Rates Explainer

Delivering safe, reliable and clean energy at affordable prices

Providing safe, reliable, and clean energy is our most important responsibility. Providing this energy at a price everyone can afford is just as important.

Rate increases and changes in your rates and bills can be challenging. This information is intended to help answer questions about your energy costs.

What is being done to make rates and bills more affordable?

We are taking steps to manage our costs and make our energy service safer, cleaner, more reliable, and more affordable.

We're committed to managing costs for our customers by:

Reducing operation and maintenance costs by 2% every year (beginning in 2022).
Working more cost-efficiently for our customers, such as renegotiating construction contracts.

How we're working to lower customer bills

We're issuing the state's Climate Credit in April and October which is part of California's efforts to fight climate change.

Residential electric customers will receive a credit in April and October of $39.30 each, compared to last year's credit of $17.
Residential natural gas customers will receive a credit of $47.83 on their April bills, compared to last year's credit of $25.
Residential customers receiving both gas and electric service will see a combined bill credit in April of $87.13.

How we help our customers manage their energy use and costs

We're here to help you manage your energy use and costs. We provide resources including rate options, tools, and rebates to help you lower your energy usage and your monthly energy bill.

We offer our customer rate plan choices, payment options, energy efficiency financing and energy management tools.

We also offer financial assistance programs for our customers who are having a difficult time paying their monthly bill.

Automatically enrolling all residential and small business customers with past due balances over 60 days in new extended payment arrangements.
Relief for Energy Assistance through Community Help (REACH) offers one-time energy credit financial assistance to qualified customers with past due bills.
Low-Income Home Energy Assistance Program (LIHEAP) offers up to $1,000 to pay eligible household energy costs.
Arrearage Management Program (AMP) offers up to $8,000 in unpaid balance forgiveness, if a customer is enrolled in the California Alternate Rates for Energy (CARE) program or Family Electric Rate Assistance (FERA) program, owes a specific bill amount and is more than 90 days past due.

We have issued credits totaling $341 million to 350,000 PG&E customers from the state's California Arrearage Payment Program (CAPP) to help reduce past-due energy bill balances that increased during the COVID-19 pandemic.

We're also working with our partners on other ways to lower our customers' energy costs, like:

Pursuing federal funds to help offset some of the costs of making our infrastructure more climate resilient.
Advocating with our regulator and state lawmakers to reform how electric rates are designed to make energy bills more predictable, simplified, and affordable.

Why did my PG&E bill change?

Energy bills can go up or down for a variety of reasons. Many are beyond your control, like the weather, state regulations and commodity prices — the cost of purchasing gas and electricity is passed directly to our customers without any mark-up.

PG&E does not make more money when our customers use more gas or electricity. This is called decoupling. PG&E has no reason to encourage customers to use more energy because our profits do not come from the energy we sell. PG&E earns a profit on:

The cost of building infrastructure (like powerlines) that delivers energy,
How efficiently we run our business,
Lowering our customers' energy use.

There are a few things you can control that may affect your bill, such as:

The amount of energy you use
When you choose to use energy
Your rate plan
Enrolling in bill discount programs that you are eligible for

Higher natural gas prices and electricity market prices

The market price of natural gas continues to be higher around the world, causing higher bills for many customers. We buy and store gas at the lowest possible price from several sources. If the cost ever goes lower than what we paid, we pass on savings to you.

Natural gas market prices this past winter were about 90% higher in our service area than in the previous winter.
During the spring and summer months, natural gas usage tends to go down, so customers should see their gas bills decrease.
Electricity market prices have also increased due to higher natural gas market prices because natural gas is one source used to produce electricity.

PG&E takes steps to reduce the impact of unpredictable natural gas and electricity prices on our customers.

Natural gas

We use gas storage to buy natural gas during times of lower prices for use later.
We have pipeline access to many gas production basins to be able to access the lowest price for natural gas.
We buy natural gas at a pre-determined price, and if the cost goes lower than what we paid, we receive credits that are used to lower rates.

Electricity

We rely on a broad variety of electricity resources including natural gas, renewables like solar and wind, hydroelectric and nuclear power. This way, we are not dependent on one source of electricity.

Rate changes

PG&E gas and electric rates can change several times each year and increased overall in 2022. These increases were approved by the California Public Utilities Commission (CPUC), which regulates utilities like PG&E. These changes included increases in the cost of purchasing gas and electricity and maintaining PG&E's pipes and wires.

The money from these rate increases allows PG&E to fund critical investments and programs for customers that:

Make the electric grid and gas system safer and more reliable
Further reduce wildfire risk
Enable energy efficiency and renewable energy
Provide eligible, low-income customers with discounted energy bills

Who decides how much PG&E can charge?

The price of energy and all rates paid by customers are regulated and approved by public agencies including the California Public Utilities Commission (CPUC).

Utilities like PG&E must determine the revenue they need to serve customers safely and reliably and then propose what rate should be charged to recover that money from customers. Rates are set in formal proceedings that are open, transparent, and encourage public participation and comment.

Regulatory oversight

When PG&E needs to make any rate change, we submit an application to the CPUC. The application describes the upgrade required or a new program or service, along with the annual or multi-year costs and impact on rates.

Our application is reviewed in a public forum and by stakeholders such as groups representing residential and business consumers, low-income and community advocates, environmental groups, agricultural interests and others.
After this process, the CPUC issues a decision on the basis of what is just and reasonable for customers to pay in rates. PG&E then incorporates the approved changes into rates.

PG&E files every four years for the CPUC to review and authorize revenues collected for certain electric generation and distribution and natural gas transmission, storage and distribution operations costs.

That process is called the General Rate Case for electric and gas. In addition to the CPUC, the Federal Energy Regulatory Commission approves the retail electric transmission portion of rates.

What makes up my PG&E bill?

A typical residential electric bill includes:

Energy Cost—what we pay to produce and buy electricity from solar or wind providers and other power plants on behalf of our customers. These energy costs are passed directly to customers with no mark-up. This makes up about half of the bill.
Energy Delivery—operating and maintaining the electric system including power poles and powerlines, and associated equipment. This makes up a little less than half of the bill.
Public Purpose Programs—mandated by the state for greater societal good. Includes energy efficiency and low-income customer assistance. This makes up about 5–10% of the bill.

A typical residential gas bill includes:

Energy Cost—what we pay to buy natural gas on behalf of our customers. The cost is passed on directly to customers with no mark-up. This makes up about one-fifth of the bill.
Energy Delivery—operating and maintaining the gas system including infrastructure like natural gas pipelines that deliver gas to your home or business. This makes up most of the bill.
Public Purpose Programs—mandated by the state for the greater societal good, including programs for energy efficiency, renewable energy and low-income customer assistance. This makes up about 5-10% of the bill.

Weather and climate play a role in determining your bill. Energy usage is generally higher in warmer climates in the summer and in colder climates in the winter leading to seasonally higher bills.

Customers receive a baseline allowance or allotment of energy available at the lowest price, based on where they live, their heating source and the season (summer or winter).

Customers living in hotter areas receive more electricity at the lowest rate due to home and business-cooling needs, and customers living in colder winter climates receive more gas at the lowest rate for their heating needs. PG&E provides many programs and tips to help customers mitigate higher bills due to climate.

View a sample energy statement

View energy-related terms and definitions

Where does the money I pay PG&E go?

PG&E is investing in new technologies and modernizing the electric and gas systems so that our transition to clean energy can be safe, reliable, and affordable.

The money you pay:

Buys or generates some of the cleanest electricity in the country—93% comes from greenhouse gas-free sources.
Strengthens power poles and powerlines to improve safety and reliability by reducing the impacts of extreme weather and natural disasters.
Develops new energy efficiency programs to help you save energy.
Invests in new innovations, like battery storage and microgrids, so that you have access to clean energy when you need it most.

Safety

The threat of extreme weather and wildfires is real. PG&E's Community Wildfire Safety Program helps protect our communities from the risk of wildfires 365 days a year.

Keeping Californians safe is our most important responsibility, and we will continue to invest in our electric grid now and in the future, so that when extreme weather happens, we are ready for it.

Installed more than 1,300 weather stations and plans to install or optimize 100 more stations in 2022.
Installed 502 high-definition wildfire cameras and plans to add 98 more in 2022 to help detect, prevent and respond to wildfire risk.
Rebuilding the electric system from the underground up by placing 10,000 miles of distribution power lines underground in high fire-risk areas.
Continuing to install stronger power poles and covered power lines provide customers more protection from wildfires.
Implementing Enhanced Vegetation Management, which goes above and beyond regulatory requirements by:
- Expanding minimum vegetation clearances
- Removing overhanging branches
- Assessing strike potential trees in high fire-risk areas

Clean

California is leading the way to a cleaner energy future. Over 93% of our power is already greenhouse-gas-free.

There are more connected solar rooftops in PG&E’s service area than any energy company in America. And we're investing in the grid that makes widespread adoption of electric vehicles possible.
We're deploying more battery energy storage so that our customers can access clean and reliable renewable energy—even when the sun isn't shining or the wind isn't blowing, and at night.
PG&E has laid out plans to dramatically reduce emissions attributable to the company and its customers by 2030, reductions from its operations and energy delivery equivalent to taking more than 3.2 million passenger vehicles off the road for one year.

Innovation

California is the fifth largest economy in the world and a state of innovators and changemakers.

We're working with the world’s leading car manufacturers on an innovative program that will enable electric vehicles to become portable power plants for homes and businesses when the power is out.

Partnering with clean energy leaders, we built and are operating one of the world's largest battery storage facilities, so that you have access to energy when you need it.
Building microgrids which allow us to keep power on where it is safe to do so during power outages, as well as building remote grids so that even our most vulnerable communities can keep the lights on during extreme weather.

Reliability

Preparing the grid for new electric demand to support the growing and dynamic energy needs and desires of our customers, while helping our state reach its climate and clean energy goals.

To provide you with reliable electric service, we are:

Upgrading and modernizing the energy grid re-inspecting thousands of miles of powerlines, undergrounding 10,000 miles of electric lines in areas facing the highest fire risk, trimming dangerous vegetation even farther back from powerlines.
Working together with first responders and communities to protect the most vulnerable.

To serve our 4.6 million natural gas customers safely and reliably, we:

Operate a state-of-the-art 50,000-mile pipeline system.
Have extensively modernized our natural gas system. This includes the replacement of more than 2,000 miles of combined gas transmission and distribution pipeline, as well as the retirement of cast iron within our system.
Utilize advanced technologies, including Supervisory Control and Data Acquisition touch points, to monitor our system around the clock from our 24-hour Gas Control Center.

Economic development

In 2020—the 40-year anniversary of our Supplier Diversity Program—we invested $3.88 billion with diverse suppliers.

Our overall supplier diversity goal is 40% including 25% with minority-owned businesses through 2023.

As one of the largest employers in California with more than 24,000 employees working and living in your communities, we have a responsibility to help everyone thrive and prosper.

Our partnerships with small and diverse businesses increase economic opportunities in our hometowns while enhancing our service to our customers. Women, minority, service-disabled veterans, and LGBT-owned businesses play an important role in helping us deliver energy service to our customers.
Our network of economic development experts help businesses select the right location, evaluate real estate costs, availability, fees and taxes, find money-saving business solutions, answer questions about labor costs and supplies, and more.

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Answers to common questions about PG&E bills