2027 ERRA Forecasts: SCE Procurement Costs Fall, Yet Bills Edge Higher; PG&E Projects 5.7% Bundled Increase

PG&E and SCE filed their 2027 Energy Resource Recovery Account Forecast applications with the CPUC on May 15. Neither filing is final. October updates will incorporate updated forecast assumptions, year-end balancing account data, and intervening Commission decisions.

A major variable is the CPUC's pending September 17 decision in the ERRA/PCIA Reform docket (R.25-02-005), which asks whether pre-2019 banked Renewable Energy Credits should carry a value greater than zero when used for bundled service customer compliance under the Power Charge Indifference Adjustment. That decision will flow directly into the fall updates.

PG&E's 2027 ERRA Forecast

PG&E requests a $4.409 billion total procurement-related revenue requirement for 2027. Bundled customers are forecast to see rates rise 5.7%, from 33.8 cents/kWh to 35.7 cents/kWh. Direct Access and Community Choice Aggregation customers move in the opposite direction, with average rates forecast to decline 7.3%, from 23.4 cents/kWh to 21.7 cents/kWh. The primary driver is a declining PCIA obligation; DA and CCA customers pay cost-responsibility surcharges rather than bundled energy procurement costs, and the PCIA component is forecast lower. PG&E projects a $530 million net greenhouse gas revenue return, producing a $41.74 semiannual California Climate Credit.

Below are PG&E's illustrative rates.

SCE's 2027 ERRA Forecast

SCE requests $4.350 billion, approximately $360.7 million below the revenue requirement reflected in current rates, yet customer bills will still rise. SCE acknowledges that this outcome appears counterintuitive. The disconnect between a lower procurement-related revenue requirement and higher rates stems from how costs are allocated in supporting rate calculations. Edison forecasts an overall 1.8% rate increase, including 1.2% for residential customers. A typical non-CARE residential customer using 500 kWh per month would see a monthly bill rise from $187.56 to $189.76, excluding the semiannual California Climate Credit. SCE's greenhouse gas revenue return totals approximately $616.7 million, producing a projected $54 semiannual Climate Credit.

Below are SCE's illustrative rates.

Mid-Term Reliability procurement, Central Procurement Entity local RA obligations, Voluntary Allocation and Market Offer implementation, greenhouse gas crediting, tree-mortality charges, and BioMAT all continue moving through the annual ERRA framework. What began as an electric procurement proceeding increasingly functions as a recovery vehicle for policy-era obligations adopted in other dockets. For large customers, ESPs, and PCIA-sensitive interests, cost-allocation vigilance remains warranted

INSTANT ANALYSIS: The October updates matter more than the May applications. Commodity prices, RA costs, balancing account swings, and the REC-valuation decision in R.25-02-005 all remain capable of moving the numbers before January 1 implementation.