July 2008 Bill Inserts

Each month, PG&E offers important information on rebates, saving energy and safety in printed inserts that accompany your bill. Now, access this information online whenever you wish.

Save Energy. Save Money.
PG&E offers a variety of rebates and incentives for your home or business.

Notification of Filing of PG&E's Application for Approval of Its 2009–2011 Demand Response Programs and Budget

The California Public Utilities Commission (CPUC) requires PG&E to file an application for approval of its Demand Response Programs and Budget. PG&E filed an application on June 2, 2008, requesting said approval.

What are Demand Response Programs?

Demand response programs increase electric reliability and reduce PG&E's total power purchase costs by motivating electric customers to reduce electric usage during high-demand, or peak usage, periods and/or shift electric usage to other periods when electric demand is lower.

PG&E's Application proposes a total demand response related revenue1 requirement of $148.4 million2 ($48.9 million in 2009; $49.5 million in 2010; and $50.0 million in 2011.) PG&E proposes to recover these costs in electric distribution rates from both bundled and direct access customers. The annual revenue requirement increase (as compared to the 2008 revenue requirement) is approximately $10.1 million. Bundled customers are customers who receive electric generation as well as transmission and distribution service from PG&E. Direct Access customers are customers who receive transmission and distribution service from PG&E, but purchase electric generation service from third-party energy service providers.

Will Electric Rates Increase if the Application is Approved?

Yes. Approval of PG&E's proposed 2009-2011 demand response program revenue requirement will increase electric distribution rates paid by all electric bundled and direct access customers. PG&E expects any rate changes associated with its Application will be consolidated with electric rate changes in other CPUC proceedings. The eventual net change in rates is difficult to predict. Absent other electric rate changes, PG&E's revenue requirement request resulting from this Application would increase average bundled electric rates less than approximately 0.1 percent and would not have a significant impact on individual customers' rates.

THE CPUC PROCESS

The CPUC's independent Division of Ratepayer Advocates (DRA) will review this Application, analyze the proposal and present an independent analysis and recommendations for the CPUC's consideration. Other parties of record will also participate.

The CPUC may hold evidentiary hearings where parties of record present their proposals in testimony and are subject to cross-examination before an Administrative Law Judge (ALJ). These hearings are open to the public, but only those who are parties of record are allowed to present evidence or cross-examine witnesses during evidentiary hearings.

After considering all proposals and evidence presented during the hearing process, the ALJ will issue a draft decision. When the CPUC acts on this Application, it may adopt all or part of PG&E's request, amend or modify it or deny the Application. The CPUC's final decision may be different from PG&E's proposed Application.

FOR FURTHER INFORMATION

For more details call PG&E at 1-800-PGE-5000

You may contact the CPUC's Public Advisor with comments or questions as follows:
Public Advisor's Office
505 Van Ness Avenue, Room 2103
San Francisco, CA 94102
1-415-703-2074 or 1-866-849-8390 (toll free)
TTY 1-415-703-5282, TTY 1-866-836-7825 (toll free)
E-mail to public.advisor@cpuc.ca.gov

If you are writing a letter to the Public Advisor's Office, please include the name of the application to which you are referring. All comments will be circulated to the Commissioners, the assigned Administrative Law Judge and the Energy Division staff.

Notification of Applications by Pacific Gas and Electric Company (PG&E) to Recover Increased Procurement Costs for the Remainder of 2008 and Forecast 2009

Each year, PG&E is required to forecast how much it will spend the following year to ensure adequate electricity supplies for its customers, and this forecast is reviewed and approved by the California Public Utilities Commission (CPUC). In addition, under California law, if PG&E's power procurement costs (that is, the costs of purchasing electricity for PG&E's customers) exceed the CPUC-authorized revenues by 5% or more, PG&E must file an application for expedited recovery of such costs. PG&E recovers these costs dollar-for-dollar through rates charged to customers, with no profit margin.

On June 10, 2008, PG&E submitted two separate applications with the CPUC to recover its power procurement costs. The first application (A.08-06-010) forecasts that by December 31, 2008, PG&E's power procurement costs will exceed its CPUC-authorized revenues by $482 million. This increase in procurement costs is due to higher-than-expected natural gas and electricity prices, lower-than-expected precipitation and higher-than-expected electricity sales. PG&E requests that this increase in power procurement costs be collected from customers over a 15-month period beginning October 1, 2008.

The second application (A.08-06-011) requests that the CPUC approve PG&E's forecast of its power procurement costs for 2009. PG&E's expected costs of electricity needed to serve its customers is $4,924 million. PG&E requests that the electric rates designed to recover this amount become effective on or after January 1, 2009.

Does this mean electricity will cost me more?

Yes, PG&E's requests in the two applications will increase rates. However, the increase in rates is directly attributable to the higher costs that PG&E must pay to provide electricity to its customers; PG&E does not receive a profit margin from these increased rates or costs.

What impact will A.08-06-010 have on my electric bills?

PG&E's request in A.08-06-010 will increase total electric procurement rates by $482 million, to be collected from customers over 15 months beginning October 1, 2008. If the application is approved by the CPUC, rates for bundled customers (those who receive electric generation, transmission, and distribution service from PG&E) will increase by $482 million, or 4.5 percent on average, compared to current rates. In general, rates for direct access customers (those who purchase their electricity from a non-utility supplier) will not be subject to change. In addition, PG&E expects that rates to departing load customers (who receive electric generation from a non-utility supplier, as well as transmission and distribution service from a publicly-owned utility) will be unchanged.

The rate changes by customer class for bundled customers and direct access customers associated solely with A.08-06-010 are provided in the table below.

Pacific Gas and Electric Company Application 08-06-010 Illustrative Revenue Increase and Class Average Rates

(Dollars in Thousands)

Customer Class Proposed Revenue Increase Percentage Change
Bundled Service
Residential
$192,992
4.1%
Small Commercial
$55,799
3.9%
Medium Commercial
$89,593
4.9%
Large Commercial
$52,715
5.2%
Streetlights
$2,247
3.5%
Standby
$1,216
4.2%
Agriculture
$22,273
4.0%
Industrial
$65,579
5.7%
Total Bundled Change
$482,415
4.5%
Direct Access Service
Residential
$7
0.2%
Small Commercial
$0
0.0%
Medium Commercial
$0
0.0%
Large Commercial
$0
0.0%
Agriculture
$0
0.0%
Industrial
$0
0.0%
Total Direct Access Change
$7
0.0%

If the Commission approves PG&E's application, a typical residential customer using 550 kilowatt-hours per month will see the monthly bill change from $72.13 to $73.08, an increase of $0.95 per month. A residential customer using 850 kilowatt-hours per month, which is about twice the baseline allowance, will see the monthly bill change from $148.44 to $155.67, an increase of $7.23 per month. Individual bills may differ.

What impact will A.08-06-011 have on my electric bills?
PG&E's request in A.08-06-011 proposes a total electric procurement forecast of $4,924 million, to be collected from customers over the 12 months of 2009. If the application is approved by the CPUC, rates for bundled customers will increase by $681 million, or 6.1 percent on average, and rates for direct access customers will decrease by $0.2 million, or -0.1 percent on average compared to current rates. In addition, PG&E expects to decrease rates to departing load customers by approximately $1 million.

The rate changes by customer class for bundled customers and direct access customers associated with A.08-06-011 are provided in the table on the next page. Please note that, due to CPUC requirements, the rate changes shown in that table are compared to current rates, not the rates that will actually be in effect on December 31, 2008. In other words, if PG&E's request in A.08-06-010 (described above) is granted, the percentage rate change on January 1, 2009, from A.08-06-011 will be less than those shown in the table on the next page, amounting to a change of less than two percent on a bundled average basis over the rates projected to be in effect this October.

Pacific Gas and Electric Company Application 08-06-011 Illustrative Revenue Increase and Class Average Rates
(Dollars in Thousands)

Customer Class Proposed Revenue Increase Percentage Change
Bundled Service
Residential
$263,620
5.5%
Small Commercial
$79,486
5.4%
Medium Commercial
$130,402
6.6%
Large Commercial
$73,984
7.1%
Streetlights
$3,053
4.7%
Standby
$1,634
5.6%
Agriculture
$31,915
5.4%
Industrial
$96,598
7.9%
Total Bundled Change
$680,692
6.1%
Direct Access Service
Residential
-$27
-0.9%
Small Commercial
-$6
-0.1%
Medium Commercial
$0
0.0%
Large Commercial
-$49
-0.1%
Agriculture
$0
0.0%
Industrial
-$72
-0.1%
Total Direct Access Change
-$154
-0.1%

If the Commission approves PG&E's application, a typical residential customer using 550 kilowatt-hours per month will see the monthly bill change from $72.13 to $73.43, an increase of $1.30 per month. A residential customer using 850 kilowatt-hours per month, which is about twice the baseline allowance, will see the monthly bill change from $148.44 to $158.33, an increase of $9.89 per month. Individual bills may differ.

THE CPUC PROCESS

The CPUC's Independent Division of Ratepayer Advocates (DRA) will review these applications, analyze the proposals and present an independent analysis and recommendations for the CPUC's consideration. Other parties will also participate.

The CPUC may hold evidentiary hearings where parties of record present their proposals in testimony and are subject to cross-examination before an Administrative Law Judge (ALJ). These hearings are open to the public, but only those who are parties of record are allowed to present evidence or cross-examine witnesses during evidentiary hearings.

After considering all proposals and evidence presented during the hearing process, the CPUC will issue a draft decision for each of the applications. When the CPUC acts on these applications, it may adopt all or part of PG&E's requests, amend or modify them or deny the applications. The CPUC's final decisions may be different from PG&E's proposals.

FOR FURTHER INFORMATION

For more details call PG&E at 1-800-PGE-5000

You may contact the CPUC's Public Advisor with comments or questions as follows:
Public Advisor's Office
505 Van Ness Avenue, Room 2103
San Francisco, CA 94102
1-415-703-2074 or 1-866-849-8390 (toll free)
TTY 1-415-703-5282, TTY 1-866-836-7825 (toll free)
E-mail to public.advisor@cpuc.ca.gov

If you are writing a letter to the Public Advisor's Office, please include the number of the application to which you are referring (08-06-010 or 08-06-011). All comments will be circulated to the Commissioners, the assigned Administrative Law Judge and the Energy Division staff.

Proposition 65—Public Warning

The Safe Drinking Water and Toxic Enforcement Act of 1986, commonly referred to as Proposition 65, requires the governor to publish a list of chemicals “known to the State of California” to cause cancer, birth defects or other reproductive harm. It also requires California businesses to warn the public quarterly of potential exposures to these chemicals which result from their operations.

Pacific Gas and Electric Company uses chemicals in its operations that are “known to the State of California” to cause cancer, birth defects or other reproductive harm.

For example, Pacific Gas and Electric Company uses natural gas and petroleum products in its operations. Pacific Gas and Electric Company also delivers natural gas to its customers. Petroleum products, natural gas, and their combustion by-products contain chemicals “known to the State of California” to cause cancer, birth defects or other reproductive harm.

A warning odorant is added to natural gas so that leaks of unburned gas can be quickly detected. If gas odor is detected, Pacific Gas and Electric Company should be contacted promptly.

Pacific Gas and Electric Company provides a free service to check and adjust your home gas appliances. Please call 1-800-PGE-5000 if you would like your gas appliances checked.

For additional information on this Proposition 65 warning, write to Pacific Gas and Electric Company, Prop. 65 Coordinator, 77 Beale Street B23H, PO Box 770000, San Francisco, CA 94177.

FOR OUR NATURAL GAS CUSTOMERS: For Your Safety…

Inspection and Maintenance of Customer-Owned, Buried Natural Gas Piping

If you are a Pacific Gas and Electric Company natural gas customer, you should be aware of this important gas safety information.

Pacific Gas and Electric Company is committed to providing safe, reliable natural gas service. We maintain all our gas lines in accordance with U.S. Department of Transportation and California Public Utilities Commission pipeline safety regulations.

As a natural gas pipeline operator, Pacific Gas and Electric Company is required by federal law to notify all customers of the following:

* Customer-owned, buried natural gas piping should be inspected periodically for leaks and, if the piping is metallic, also for corrosion. Examples of this piping are any buried piping from the gas service delivery location to your house or appliances, or from the house to a swimming pool heater or spa.
* If any gas leaks or evidence of corrosion to metallic piping are found, you should take immediate steps to correct it.
* When digging near buried gas piping, locate the piping in advance, and dig by hand.

Contact a certified plumbing contractor in your area to help you locate and inspect your BURIED gas piping. Call 811 to locate underground utility-owned facilities. If you have questions about this notice, call Pacific Gas and Electric Company at 1-800-743-5000.

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