Glossary of Related Terms

Terms Related to Rates

Balancing Account:
Accounts used to maintain records of authorized costs and revenues. If energy sales and revenues are higher than expected and revenues are higher than planned (after allowing for any corresponding increases in authorized costs), the balancing account is said to be "overcollected," and the overcollection amount will be treated as a credit against authorized revenues when rates are established for the following year. Conversely, if sales and revenues are lower than expected and an associated balancing account remains undercollected at the end of a year, the undercollection amount will be added to PG&E's authorized revenue levels for the next year.

Baseline Quantity:
A minimum level of usage that is intended to satisfy a substantial portion of the energy needs of the average customer in a specific service area. Baseline quantities are set within a range specified by state law and implemented with the approval of the CPUC. Baseline quantities can vary depending on your location, the time of year (summer or winter), and your home' heating sources.

California Public Utilities Commission (CPUC):
A state regulatory body created to regulate investor-owned utilities, including PG&E. In addition to electricity and natural gas utilities, the CPUC also regulates telecommunications and water companies.

A process wherein the amount of profit the California Public Utilities Commission allows PG&E to make is separated from the amount of gas and electricity sold.

Federal Energy Regulatory Commission (FERC):
An independent regulatory agency within the United States Department of Energy that has jurisdiction over interstate electricity sales, wholesale electric rates, natural gas pricing, oil pipeline rates and gas pipeline certification.

General Rate Case:
An exhaustive regulatory review of PG&E’s operations and costs to establish the base revenues that are intended to cover our costs of distributing gas and electricity to customers and maintaining and operating our electric generation facilities. The GRC is required by the PUC and occurs typically every three years.

Investor-owned utility (IOU):
A privately-owned electric utility whose stock is publicly traded. It is rate regulated and authorized to achieve an allowed rate of return on capital that it has invested in the business in order to provide service to customers.

Publicly-owned utility (POU):
A nonprofit local government agency established to provide service to its community. Policy is developed and utility activities and rates are regulated by locally elected boards and/or city councils.

Rate Tiers:
Levels of energy usage that are priced beginning with Tier 1, the lowest, or baseline, usage level. Each increment, or tier, of use beyond the baseline level is charged at an increasingly higher price. The tiered structure was originally adopted by the State of California to provide a financial incentive for residential consumers to conserve energy.