July 16, 2026 CPUC Voting Meeting Results: Heat Protections Expanded and Major PG&E Decisions Delayed

The CPUC’s July 16 voting meeting delivered immediate consequences for utility customers while postponing three of the day’s largest PG&E matters.

• The CPUC lowered the extreme-heat threshold for suspending electric disconnections from 100 to 90 degrees, authorized SoCalGas to recover $54.4 million in storage-integrity costs and approved a $198.8 million transmission project that will more than double normal load-serving capability in part of the Northern San Joaquin Valley.
• The Commission also accepted a nine-month delay for 750 MW of PG&E-contracted solar paired with 450 MW of storage.

Still unresolved are:

• PG&E’s attempt to exclude approximately $2.6 billion in wildfire liabilities and state borrowing from its capital-structure calculation;
• Its request for additional short-term borrowing authority; and
• Its agreement to energize Google’s 250-MW San Jose data center.

All three of those items were held until August 13.

Below, CRI provides details on every significant energy item that carried, including any redlined changes and associated final stakes.

DISCONNECTIONS & CUSTOMER PROTECTIONS

Resolution E-5468 lowers the extreme-heat thresholds at which PG&E, SCE and SDG&E must suspend residential electric disconnections for nonpayment.

• The resolution implements part of D.25-06-012, which strengthened residential reconnection protections and directed the utilities to propose lower heat-based disconnection thresholds. That decision required the large utilities to reconnect customers following their first disconnection after the decision once they enroll in a payment plan, without additional conditions. Reconnection must occur within 24 hours when it can be performed remotely or within one business day when a field visit is required, subject to safety and extreme-weather exceptions.
• PG&E, SCE, SDG&E and SoCalGas jointly proposed replacing the existing 100-degree statewide trigger with CalHeatScore Level 3, forecast within 72 hours at the ZIP-code level. They proposed retaining 100 degrees as the interim threshold while the electric utilities integrated CHS into their systems and as a fallback whenever CalHeatScore data is unavailable.
• Resolution E-5468 rejects both thresholds. In the example examined by the CPUC, Level 3 corresponds to apparent temperatures of approximately 98 to 101 degrees and therefore would provide protection under conditions similar to the existing 100-degree standard. The resolution instead orders the electric utilities to use Level 2, which corresponds to approximately 94 to 98 degrees and conditions associated with a 33% to 66% increase in heat-related emergency department visits over baseline.
• Until Level 2 is implemented, and whenever CalHeatScore data is unavailable afterward, PG&E, SCE and SDG&E must suspend disconnections when temperatures of at least 90 degrees are forecast within 72 hours. The statewide 90-degree threshold takes effect immediately, while the utilities must implement the ZIP-code-specific Level 2 trigger within six months.
• The utilities may record incremental implementation costs in their Disconnections Memorandum Accounts. Beginning 12 months after CalHeatScore implementation, they must report annually for three years on the Level 2 trigger’s effect on arrearages through Tier 1 advice letters. The first filings must also summarize CalHeatScore implementation costs. The three-year period applies only to reporting; the customer protections do not expire.

Although SoCalGas joined the advice letter, it is excluded from the resolution’s extreme-heat implementation, cost-recording and reporting requirements. Existing CPUC rules suspend gas disconnections during extreme cold, but not extreme heat.

INSTANT ANALYSIS: The CPUC has chosen a substantially more protective standard than the utilities proposed. The immediate reduction from 100 to 90 degrees is likely to increase the number and geographic reach of disconnection suspensions during summer 2026, particularly in coastal and mountain communities where locally dangerous heat can occur well below 100 degrees.

The longer-term shift is from a blunt statewide temperature rule to a ZIP-code-specific health-risk measure. Level 2 will account for local climate conditions and apparent temperature, allowing protections to begin earlier in places where residents are less acclimated to heat. By rejecting Level 3, the resolution concludes that a nominally more sophisticated metric does not satisfy its directive if it produces results similar to the standard it was intended to replace.

The annual arrearage filings preserve oversight of the principal tradeoff: stronger protections may allow unpaid balances to accumulate by delaying disconnections. But the CPUC did not make the protections temporary or contingent on those results. The reporting will inform possible future adjustments, while the Level 2 framework remains in effect unless the CPUC affirmatively changes it.

NATURAL GAS STORAGE INTEGRITY

Resolution G-3616 grants SoCalGas authority to recover about $54.4 million from ratepayers for undercollected costs in its Storage Integrity Management Program Balancing Account for the 2019-2023 rate case cycle, with the balance measured through December 2024.

The costs stem from state- and federally mandated underground gas storage integrity work:

• Well inspections;
• Remediations;
• Risk management and data management.

SoCalGas spent about $437.1 million against $332.4 million authorized, a $104.6 million (31%) overrun. Because that amount falls under the 35% cap set in the company’s 2019 General Rate Case decision (D.19-09-051), SoCalGas could seek recovery by advice letter rather than a full application.

Commission staff reviewed the recorded costs, including invoice samples, and found them appropriately recorded and reasonably incurred. The overrun was entirely capital-driven. SoCalGas said field assessments revealed more remediation work than forecast, and well remediation and abandonment projects proved more resource-intensive than planned. The post-test-year forecasting mechanism was also too coarse to capture program specifics.

The resolution authorizes SoCalGas to file a Tier 1 advice letter within 30 days to amortize the $54.4 million balance, plus interest, in gas transportation rates over 12 months under the Equal Percent of Authorized Margin allocation method.

This is the final SIMP recovery from the two-way balancing account authorized for the 2019-2023 cycle. SoCalGas’s Test-Year 2024 GRC decision, D.24-12-074, converted the SIMP account to a one-way balancing account and required future undercollections to be recorded in a memorandum account. That change allowed SoCalGas to seek separate authorization for recovery of future overruns.

SoCalGas’s underlying advice letter anticipates a total noncore increase of 0.8%, a total core increase of 1.2%, and no effect on BTS rates.

INSTANT ANALYSIS: The recovery cleared the applicable cap by approximately four percentage points. SoCalGas exceeded authorized SIMP expenditures by 31% against a 35% threshold. Had the overrun crossed that threshold, the advice-letter route would have closed and SoCalGas would have needed to file a separate application, bringing a longer proceeding and greater litigation and disallowance risk.

The accounting treatment has since become less favorable to the utility. D.24-12-074 converted the SIMP account to a one-way balancing account and directed SoCalGas to record future undercollections in a memorandum account. SoCalGas may still seek recovery, but it will carry the timing and reasonableness risk until the CPUC authorizes it (an important distinction for integrity work driven by state and federal safety requirements).

The longer-term pressure comes from recovering nondiscretionary storage-safety costs as California gas throughput declines and those costs are spread across potentially fewer therms and, eventually, fewer customers. The capital-driven overrun approved in this resolution also shows the limits of forecasting storage-well remediation: field assessments can reveal work whose scope and cost cannot be known in advance.

RENEWABLES PROCUREMENT/MID-TERM RELIABILITY

Resolution E-5470 approves PG&E’s amendments to two power purchase agreements with Atlas Solar XII and Atlas Solar XIII for the Atlas Solar North 1 and Atlas Solar North 2 projects in La Paz, Arizona.

Each project remains a 375-MW solar photovoltaic facility paired with 225 MW of lithium-ion battery storage under a 15-year term, but the expected initial delivery date moves from December 1, 2027, to September 1, 2028, because of delays in required network upgrades.

Resolution E-5470 finds that the amendments do not change the projects’ capacity, contract term, RPS product or pricing, and that they remain consistent with PG&E’s mid-term reliability, Integrated Resource Planning and RPS procurement obligations.

Energy Division also finds the amendments reasonable from a valuation and cost-recovery standpoint, with costs and benefits recoverable through PG&E’s Portfolio Allocation Balancing Account, subject to prudent contract administration. Project owner Lydian Energy supported the amendments, saying the delay was less than a year and the projects would still provide carbon-free, dispatchable capacity under stable long-term pricing.

INSTANT ANALYSIS: The resolution preserves 750 MW of solar generation and 450 MW of paired storage in PG&E’s contracted portfolio, but shifts their reliability contribution out of 2027. The CPUC is allowing the projects’ delivery dates to move into 2028 rather than requiring PG&E to replace resources that remain viable, consistent with the alternative compliance framework established in a 2025 decision (D.25-09-007) for delayed mid-term reliability procurement.

That flexibility does not constitute final approval to count the projects toward a particular procurement requirement. Resolution E-5470 leaves resource eligibility to the Integrated Resource Planning compliance process, while PG&E remains responsible for meeting its interim resource adequacy obligations. The unchanged pricing and independent evaluator’s finding that the amendments preserve a reasonable allocation of risk helped make the nine-month delay acceptable without additional ratepayer cost.

TRANSMISSION INFRASTRUCTURE

A decision grants PG&E a CPCN for the Northern San Joaquin 230-kV Transmission Project, a reliability upgrade looping the Brighton-Bellota line through Lockeford Substation.

The project also adds a new double-circuit 230-kV line connecting Lockeford to the new PG&E Thurman Switching Station at Lodi Electric Utility's Fred M. Reid Industrial Substation. The decision authorizes a $198.8 million maximum reasonable and prudent cost, including a 14% contingency, with operation targeted for March 2029.

• The decision finds that the need identified in CAISO's 2017-2018 transmission plan persists. Thermal overloads and low-voltage conditions currently force PG&E onto a temporary operating procedure that leaves the area on a single 230-kV source and fails the applicable NERC performance requirement. The project raises normal-condition load-serving capability from 194 MW to roughly 404 MW, and P1-contingency capability from 152 MW to about 456 MW, improving reliability for about 38,000 PG&E and Lodi Electric Utility customers.
• On CEQA, the decision certifies the Final Environmental Impact Report and finds all project impacts reducible to less than significant through mitigation. PG&E secured work-area-based survey requirements across several species, flexibility to reduce the burrowing-owl no-disturbance buffer to 500 feet under specified biological safeguards, removal of the requirement to avoid individual bumble bees in flight, and use of a single wetland map.
• The decision retains the 1,640-foot burrowing-owl survey area, tiger-salamander work stoppages for activities outside the valley-wide O&M habitat conservation plan's coverage, wetland protections for ground-disturbing O&M, and bat-roost obligations.

The decision also requires PG&E to implement an "Agricultural Community Communication Plan" developed in consultation with the California Farm Bureau Federation, establishing continuing outreach and a designated PG&E contact for affected landowners and agricultural stakeholders.

INSTANT ANALYSIS: The decision leaves the project's economics and reliability rationale intact while giving PG&E relief from biological requirements it argued were impractical or unnecessarily costly. The decision separates administrative changes to mitigation from reductions in substantive protection. It accepts:

• Work-area surveys;
• A conditional cut to the burrowing-owl avoidance distance; and
• Simplified wetland mapping.

But the decision stays firm wherever PG&E failed to show that existing habitat-plan coverage would deliver the same result. The agricultural communication requirement gives the Farm Bureau a formal coordination channel through construction without affecting project design or the cost cap.

The decision also confirms the CPUC's willingness to approve a major reliability project through agricultural territory once all environmental effects can be mitigated, while binding PG&E to a documented landowner-outreach obligation for the duration.

PG&E FACILITY RELOCATION CONTRACTS

Two resolutions address PG&E Actual Cost Contracts under Electric Rule 15.I.3’s Exceptional Cases provision for large utility-facility relocation work requested by third-party developers or contractors.

The resolutions approve two PG&E agreements allowing overhead transmission and distribution facilities to be relocated and rearranged on an actual-cost basis rather than under PG&E’s standard fixed-estimate Work Performance Agreement.

• Resolution E-5465 covers work for KB Home South Bay’s Phase 3 commercial and residential condominium development near Communications Hill Boulevard in San Jose. PG&E will relocate or replace transmission poles and associated 21-kV distribution underbuild at an estimated total cost of about $782,109, including ITCC, with KB Home having already paid a $200,000 engineering advance.
• Resolution E-5462 covers activities for Clark & Sullivan Construction and Broward Builders, Inc., a joint venture building a new California Highway Patrol office in Quincy, requiring work on the Caribou-Plumas Junction 60-kV line. This includes relocating, upgrading and replacing poles with East Quincy distribution underbuild, at an estimated total cost of about $1.3 million, including ITCC, after a $300,000 engineering advance.

In both cases, PG&E will collect the estimated cost upfront, perform the design, procurement, construction and removal work, and then issue a final invoice after completion to true up to actual net costs, refunding any overpayment without interest or billing for any additional amount owed. The resolutions find that this arrangement is reasonable for large relocation projects because fixed estimates can either leave PG&E exposed to overruns or require the applicant to overpay if the estimate is conservative.

INSTANT ANALYSIS: The resolutions keep the financial consequences of private development work with the parties requesting it. Because PG&E will recover its actual net costs, neither the utility nor its ratepayers should absorb overruns caused by relocating facilities for the San Jose development or the new CHP office. At the same time, the developers will not be locked into conservatively high fixed prices if the work costs less than projected.

The approach removes cost-estimation risk, but it does not provide the developers with price certainty: they must fund PG&E’s estimate upfront and remain responsible for any additional costs. The Quincy agreement includes an added safeguard allowing the joint venture reasonable access to PG&E’s accounts and records to audit the final invoice. Both resolutions also build on prior CPUC approvals of actual-cost relocation agreements, indicating that the Exceptional Cases provision is becoming an established mechanism for larger projects that do not fit PG&E’s standard fixed-price contract.

DELAYED ITEMS

• For the second consecutive meeting, the CPUC delayed action on a proposed decision denying PG&E's request to exclude approximately $2.6 billion in wildfire liabilities and a state loan from its capital structure calculation. President John Reynolds requested a hold on the PD until the August 13 Commission meeting.
• The Commission also punted on a PD granting PG&E half of the short-term borrowing request it made in a 2025 application. That item moves to the August 13 agenda at the request of Commissioner Matthew Baker.
• Also delayed until August 13, at staff's request: Draft Resolution E-5455, which approves PG&E's agreement to energize Google's 250-MW San Jose data center, but with stronger ratepayer protections.