December 18 CPUC Voting Meeting Results: Cost of Capital; Long-Term Gas Planning; Woolsey Fire

The Commission closed out the year with a wide-ranging package spanning utility finance, wildfire cost recovery, affordability governance, gas transition implementation, procurement, and distribution-planning reform.

Note: the following decisions were delayed until January 15 (no reasons were given).

• SDG&E Wildfire Mitigation Costs: This proposed decision addresses SDG&E’s request to recover wildfire-mitigation costs recorded in its Wildfire Mitigation Plan Memorandum Accounts from May 2019 through 2022. SDG&E sought approval to recover more than $1.47 billion in wildfire-mitigation spending from 2019–2022, but the PD disallows $192.6 million in O&M and $242.4 million in capital due to insufficient justification and cost-effectiveness concerns.
• Bioenergy Market Adjusting Tariff: This proposed decision denies a petition for modification filed by the Bioenergy Association of California to modify a 2020 CPUC decision (D.20-08-043), which had extended the Bioenergy Market Adjusting Tariff program through December 31, 2025.
• Union Island Pipeline: This proposed decision denies a request of California Resources Production Corporation for a Certificate of Public Convenience and Necessity to operate the 35-mile Union Island natural gas pipeline as a public utility gas corporation. The PD concludes that the company no longer holds valid franchise rights in Antioch and Brentwood and ceased transporting gas in 2023.

COST of CAPITAL DECISION

This decision sets the authorized test-year 2026 cost of capital for PG&E, SoCalGas, SCE, and SDG&E, largely maintaining continuity with prior authorizations while rejecting utility requests for higher equity layers or structural adjustments.

The decision adopts a uniform 52% common-equity ratio for all four utilities, denies proposals to increase leverage or eliminate preferred equity, and concludes that existing capital structures remain sufficient to support investment-grade credit ratings without imposing unnecessary costs on ratepayers.

Authorized returns on common equity are set at: