FRIDAY AGGREGATE: SCE Rates; Demand Response; Self-Generation Incentive Program

Items on today's radar map out the early contours of SCE’s 2026 rate landscape:

• A $10.19 billion Post-Test Year update with low-single-digit bill impacts;
• A full Transportation Electrification revenue refresh for Charge Ready and the Medium/Heavy-Duty portfolio; and
• A meaningful expansion of the Capacity Bidding Program through a new direct-participation pathway aimed at SGIP customers.

Additionally, SoCalGas adds new SGIP-eligible Time-of-Use rates for the Imperial Irrigation District and Anaheim. In sum, the filings add more clarity to January 1, 2026 rates while quietly reshaping customer access to Demand Response.

For more on January 1 rates, see the following CRI posts:

• January 1, 2026 Electric Rate Updates: PG&E, SCE, and SDG&E;
• PG&E Files Natural Gas Rate and PPP Surcharge Updates;
• SoCalGas Annual Consolidated Rate Update Filing; and
• SDG&E's 2026 Natural Gas Rates (in the November 3 Monday Aggregate)

(For the results of yesterday's CPUC voting meeting, go here.)

SOUTHERN CALIFORNIA EDISON RATES

SCE filed Advice Letter 5677-E (available here) to implement its 2026 Post-Test Year ratemaking updates authorized in the CPUC's September decision (D.25-09-030) addressing Edison's 2025 General Rate Case.

The filing updates SCE’s 2026 Authorized Base Revenue Requirement using the CPUC-approved attrition mechanism, which applies Consumer Price Index-based O&M escalation (capped at 5%), wildfire-mitigation capital additions, and other adjustments.

SCE incorporates several specific updates into its 2026 revenue requirement:

• A revised uncollectibles factor (0.297%) that raises the Authorized Base Revenue Requirement by $9.3 million;
• A correction to the gain on the sale of SCE's Long Beach Regional Office, reducing 2026 revenue requirement by $1.382 million;
• A $0.389 million revenue-requirement reduction linked to insurance reimbursements for the 2020 Creek Fire; and
• A $26.3 million reduction reflecting the continuation of customer-funded wildfire liability self-insurance through 2028.

After applying these adjustments, SCE’s 2026 GRC revenue requirement totals approximately $10.19 billion, allocated across distribution, generation, and new system generation functions.

SCE reports that the updated Authorized Base Revenue Requirement will raise system-average bundled rates by about 2.4% compared to current October 1, 2025 levels, with residential bills increasing roughly 2.6% for both CARE and non-CARE customers.

These impacts will ultimately be folded into the broader, year-end consolidated rate change effective January 1, 2026.

The advice letter also revises a large suite of preliminary statements, covering accounts such as:

• Base Revenue Requirement Balancing Account (the core true-up account for base GRC revenue);
• Portfolio Allocation Balancing Account (the balancing account that ensures SCE properly allocates generation base costs to customers);
• Energy Resource Recovery Account (the main fuel and purchased power true-up account);
• Vegetation Management Balancing Account (a two-way balancing account that ensures SCE spends – and recovers – vegetation management costs appropriately);
• Risk Management Balancing Account (the account that manages SCE’s wildfire liability self-insurance program);
• New System Generation Balancing Account (the balancing account that recovers costs for SCE’s owned generation/storage fleet added in recent GRC cycles); and
• Pension Costs Balancing Account (the account that ensures SCE only recovers the correct level of pension-related expenses)...

...to incorporate the new 2026 revenue requirement and updated uncollectibles factor.

INSTANT ANALYSIS: This is a straightforward 2026 Post-Test Year update that raises bundled rates modestly based on attrition mechanics adopted in the 2025 GRC. Most of the movement comes from the Consumer Price Index-based O&M escalation and an updated uncollectibles factor, partially offset by wildfire self-insurance adjustments and smaller accounting corrections tied to the Long Beach property sale and Creek Fire reimbursements.

Below are illustrative rate changes anticipated by this filing.

TRANSPORTATION ELECTRIFICATION

SCE filed Advice Letter 5676-E (available here) to implement the authorized 2026 revenue requirements for its full Charge Ready portfolio (Phase 1, Phase 2, the Schools and Parks pilots) and for its broader Transportation Electrification programs. All amounts will be rolled into SCE’s next consolidated revenue requirement and rate change on January 1, 2026.

The filing recaps the Commission decisions that created or expanded each program, details the associated balancing accounts, and presents SCE’s 2026 revenue requirements for each component using the currently authorized 7.66% rate of return pending a forthcoming Cost of Capital proposed decision (see our summary of that item here).

• Charge Ready Phase 1 continues recovery of up to $44 million in authorized early-stage charging infrastructure and ME&O spending.
• Phase 2 carries forward the large-scale $436 million Charge Ready 2 deployment.
• The Schools and Parks pilots reflect statutory programs under Assembly Bills 1082/1083.

The Transportation Electrification Portfolio includes both "Priority Review Projects" approved in a 2018 decision (D.18-01-024) and the Medium/Heavy-Duty infrastructure program authorized in a separate 2018 decision (D.18-05-040).

Across all categories, SCE provides detailed 2026 revenue-requirement line items (O&M, rebates, depreciation, taxes, and return) and states that final amounts will be recalculated if the CPUC's pending 2026 Cost of Capital PD adjusts the utility’s rate of return in time for January implementation.

INSTANT ANALYSIS: This filing's significance lies in how much Transportation Electrification and Charge Ready infrastructure is now baked into SCE’s baseline distribution revenue requirement for 2026. With all major charging programs rolling into January rates, this advice letter reflects how transportation electrification has become an embedded, predictable component of utility revenue needs rather than a series of standalone pilots. The only real variable is the Commission's pending 2026 Cost of Capital PD:

• If the CPUC adopts a lower Return on Equity/Rate of Return, all these transportation electrification and Charge Ready components will be recalculated downward.
• If not, SCE’s current Rate of Return (7.66%) holds.

DEMAND RESPONSE

SCE filed Advice Letter 5675-E (available here) to modify its Capacity Bidding Program – Elect (CBP-E) by adding a new Direct Participation Option (DPO).

This change is designed to give residential and non-residential customers a way to enroll directly with SCE, without going through a third-party aggregator or taking on the burdens of becoming a self-aggregator, so they can participate in CBP-E and satisfy the Self-Generation Incentive Program (SGIP) requirement to join a qualified Demand-Response program.

At present, SGIP customers who receive service through Community Choice Aggregators, Direct Access providers, or non-SCE Electric Service Providers have extremely limited options because the Capacity Bidding Program is restricted to bundled customers (and only one CBP-E aggregator accepts certain residential classes).

SCE frames the Direct Participation Option as an additional pathway that removes enrollment bottlenecks and allows more customers awaiting SGIP incentives to participate in CBP-E.

• Under the proposal, DPO customers would accept CBP-E tariff terms through a dedicated enrollment website, after which SCE (or an appointed Operator) would handle all administrative tasks (including registration, nominations, performance tracking, and settlement calculations).
• Customers would not need to post financial deposits, operate within APX MarketSuite, or perform monthly nomination duties.
• To maintain performance accountability, DPO participants would be subject to existing incentive and penalty rules, but SCE proposes capping both capacity incentive payments and penalties at 50%, with the retained portion offsetting program administration costs.
• Baselines for DPO customers would remain individual rather than aggregated, and payments (or penalties) would be settled once per season, consolidated until they reach at least $10.

SCE estimates approximately $1 million in DPO operational costs for 2026–2027, funded entirely through already-authorized CBP-E budgets and the retained 50% of participant incentives, which SCE argues keeps the option cost-neutral.

INSTANT ANALYSIS: SCE’s proposal is a pressure-relief valve for a bottleneck the CPUC created when it tied SGIP eligibility to participation in a qualified Demand Response program: because most residential CCA/Direct Access customers have no viable CBP-E aggregator to enroll with, their SGIP projects are stuck. By adding a Direct Participation Option, SCE is stepping in as a de facto utility-run enrollment pathway that bypasses the thin aggregator market, allowing customers to meet SGIP requirements while adding incremental Demand Response capacity.

SELF-GENERATION INCENTIVE PROGRAM (SGIP)

SoCalGas filed Advice Letter 6562-G (available here) to identify and seek approval for new residential time-varying electric rates that qualify customers for the SGIP.

Pursuant to CPUC decisions, residential SGIP participants must enroll in a Time-of-Use (TOU) rate with a summer peak beginning at or after 4 p.m. and a minimum peak-to-off-peak differential of 1.69, unless they are CARE or Medical Baseline customers who lack an eligible rate meeting those requirements. The decisions also require SGIP Program Administrators to notify the Commission whenever new qualifying non-utility electric rates appear in their territories.

SoCalGas reports that three such rates:

• One from Imperial Irrigation District; and
• Two from Anaheim Public Utilities...

...now satisfy the required price differentials and timing criteria. Each offers a peak beginning at 4 p.m. and meets or exceeds the 1.69 price-ratio threshold. SoCalGas therefore requests that the CPUC approve these rates as eligible for SGIP enrollment.

INSTANT ANALYSIS: This housekeeping item expands the list of SGIP-qualifying TOU rates in SoCalGas territory to include the Imperial Irrigation District and Anaheim Public Utilities’ residential schedules, all of which meet the 4 p.m. peak requirement and exceed the 1.69 price-ratio threshold. The practical effect is that SGIP administrators and developers now have clearer enrollment pathways for customers served by these municipal providers.