View the rate term glossary

Find definitions of rate terms to better understand your energy statement.

Understanding your energy statement can help you evaluate rate plans, usage and more. Following are commonly used terms and definitions to keep you in the know:


  • Balancing account: Account used to maintain records of authorized costs and revenues. Think of balancing accounts as a PG&E profit and loss sheet. When energy sales and income are higher than expected, the balancing account is overcollected. Overcollected amounts are used as a credit when rates are set for the following year. When energy sales and income are lower than expected, the balancing account is undercollected. Undercollected amounts are added to PG&E income levels for the next year.
  • Baseline quantity: A minimum level of gas or electricity that the average customer in a specific service area is estimated to use. Baseline quantities are set within a range specified by state law and put into place with the approval of the California Public Utility Commission (CPUC). Baseline quantities can vary depending on your location, the time of year and your heating source.
  • California Public Utility Commission (CPUC): A regulatory group created to oversee investor-owned utilities, including PG&E. In addition to electricity and natural gas utilities, the CPUC regulates telecommunications and water companies.
  • Climate zone: A PG&E service area section that shares similar geographic and weather qualities. Ten PG&E climate zones currently exist. Climate zones create the baseline quantity amounts to calculate energy charges.
  • Decoupling: A process that separates the amount of profit the CPUC allows PG&E to earn 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 legal control over interstate electricity sales, wholesale electric rates, natural gas pricing, oil pipeline rates and gas pipeline certification.
  • General Rate Case (GRC): A comprehensive regulatory review of PG&E operations and costs used to set base revenues. Base revenues are used to balance the costs to provide gas and electricity to customers and maintain and operate electric generation facilities. GRC is required by the Public Utility Commission (PUC) and typically occurs every three years.
  • Investor-owned utility (IOU): A privately owned electric utility with publically traded stock. An IOU has regulated rates and can earn a specified profit on capital invested in the IOU to provide and improve service.
  • Publicly-owned utility (POU): A nonprofit local government agency created to provide local utility services. Locally elected POU boards and/or city councils develop IOU policies and regulate activities and rates.
  • Rate tier: An energy usage level. Rate tiers start with Tier 1, which is the lowest, or baseline, usage level. Each tier after Tier 1 charges higher prices for usage. California originally adopted the tiered system to offer a financial incentive for residential customers to conserve energy.

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