A General Rate Case (GRC) is a state-mandated process that investor-owned electric and gas companies go through to request funding for distribution and generation costs. In California, regulated utilities like PG&E, Southern California Edison and San Diego Gas and Electric are typically required to file a new rate case every three years with the California Public Utilities Commission (CPUC).
The utility is required to provide a detailed forecast of how they will structure their operations and make investments for the upcoming three-year period. The CPUC reviews the information, with input from commission staff, customers, business groups, cities and agencies, and other special interest organizations before making a decision.
On September 1, 2015, PG&E submitted its GRC request to the CPUC. This filing outlines the proposals to fund new investments to support upgrades to technology and electric and gas infrastructure designed to improve the safety and reliability of energy distribution and generation services for the more than 6.3 million customers and their families that PG&E serves every day.
The GRC presents the company's plan for investments and upgrades to the technology and infrastructure supporting PG&E's energy distribution and generation facilities in 2017 through 2019. After PG&E submits the plan to the CPUC, the CPUC will review and analyze it. During this review process, the CPUC and interested parties can ask for more information from PG&E. The parties are then invited to provide their own testimony and to cross-examine PG&E's witnesses during hearings before an administrative law judge. Through this process, the CPUC determines what revenues are necessary to maintain and upgrade the electric and gas systems. The CPUC's decision forms the basis for PG&E customer rates.
In late 2015, one or more administrative law judges will be assigned to the case and will set the schedule for the remainder of the proceeding. PG&E expects that in early- to mid-2016 there will be public participation hearings where the public will be invited to provide comments on the GRC. Also around this time PG&E expects that PG&E witnesses and other parties will be called to testify before an administrative law judge regarding the case. For additional information about the case, please visit pge.com/grc.
This GRC will revise PG&E's rates for 2017 through 2019. The new rates will go into effect only after a final decision on the GRC is issued by the commission. PG&E has proposed that a final decision be issued in December 2016; however, past GRC decisions have been delayed into the year the new rates were to have taken effect.
The work outlined in this rate case reflects what we believe it will take to continue to make improvements to support the provision of safe and reliable energy to our more than 6.3 million customers and their families, support the incredibly diverse and growing economy represented in our nearly 70,000 square-mile service area, and to become the safest utility in the nation. If approved, this request (as updated on May 27, 2016) will increase PG&E's revenue requirement by $319 million in 2017, $469 million in 2018 and $368 million in 2019 for gas and electric service.
PG&E's typical residential customers currently pay less for energy each month than the average utility customer nationwide, and that will not change with this rate case. Under the plan PG&E has presented to the CPUC, a typical residential customer would see a less than 3 percent increase to their energy bill.
PG&E's proposal would increase a typical residential customer bill by $4 a month, which includes $3 per month for electricity and $1 a month for natural gas service. PG&E's typical bills would remain approximately 25 percent below the 2014 reported national average bill, according to the most recently available data.
This GRC will support safer and more reliable generation and distribution of energy over our 70,000 square-mile service area. It will enable the company to build upon its progress and achieve its ultimate goal to provide safe, reliable and clean electric and gas service to our customers.
The additional funding within PG&E's proposal would fund investments to support: