Ava Community Energy Marketing, Regulatory and Legislative Subcommittee
July 21, 2025

Understanding the Drivers of
PG&E Rate and Cost Growth
Claire Huang, Regulatory Analyst II
Michael Quiroz, Senior Regulatory & Data Analyst
Energy Consumption Has Remained Constant
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2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 GWh
Retail Sales, Self Generation, and Total Consumption in PG&E Service Territory Sales to end users Self generation Total consumption
• Self generation has grown significantly since 2012, primarily driven by rooftop solar capacity • Retail sales have decreased, leading to stability in total consumption • Rates driven by interplay of load composition, costs trends, and NEM policy Source: 2024 Baseline California Energy Demand Forecast, Form 1.1 and 1.1b. Last historical year is 2023 Rate Increases are Outpacing Inflation
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$0.45
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2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Volumetric Rate ($/kWh, 2024)
Inflation-Adjusted Volumetric Electric Rates by Customer Class Large industrial Residential CARE Residential non-CARE Small commercial Average Source: PG&E’s Annual Electric True-up Advice Letters, Revenue Allocation and Rate Design Tables • Rates gradually outpace inflation through 2020, then increase more rapidly 2021-2024 • Moderate year-over-year decrease in 2025 following spike in 2024 • Volumetric rate changes are generally consistent across customer classes T&D Capital Account Balances are Growing Substantially
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2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Billions of 2024 $
Inflation-Adjusted Balance of Capital Accounts
Distribution Generation Transmission
Source: PG&E’s FERC Form 1 filings, Electric Plant in Service schedule • Balance of capital accounts is a proxy for total capital costs left to be recovered • Year-over-year change reflects additions to rate base and reductions from depreciation/amortization • Linear growth in distribution and transmission accounts; generation peaks in 2018-2020 then falls Distribution Rates Rose Sharply from 2023 to 2024
Source: PG&E’s Annual Electric True-up Advice Letters, Revenue Allocation and Rate Design Tables $0.00
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2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Volumetric Price ($/kWh, 2024)
Bundled Residential Non-CARE Electric Rate Components
Generation Distribution Transmission Public Purpose Programs Other • Generation and transmission rate components gradually outpace inflation • Distribution component increases gradually and then spikes between 2023 and 2024 • Public purpose programs and other nonbypassable charges are relatively constant Distribution Costs Approved in GRCs are Increasing
Source: 2020 GRC Settlement Agreement, Decision on Test Year 2020 GRC, and Decision on Test Year 2023 GRC • Increase of $1.8 billion (46%) in average annual costs approved from 2020 GRC to 2023 GRC • Increased spending largely due to vegetation management and new wildfire cost categories • Inconsistent cost categorization between GRC cycles makes direct comparison difficult $-
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2020 2023
Billions of 2024 $
Average Annual Distribution Costs approved in 2020 and 2023 General Rate Cases Other Wildfire Risk Mitigations
Wildfire System Hardening
Other
Emergency Response and Repairs
Substation Capacity and Maintenance
Vegetation Management
Customer Interconnection and Asset Relocation
Overhead/Underground Asset Management
Breaking Down Wildfire Mitigation Costs in the 2023 GRC • Wildfire-related costs comprise 48% of PG&E’s approved distribution budget in the 2023 GRC • Vegetation management and undergrounding investments dominate over fast-trip settings Source: Decision on Test Year 2023 GRC
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Vegetation
Management
Undergrounding Overhead
hardening
Enhanced
Powerline
Safety Settings
Public Safety
Power Shutoff
IT & Forecasting Other
Billions of 2024 $
Wildfire-Related Costs Approved in PG&E's 2023 General Rate Case Key Takeaways
Rate and Cost Trends
• Generation, transmission, and distribution
costs/rates outpaced inflation from 2012-2024
• Distribution rates rose substantially from 2023-
2024, largely due to increased wildfire spending
▪ Annual approved distribution spending increased
46% from the 2020 GRC to the 2023 GRC
• Rates will likely continue to rise due to increasing
capital account balances, particularly for
distribution and transmission
Process Improvements
• Transparency and standardization: should be
easier for the public to understand and
interrogate costs/rates
▪ Many costs are “found reasonable” or approved by
CPUC but not addressed in the GRC Decision
Conclusions of Law
▪ Many costs are not directly stated in the decision
but buried in testimony and exhibits
• A significant portion of costs are uncontested by
other parties and approved as-is by CPUC