FRIDAY AGGREGATE: PG&E Electric Rates; Slice-of-Day Impacts; Vehicle-to-Everything

Today's roundup covers:

• A PG&E advice letter executing a CPUC-approved unwind of a sizable 2025 ERRA overcollection, as routed through the 2026 Annual Electric True-Up to avoid mid-year rate volatility. This is an informational-only compliance filing, but it is useful for tracking PG&E's rate architecture.
• A PG&E Slice-of-Day compliance filing demonstrating how storage-backed Resource Adequacy value is translated into Power Charge Indifference Adjustment charges in 2026.
• The CPUC's December 2025 Resource Tracking Data. The data demonstrates that storage has moved from a supplemental resource to the central pillar of incremental capacity value, while solar’s contribution falls when viewed through a Net Qualifying Capacity lens.
• A proposed decision setting the framework for the Electric Program Investment Charge Program’s next investment cycle.
• Draft Resolution E-5434, which approves PG&E’s requests to extend and restructure Pilot #3 of its Vehicle-to-Everything (V2X) Microgrid Pilot at the Redwood Coast Airport Microgrid.

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PG&E ELECTRIC RATES

PG&E filed an advice letter to comply with a December 2025 CPUC decision approving its consolidated 2026 ERRA forecast and related trigger application. The decision required PG&E to show how the amortization of its 2025 ERRA trigger balance affected rates effective January 1, 2026.

PG&E explains that after its ERRA balancing account became significantly over-collected in mid-2025 (exceeding the Commission’s trigger thresholds) it proposed, and the CPUC approved, returning that overcollection through the 2026 Annual Electric True-Up rather than via a separate mid-year adjustment.

Consistent with the decision, PG&E transferred the forecasted 2025 ERRA overcollection into the Portfolio Allocation Balancing Account vintage-2025 subaccount. This produced a net reduction in Power Charge Indifference Adjustment rates for 2025-vintage customers, partially offset by their share of other PABA balances.

The advice letter provides updated rate tables showing the resulting PCIA rates by customer class and vintage (see table below).

The filing also includes updated average generation and public-policy procurement charges, reflecting the rates implemented January 1, 2026 after inclusion of year-end balancing account data.

Since this is an informational advice letter, there is no protest period.

INSTANT ANALYSIS: This filing is a mechanical compliance exercise, not a new policy move. PG&E is executing a CPUC-approved unwind of a sizable 2025 ERRA overcollection and routing it through the 2026 Annual Electric True-Up to avoid mid-year rate volatility. The practical effect is a temporary reduction in 2025-vintage PCIA rates, driven by the transfer of the ERRA overcollection into the PABA vintage-2025 subaccount, with that benefit partially offset by other PABA balances. No new cost recovery is authorized, no utility conduct is revisited, and no additional rate discretion is exercised. For most customers, this shows up as a modest PCIA adjustment embedded in January 1, 2026 rates rather than a visible refund, reinforcing the CPUC’s preference for smoothing commodity account corrections through annual true-ups instead of sharper, event-driven rate changes.

SLICE OF DAY/RESOURCE ADEQUACY

Separately, PG&E submitted Advice Letter 7820-E to comply with a December 2025 decision (D.25-12-027), demonstrating how it implemented the approved interim Slice-of-Day methodology in rates that took effect January 1, 2026.

The filing explains that, following a contested issue in PG&E’s consolidated 2026 ERRA proceeding, the Commission authorized PG&E to apply SCE's interim Slice-of-Day methodology for four-hour battery storage resources only, adjusting Net Qualifying Capacity to reflect that storage cannot deliver its full capacity across a 24-hour day.

PG&E states that it:

• Applied the adopted formula to all Power Charge Indifference Adjustment-eligible battery storage resources expected to be operational in 2026; and
• Incorporated the resulting retained RA values into its PCIA calculations, and reflected those adjustments in January 1, 2026 rates through its Annual Electric True-Up (AL 7797-E, summarized by CRI here).

PG&E Electric Rates for January 1, 2026

PG&E submitted AL 7797-E to implement consolidated electric rate and tariff updates effective January 1, 2026.

CALIFORNIA REGULATORY INTELLIGENCEMC

AL 7820-E includes confidential workpapers detailing resource-level capacity, round-trip efficiency, and resulting adjustments. Protests are due February 11.

INSTANT ANALYSIS: This advice letter is procedural, but it matters for how storage-backed Resource Adequacy value is translated into PCIA charges in 2026. By applying SCE’s interim Slice-of-Day discount to battery storage NQC, PG&E reduces the amount of retained RA credited to storage resources, which in turn affects the indifference calculation borne by departing load customers. The Commission already resolved the policy question in D.25-12-027, so the real risk here is not approval but scrutiny over implementation fidelity. Stakeholders focused on PCIA cost allocation, storage valuation, or RA accounting should view this filing as confirmation that the CPUC’s interim treatment of storage is now embedded in 2026 rates (and likely a preview of continued pressure to refine how multi-hour storage is valued relative to conventional capacity going forward).

INTEGRATED RESOURCE PLANNING

The CPUC distributed its December 2025 Resource Tracking Data, which provides a consolidated snapshot of how California’s resource mix has evolved since 2020 and what is contractually lined up through the end of the decade.

Between January 2020 and December 2025, about 31,000 MW of new reliability resources came online when imports are included, with about 28,700 MW located within the CAISO. The bulk of these additions are Senate Bill 100-eligible resources, dominated by battery storage, solar, and hybrid projects, while new natural gas capacity came predominantly from legacy projects in early 2020 (1,448 of 1,551 MW), with only 103 MW added across all subsequent years.

The data highlight a distinction between nameplate capacity and September Net Qualifying Capacity, particularly for solar, reinforcing that storage now provides a disproportionate share of incremental reliability value. As of year-end 2025, nearly 16,000 MW of storage is already online, and more than 20,000 MW of additional resources (primarily storage and solar) are under contract and expected to come online between 2026 and 2029.

CPUC staff emphasize that these figures are derived from CAISO and CPUC lists, reflect only resources under contract to jurisdictional load-serving entities, and do not map one-to-one with IRP compliance. However, they nonetheless serve as the Commission’s baseline view of recent buildout and near-term procurement commitments.

INSTANT ANALYSIS: This dataset shows how far California’s reliability strategy has already committed itself. Storage has moved from a supplemental resource to the central pillar of incremental capacity value, while solar’s contribution falls when viewed through an NQC lens. At the same time, the near-absence of post-2020 gas additions means future reliability debates will be fought almost entirely within a storage-heavy, transmission-constrained system. For CRI readers, the takeaway is that many upcoming Resource Adequacy, IRP, and reliability disputes are no longer about whether resources exist on paper, but about whether this mix performs as assumed during stress hours, and how much ratepayers are exposed if those assumptions fall short.

ELECTRIC PROGRAM INVESTMENT CHARGE

The CPUC issued a proposed decision in R.19-10-005 setting the framework for the Electric Program Investment Charge (EPIC) Program’s next investment cycle. The PD adopts 13 measurable Strategic Objectives that will guide "EPIC 5" investments from 2026 through 2030, translating previously adopted high-level goals into concrete, near-term targets.

• The PD authorizes PG&E, SCE, and SDG&E to continue serving as EPIC administrators for EPIC 5. The PD finds that the utilities have made sufficient progress on earlier administrative shortcomings, particularly in portfolio optimization, stakeholder engagement, and benefits quantification. The utilities are authorized to continue collecting rates to fund EPIC, with total annual funding of $185 million, largely administered by the California Energy Commission.
• The PD also refines EPIC intellectual-property rules. It allows waivers where EPIC-funded work is intentionally open-sourced, clarifies the treatment of pre-existing IP, and denies requests to waive state march-in or direct licensing rights for projects involving federal entities. The PD finds that SCE provided insufficient details to support a general waiver, though it acknowledges the issue exists and that CEC has addressed similar challenges with DOE recipients through entity-specific terms.
• In response to data gaps identified in the 2024 program evaluation, the PD orders a more comprehensive evaluation in 2028. That review is intended to strengthen accountability and inform whether EPIC should continue beyond its current 2030 sunset.

Finally, the PD extends the EPIC 5 investment plan application deadline to June 26, 2026. The extension reflects the added requirements associated with the new Strategic Objectives and program refinements.

Comments are due February 12. The earliest the CPUC will consider this item is February 26.

INSTANT ANALYSIS: This PD narrows EPIC’s focus rather than expanding its scope. By adopting 13 measurable Strategic Objectives, the Commission sets outcome-based expectations for EPIC 5, rather than emphasizing activity or spend.

• The decision to retain the IOUs as EPIC administrators is consequential. The PD accepts incremental improvement after earlier deficiencies, while shifting leverage to clearer objectives and a required 2028 evaluation.
• The intellectual property clarifications favor execution over theory. Open-source waivers reduce friction for software and data projects, while the denial of march-in and direct licensing waivers preserves a strong state backstop, though this may frustrate IOUs' efforts to partner with national laboratories on projects the PD acknowledges as potentially valuable.

Taken together, the PD positions EPIC as an implementation vehicle for affordability, electrification, and resilience. The real test will be whether the new objectives are used to shape, narrow, or reject EPIC 5 project proposals.

PG&E/ELECTRIC VEHICLES

The CPUC issued Draft Resolution E-5434, which approves (with modifications) PG&E’s requests to extend and restructure Pilot #3 of its Vehicle-to-Everything (V2X) Microgrid Pilot at the Redwood Coast Airport Microgrid.

The draft resolution grants PG&E additional time to complete Phase I testing and data collection, extending the deadline to June 30, 2026, after documented delays tied to Federal Aviation Administration funding, vendor instability, firmware issues, and charger damage during testing.

While Energy Division finds that Phase I has demonstrated meaningful technical progress (particularly in validating frequency-based controls for bidirectional EV charging) it also directs PG&E to explain how it intends to meet the original success metric of demonstrating five to 10 bidirectional EVs, given that only two vehicles are currently participating.

For Phase II, the draft resolution approves PG&E’s proposal to abandon the original customer-enrollment and incentive structure and instead adopt a Hybrid Support Model, under which PG&E will close enrollment, return approximately $750,000 in unspent incentive funds to ratepayers, and provide V2X technical consulting to Microgrid Incentive Program projects using non-pilot resources. Energy Division concludes that this approach reasonably adapts the pilot to current market and technology constraints while preserving lessons learned and protecting ratepayers from further costs.

The earliest the Commission will consider this item is February 26.

INSTANT ANALYSIS: This draft resolution marks a retreat from scale rather than a failure of the underlying technology. It allows PG&E to complete Phase I because the operational data remains valuable, but it refuses to extend a customer-facing incentive program that lacked viable sites, equipment, and timelines. By approving a pivot to a hybrid support model and requiring unused funds to be returned to ratepayers, the draft resolution reinforces a clear principle: experimental pilots must either produce usable evidence or wind down cleanly. For stakeholders, the message is that V2X and community microgrids remain conceptually supported, but the CPUC is no longer willing to finance prolonged demonstrations ahead of real-world readiness.