PG&E’s General Rate Case 2014-2016
California’s gas and electric infrastructure must be improved and updated to maintain a safe and reliable energy supply. Safety and reliability in the energy supply are vital for quality of life and economic growth, and to keeping California an attractive state in which to live and work.
With this rate case, PG&E is requesting funding for new investments and improved operations to achieve significant gains in the safety and reliability of its electric generation, and electric and gas distribution services, during the years 2014-2016.
PG&E is asking the California Public Utilities Commission (CPUC) for an increase in funding of $1.28 billion in 2014 over currently authorized levels. PG&E asks for additional increases of about $500 million in 2015 and 2016 to account for additional infrastructure improvements, and increased costs of labor, materials, supplies and other expenses.
This new funding will enable the utility to accelerate the repair and replacement of gas pipes and electric lines, invest in new technology to improve safety and reliability and increase our field staff to provide improved customer service.
With this rate case, PG&E will acquire and deploy new technologies that will dramatically improve safety through better detection of gas leaks. The new leak detection technology will be 1,000 times more sensitive than previous tools. PG&E will also increase the replacement rate for older gas distribution lines from 30 miles to 180 miles per year.
With this rate case, PG&E will upgrade electric distribution infrastructure to improve safety, reduce outages, and restore service to customers more quickly using new technology, including SmartMeter™ devices.
With the 2014 rate case, PG&E is proposing a new public safety effort around electric generation facilities and enhanced emergency response preparedness. Among other items, initiatives will also include safety modifications for hydroelectric facilities to strengthen outlet structures and spill gates.
Customer service improvements will include increased staffing and expansion of Customer Contact Centers to increase speed in answering customer calls and shorten the wait for field response time. Importantly, every customer’s report of a suspicious gas odor will be treated as an emergency response call.
With this rate case and other important work going on at the utility, PG&E will move into a position of recognized national leadership among the very best utilities at providing safe, reliable and affordable energy to residential and business customers.
What is a General Rate Case?
A General Rate Case is the state-mandated process that 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 public input from customers, business groups, cities and agencies, and other special interest organizations before making a decision. As part of this rate case, for the first time, technical aspects of PG&E’s request (e.g., safety and security plans) will be reviewed by independent experts hired by the CPUC.
On November 15, 2012 PG&E submitted its GRC request to the CPUC. This follows the “Notice of Intent” that PG&E submitted in July 2012. That filing details the proposal to fund new investments in infrastructure, technology, people and operational changes designed to improve the safety and reliability of energy distribution services for the more than 15 million people PG&E serves every day.
For the very first time, the 2014 General Rate Case will be subject to a technical review and analysis conducted by independent experts hired by the CPUC. In addition to the independent experts’ review, PG&E will publicly report ongoing progress from 2014-2016 on objectives and commitments so that both the Commission and the public will know exactly how the utility is proceeding with the work proposed in this case.
Distribution not Transmission
The General Rate Case includes electric and gas distribution — the conveyance of energy within a community. It does not include gas or electric transmission or the cost of acquiring gas or electricity. Transmission includes the larger, higher voltage electric lines and the higher pressure gas lines.
What does this mean for me?
Right now, PG&E’s typical residential customer pays less for energy each month than average nationwide. That will not change. Even with the proposed funding from the GRC, the typical residential customer’s bill will remain lower than the national average.
The increased funding will be invested toward building a safer, more reliable energy distribution system that will enable PG&E’s customers to run their homes and businesses more efficiently. Read the FAQs regarding PG&E’s rate case. With this rate case and other important work that PG&E is doing to improve safety and reliability, the company will be among the leaders nationwide in providing safe, reliable and affordable power and delivering exceptional customer service.
The rate case will help keep the utility strong, as well as the communities served by PG&E and the state of California. An independent economic impact study found that this rate case would support roughly 39,000 jobs, and would generate an estimated $9 billion of positive economic impact per year.
PG&E’s request would generate an estimated $685 million per year in California state and local tax revenue as a consequence of the added worker income and business sales.
To understand in detail how rates are set, visit http://www.pge.com/myhome/myaccount/rateinfo/howratesset.