PG&E Files Rate Application to Allocate a Requested $5.3 Billion in Increased Revenues - Application Protests Due by May 17

by Best Best & Krieger LLP
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Last week, the Pacific Gas & Electric Company filed its General Rate Case Phase 2 Application with the California Public Utilities Commission (CPUC). The application requests that the CPUC approve new electric rates for PG&E’s customers for 2014 through 2016. The proposed rates will allocate costs among the utility’s different classes of customers. Rate changes to some customer classes are likely to be substantial as PG&E has requested a cumulative $5.3 billion in increased revenue in a related Phase 1 proceeding. Protests to the application are due by May 17. Public agencies wishing to protect their interests in this proceeding, as either individual customers of electricity or on behalf of their residents, should act soon.

As a CPUC-regulated utility, PG&E must receive CPUC approval before increasing or otherwise modifying its rates. Generally, utilities update their rates every three years through a “general rate case.” These cases are conducted in phases. Importantly, the first phase requests the total amount of the requested revenue increase. The second phase then determines how to allocate these increased revenues among the utility’s various customer classes.

Here, PG&E filed Phase 1 of its 2014-2016 General Rate Case in late 2012. The Phase 1 proceeding seeks approximately $5.33 billion in new revenues over the three-year rate cycle, an approximate 33 percent increase, with individual annual increases of $1.28 billion for 2014, an additional $492 million for 2015 and another $504 million for 2016. The Phase 1 proceeding is on-going.

On April 18, 2013, PG&E filed Phase 2 of the rate case. This phase is in many ways more important for different classes of customers because if a customer class is not adequately represented in the proceeding, it may disproportionately bear the weight of the increases.

The deadline to protest the Phase 2 application is May 17, 2013. If you wish to participate in the proceeding, BB&K is able to assist your agency. For example, BB&K is currently representing a coalition of water and school districts in a San Diego Gas & Electric rate proceeding. In that proceeding, SDG&E has proposed rate structures that disproportionately affect public agency customers with solar generation projects. We believe that the coalition’s participation in the SDG&E proceeding will protect the agencies’ investment in these projects.

For more details regarding the PG&E proceeding, or if you wish to participate individually or through a coalition of BB&K clients, please contact Jason Ackerman, Joshua Nelson or your BB&K attorney.

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