Understanding decoupling

The California Public Utilities Commission (CPUC), oversees state utility companies. The CPUC sets the amount of profit that each utility can make. When this profit is separated from the amount of gas or electricity sold, it is called decoupling.

 

Even though decoupling separates sales from profits, it still allows PG&E some flexibility in revenues and rates based on actual sales. Sales can fluctuate from forecasts because of unexpected weather, economic activity or conservation. For example, electric sales can be higher than forecast sales during a period of unusually hot weather. They can also be lower than expected because of conservation efforts.

 

Our profits generally do not depend on how much energy we sell. Therefore, we have no reason to encourage customers to use more energy. We get incentives from the state to encourage customers to use less energy.

 

Find ways to save energy and money. Visit Rebates and incentives by business.

 

Save energy

California leads the way in energy efficiency programs. These programs date back to the 1970s and have been evolving ever since.

 

Over the past 30 years, per capita electricity use nearly doubled across the U.S. However, in California, the use has remained about the same for the past three decades. Energy efficiency programs and policies helped to maintain usage levels.

 

CPUC oversees investor-owned utilities’ energy efficiency programs. The agency establishes key policies and guidelines, sets program goals and approves spending levels.

 

California's 2010-2012 Energy Efficiency Plan set targets for the state’s four major electric and gas utilities. The plan called for 7 billion kilowatt-hour savings over a three-year period. The amount represented 0.9 percent of statewide electric usage.

 

Using energy more efficiently saves you money on energy bills. It is also the fastest, most cost-effective way to reduce greenhouse gas emissions and fight global climate change.

 

Since 1976, PG&E and our customers have kept more than 160 million tons of carbon dioxide (CO2) out of the atmosphere. This is based on cumulative lifecycle savings.

 

Learn how we’re promoting energy efficiency, providing clean energy solutions and fighting climate change. Visit What We’re Doing.

 

Understand related terms

The following terms are helpful in understanding how PG&E makes money.

 

Decoupling process. Process by which the amount of profit the CPUC allows us to make is separated from the amount of gas and electricity sold.

 

Investor-owned utility (IOU). Privately-owned electric utility that has publicly traded stock. The IOU is rate-regulated and authorized to achieve an allowed rate of return.

 

CPUC. Regulator of investor-owned utilities, including PG&E. The CPUC also regulates telecom and water companies.

 

View additional rate terms. Visit Common Rate Terms.