
Small C&I – CCA or DA 20.31 25.34 24.8%
Medium C&I – Bundled 24.17 27.40 13.4%
Medium C&I – CCA or DA 16.75 20.00 19.4%
Large C&I – Bundled 15.94 17.08 7.2%
Large C&I – CCA or DA 8.48 9.67 14%

Natural Gas Rate Increases

Customer Class Current Rate
Proposed Rate
% Increase
Small Commercial – Bundled 13.114 13.131 0.1%
Large Commercial – Bundled 9.352 9.370 0.2%
Small Commercial – core transportation-only 9.553 9.595 0.4%
Large Commercial – core transportation-only 6.164 6.188 0.4%
Industrial – noncore transportation-only distribution 5.204 5.304 1.9%
Industrial – noncore transportation-only transmission 2.686 2.785 3.7%
Industrial – noncore transportation-only backbone 1.499 1.508 0.6%