January 1, 2026 Electric Rate Updates: PG&E, SCE, and SDG&E

PG&E, SCE, and SDG&E each filed advice letters for preliminary implementation of their consolidated revenue requirement and rate changes on January 1, 2026.

• These filings pull together every CPUC- and FERC-approved (or expected) cost change effective at the start of 2026.
• The utilities will submit final consolidated ALs before January 1 that provide a more accurate projection of their rates.
• Protests to all three submissions are due December 8.

INSTANT ANALYSIS: Collectively, the filings show three very different rate paths heading into 2026. PG&E’s early numbers place considerable upward pressure on Direct Access/Community Choice Aggregator customers; SCE’s updates lean toward broad relief across its portfolio, and SDG&E’s increases reflect a mix of wildfire costs, ERRA updates, and weaker sales. Of course these are preliminary estimates, as the utilities' late-December true-ups will determine how much of this picture holds.

PG&E Preliminary Annual Electric True-Up

PG&E filed Advice Letter 7762-E as its preliminary Annual Electric True-Up and projects a 6.2% decrease in the system-average bundled electric rate but a 23.2% increase for Direct Access and Community Choice Aggregator customers.

PG&E requests approval to recover approximately $2.0 billion in forecast December 31, 2025 undercollections across numerous balancing accounts, including ERRA-related accounts, the Portfolio Allocation Balancing Account, the Modified Transition Cost Balancing Account, and wildfire- and public-purpose-related accounts.

The filing also incorporates revenue-requirement changes stemming from recent CPUC decisions (e.g., wildfire mitigation, non-wildfire insurance, transmission adjustments, and the 2022 Wildfire Mitigation and Catastrophic Events account) as well as pending requests related to:

• Gas Advanced Metering Infrastructure;
• Transmission Revenue Requirement Memorandum Account; and
• Diablo Canyon extended operations.

PG&E will submit a final true-up submission in late December reflecting all Commission decisions issued by mid-December and updated recorded balances (this presumably will include the pending Cost of Capital PD; see our summary of that item here).

PG&E's preliminary filing also explains how distribution, generation, Power Charge Indifference Adjustment, public-purpose, wildfire, and non-bypassable charges will be allocated consistent with prior CPUC rulings. Below are illustrative rates.

SCE Preliminary Implementation of Consolidated Revenue Requirement and Rate Change on January 1, 2026

SCE Advice Letter 5687-E (available here) estimates that Edison's total authorized revenue requirements will increase by $254.5 million over October 1, 2025 levels. The filing incorporates several major components:

• Edison's updated 2026 ERRA Forecast, which alone drives a $261.5 million increase;
• SCE's 2026 Post-Test Year General Rate Case revenue requirement, which adds another $526.5 million;
• Implementation of various true-ups from balancing accounts (Base Revenue Requirement Balancing Account, Nuclear Decommissioning Adjustment Mechanism, CARE, Public Purpose Programs Adjustment Mechanism);
• The Diablo Canyon Extended Operations non-bypassable charge;
• Wildfire-related revenue allocations; and
• Adjustments to Fixed Recovery Charges associated with multiple securitized bond issuances.

Some figures (most notably the 2026 Cost of Capital) are not included because the CPUC's proposed decision in that proceeding was not published when Edison was assembling its advice letter (see our summary of the recently-issued PD here).

Edison's final filing in late December will update these estimates using actual year-end balances and any decisions adopted by the December 4 and December 18 CPUC voting meetings. Below are SCE's illustrative rates.

SDG&E Annual Electric Regulatory Account Update

SDG&E filed Advice Letter 4758-E (available here), which estimates that bundled system average electric rates will rise by 8.1% (about 3¢/kWh) and delivery rates by 5.1% (about 1.1¢/kWh), largely due to a decline in forecasted system sales.

SDG&E includes updated 2026 revenue requirements across ERRA/PCIA, Local Generation, Competition Transition Charge, non-fuel generation, wildfire-related charges, PPP updates, and numerous balancing accounts. Typical residential bundled bills (excluding the Climate Credit) would increase by around $15/month for non-CARE customers and $8/month for CARE customers if the filing is approved.

SDG&E organized cost drivers into pending and authorized items. Pending items (e.g., the 2026 Cost of Capital, Track 2 wildfire-cost reasonableness review, 2026 Diablo Canyon allocations, several ERRA/PCIA updates, the Wildfire Fund NBC, and FERC-jurisdictional transmission rates) may be incorporated into the late-December true-up if approved before year-end.

Authorized items include updated amortizations for dozens of regulatory balancing accounts, e.g.

• Electric Distribution Fixed Cost Account;
• Liability Insurance Premium Balancing Account;
• Medium-Duty and Heavy-Duty Electric Vehicle Balancing Account;
• Non-Fuel Generation Balancing Account;
• Tree Trimming Balancing Account;
• General Rate Case Memorandum Account; and
• Catastrophic Event Memorandum Account...

...plus attrition-year 2026 General Rate Case revenue requirements, transportation-electrification program adjustments, paperless-billing refunds, and ongoing Critical Peak Pricing/Smart Pricing Program/Distributed Generation-Renewable under/overcollections.

The filing also integrates major GRC Phase 2 changes effective January 1, 2026, including:

• Wildfire-related revenue allocation via the Equal Percentage of Total Revenue methodology;
• Seasonal-rate adjustments for residential schedules;
• The new System Average Percentage Change allocation method;
• The updated methodology for Vehicle Grid Integration/Public Grid Integrated Rate system-peak calculations; and
• The incorporation of Electric Vehicle High Power rate balancing-account collections into distribution rates.

SDG&E also updated the new residential Base Services Charge, applying the required layering of Marginal Customer Access Costs, Local Generation Charge, PPP, and Nuclear Decommissioning revenues.

Illustrative rates are noted below (the second table excludes the Climate Credit, FYI).