Learn the how and why of gas and electric rates


PG&E's electric and natural gas rates pay for a wide range of business operations. The electric rate helps pay for sending and receiving electricity, purchasing power and operating power plants. The natural gas rate helps us purchase natural gas and pay for pipelines. Both rates help fund public programs and provide a financial return for investors.

 

How rate changes work

PG&E typically consolidates changes to its electric rates two to three times a year to help limit the number of rate changes faced by our electric customers. PG&E changes its natural gas rates every month, as required by the California Public Utilities Commission (CPUC) to better reflect competitive monthly gas market costs. Whenever PG&E needs to make significant rate changes, it makes a proposal to the CPUC. PG&E's proposal is then reviewed in a public hearing process along with many stakeholder groups representing consumer, business, low-income, environmental, and agricultural interests among others. After this considerable review process, the CPUC then makes a decision on what is just and reasonable for customers to pay in rates after which PG&E reflects any change in rates as soon as possible.


PG&E files every three years for the CPUC to review revenues collected for its electric generation and distribution and natural gas distribution operations under its General Rate Case (GRC), and every four years to review its revenues collected for natural gas transmission and storage operations under its Gas Transmission and Storage Rate Case (GT&S). PG&E finished its 2014-2016 GRC in 2014 and is currently presenting its 2017-2019 GRC and 2015-2017 GT&S rate case before the CPUC.


Besides the CPUC, PG&E is regulated by the Federal Energy Regulatory Commission (FERC), which determines the utility's interstate transmission charges that make up about 10 percent of the revenues collected in electric rates. The remaining 90 percent are those revenues overseen by the CPUC.


Learn about decoupling

The CPUC oversees state utility companies and sets the amount of profit that each utility company 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. Electric sales can be higher than forecasted, for example, during periods of unusually hot weather. Sales 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 by actually encouraging customers to use less energy.


Check out ways to conserve energy. Visit Find Money Back Rebates for Your Business.


Learn how we work with the state to 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 help to maintain usage levels.


The CPUC oversees investor-owned utility (IOU) energy-efficiency programs. The agency establishes key policies and guidelines, sets program goals and approves spending levels.


Learn the how and why of gas and electric rates


PG&E's electric and natural gas rates pay for a wide range of business operations. Using energy more efficiently saves your business money on energy bills. Conservation 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, based on cumulative life-cycle savings.


Learn how we promote energy efficiency, provide clean energy solutions and fight climate change. Visit What We’re Doing.