FRIDAY AGGREGATE: PG&E's CARD Filing; Rule 30; Rate Design

PG&E dominates today's roundup. The utility's 2027 Gas CARD application drew immediate, broad-based resistance from consumer advocates, generators, and large customers, not regarding rates but over the structure of the proceeding itself.

Meanwhile, an ALJ reopened the record on Rule 30 transmission-level service, reflecting CPUC discomfort with finalizing large-load cost allocation without better evidence on cost causation.

Elsewhere: a schedule is provided for the dynamic pricing track of PG&E's GRC Phase 2, Cal Advocates' distribution upgrade cost study enters the DER record, SoCalGas files for approval of interstate capacity contracts, and a group challenges the CPUC's December 2025 decision in the Diablo Canyon cost-recovery proceeding.

PG&E Natural Gas Rates

On January 7, a broad cross-section of stakeholders responded to PG&E’s 2027 Gas Cost Allocation and Rate Design (CARD) application (A.25-11-006), reflecting shared concern about both substance and process in what is the first-ever combined Gas Cost Allocation Proceeding and Gas Transmission & Storage case.

• Small Business Utility Advocates emphasized protecting small commercial customers from disproportionate cost shifts, over-building of gas infrastructure, and adverse environmental and social impacts, while reserving judgment pending deeper analysis.
• Public power and generation interests, including the Northern California Generation Coalition and Vistra-affiliated generators (Moss Landing and Greenleaf):
  • Highlight potential increases to electric-generation allocations;
  • Question PG&E’s gas demand and throughput forecasts in light of electrification trends and evolving large-load assumptions;
  • Oppose retention of fully volumetric rate designs for generators; and
  • Raise concerns about local transmission cost allocation and inventory management studies.

Consumer advocates (Cal Advocates and TURN) formally protested, laying out an expansive scope of technical and policy issues ranging from:

• PG&E’s proposed shift from marginal-cost to embedded-cost allocation;
• Backbone segmentation and rate differentials;
• Storage portfolio changes;
• Minimum monthly transportation charge increases; and
• Fixed-charge concepts.

They also argue that PG&E’s forecasts, workpapers, and combined filing materially expand complexity and warrant a significantly longer procedural schedule and evidentiary hearings.

The Indicated Shippers echo those concerns, stressing that PG&E’s application deviates from prior CPUC determinations and settlement commitments, rests on unproven assumptions tied to the still-pending 2027 General Rate Case, and risks unjustified cost shifts to noncore customers unless closely scrutinized in coordination with the GRC timeline.

INSTANT ANALYSIS: The CARD filing has triggered immediate, broad-based resistance across consumer advocates, generators, public power, and large noncore customers, not around a single rate tweak but around the structure of the case itself. Two main issues are a focal point: PG&E’s proposed shift from marginal-cost to embedded-cost allocation, and the decision to combine GCAP and GT&S into one oversized proceeding tightly coupled to a still-unresolved GRC. The near-universal call for an expanded scope, extended schedule, and evidentiary hearings suggests this case is headed for a long, contested record rather than a fast procedural glide path.

Transmission-Level Service & Cost Allocation

Administrative Law Judge Toy issued a ruling in A.24-11-007 that resets the schedule and reopens the record for PG&E’s proposed Electric Rule 30 governing transmission-level retail service.

After reviewing testimony and briefs, the ALJ found the existing record insufficient to resolve significant questions around cost causation, financing, and refunds, particularly for large transmission-level loads.

The ruling directs parties to submit limited additional testimony on how costs for major transmission network upgrades (Type 4 facilities) should be allocated and financed. The ruling focuses on clustered large loads, data centers, and subsequent customers that benefit from prior upgrades, as well as refund mechanics and ratepayer risk.

The ruling keeps interim implementation in place while deferring final cost-allocation decisions to a later Commission order.

• Limited opening testimony on questions from this ruling are due February 18;
• Limited rebuttal testimony on questions from this ruling are due March 13;
• Limited opening briefs on questions from this ruling are due April 10; and
• Reply briefs on all issues are due April 24.

INSTANT ANALYSIS: The CPUC is clearly uneasy with finalizing PG&E’s interim large-load cost framework without a firmer record on cost causation and fairness. By reopening the record, the Commission is reassessing how transmission upgrade costs should be assigned to large transmission-level customers, especially data centers, and whether standardized charges or customer-specific obligations are appropriate. The outcome will shape the cost, risk, and timing of future large-load interconnections in California.

PG&E'S Electric Rate Design

Administrative Law Judge Atamturk issued a ruling in PG&E’s General Rate Case Phase 2 application (A.24-09-014), setting the procedural schedule for the Dynamic Rate Options track.

The ruling follows PG&E’s request for a bifurcated process and adopts a near-term stop-gap track to consider extending existing Hourly Flex Pricing and real-time pricing pilots while deferring longer-term post-pilot rate design to a future proceeding.

The ALJ accepts a modified version of the parties’ compromise schedule, concluding that PG&E’s proposed longer-term Track B would push key issues too far into the future and unnecessarily tie this case to the timeline of other proceedings.

The ruling contains a lengthy schedule on Page 4.

INSTANT ANALYSIS: This GRC Phase 2 ruling preserves PG&E’s dynamic pricing pilots on an interim basis while deferring long-term rate design to a later proceeding, thereby prioritizing continuity for participating customers and avoiding premature decisions before billing systems and cost evidence are ready.

Distributed Energy Resources

Administrative Law Judge Chang issued a ruling in R.21-06-017 granting a Cal Advocates motion to admit its Distribution Grid Electrification Model (DGEM) 2025 Study and Report into the record.

Additionally, the ruling grants PG&E’s request to allow parties time to comment on the study, recognizing its relevance to Track 1 issues in the proceeding, which examines how California’s electric distribution system must evolve to accommodate high levels of DERs, including electric vehicles and building electrification.

Cal Advocates’ study evaluates nine electrification scenarios for the state’s three large investor-owned utilities, estimating distribution upgrade costs ranging from $17 billion to $38 billion by 2040, and suggests that electrification could place downward pressure on rates under certain conditions.

Opening comments on the DGEM 2025 Study are due February 5, with reply comments due February 12, focusing in part on how the study should be weighed against other analyses already in the record.

INSTANT ANALYSIS: Admitting the DGEM 2025 Study into the record anchors Cal Advocates’ electrification cost modeling within R.21-06-017’s distribution planning framework. With projected upgrade costs ranging from about $17 billion to $38 billion by 2040, the comment cycle will shape how electrification-driven capital spending is justified and how those costs are reflected in future rates.

Low-Income Subsidies

PG&E filed an application asking the CPUC to approve its 2028–2033 Income-Qualified Programs (California Alternate Rates for Energy, Family Electric Rate Assistance, and Energy Savings Assistance) with a total budget of about $1.03 billion, which is $97 million below the prior cycle. The filing continues existing program structures while tightening budgets to better reflect actual spending and emphasizing affordability, enrollment stability, and energy efficiency for low-income customers.

• CARE would continue with a 93% participation target, lower administrative costs, and targeted changes to enrollment and verification.
• FERA funding would rise to reflect expanded eligibility and higher outreach costs, alongside revised enrollment targets after persistent underperformance.
• ESA remains the largest component, with fewer pilots, more standardized delivery, deeper energy-savings targets, and expanded electrification, while total ESA spending declines from the prior cycle.

Protests will be due 30 days from when this item appears on the CPUC's Daily Calendar.

INSTANT ANALYSIS: PG&E is emphasizing continuity and cost discipline as affordability pressure builds, making limited ESA and FERA adjustments to reduce enrollment friction rather than reshaping low-income policy.

SoCalGas Natural Gas Capacity Contracts

SoCalGas submitted two expedited advice letters, AL 6588-G and AL 6589-G (available here) to obtain approval of interstate natural gas transportation capacity arrangements.

Advice Letter 6588-G requests approval of three new capacity contracts with Kern River Gas Transmission Company. AL 6589-G seeks renewal of existing capacity contracts with TransCanada Corporation, specifically on the NOVA Gas Transmission Ltd. and Foothills pipeline systems, used to deliver Canadian gas supplies for SoCalGas and SDG&E core customers.

In both filings, SoCalGas states that Cal Advocates was consulted and does not oppose the contracts, TURN did not participate, and the agreements will not modify tariffs, withdraw service, or impose new customer conditions.

Protests are due January 20.

INSTANT ANALYSIS: These paired advice letters reflect SoCalGas continuing to secure upstream interstate capacity through a streamlined process. While procedurally routine, the filings show core gas procurement being stabilized incrementally outside the larger and more contested long-term gas planning debates.

Group Challenges Diablo Canyon Decision

Californians for Renewable Energy (CARE) filed an application for rehearing that challenges the CPUC’s December 2025 decision approving PG&E’s 2026 cost recovery for extended operation of the Diablo Canyon Power Plant (D.25-12-007). The applicants argue the decision violates Senate Bill 846 and Public Utilities Code §712.8(d).

CARE makes the following arguments.

• The CPUC unlawfully allowed ratepayer recovery of $304.6 million in 2024–2025 operations and maintenance expenses that the statute explicitly bars from customer funding. CARE cites legislative history stating that funds needed to prepare for extended licensing must be covered by the Department of Water Resources loan, not ratepayers.
• The CPUC improperly accepted PG&E’s distinction between transition and extended operations costs, despite legislative history that CARE says clearly prohibits passing pre-extension O&M costs to ratepayers.
• The CPUC failed to address evidence showing at least $19.4 million in project costs incurred before November 2, 2024 that should have been disallowed even under PG&E’s own interpretation. CARE notes the decision "never mentions" these pre-November 2024 expenses or rebuts CARE's assertions, which represents a procedural failure to address record evidence.
• The decision misapplies the statute by permitting Volumetric Performance Fee funds to be spent on non-Diablo Canyon projects before fully offsetting Diablo Canyon operating costs, contrary to SB 846’s ordering of priorities.

Last, CARE challenges Finding of Fact 6, which states that there are no known or forecastable Nuclear Regulatory Commission license renewal conditions or Diablo Canyon Independent Safety Committee recommendations during the record period, arguing that record evidence it submitted directly contradicts this conclusion.

CARE asks the Commission to amend the decision to disallow the challenged O&M expenses, reallocate all Volumetric Performance Fee funding to reduce Diablo Canyon’s revenue requirement, and strike the disputed finding of fact.

INSTANT ANALYSIS: CARE argues that D.25-12-007 approved $304.6 million in O&M costs that PUC §712.8(d) bars from ratepayer recovery. The statute prohibits recovery of O&M expenses "incurred" before the original license expirations; the decision uses PG&E's framework, which looks at when projects are placed in service. CARE says that's a different test than the statute requires.