July 16 CPUC Voting Meeting Preview: PG&E Dominates the Agenda
Below are select items on the agenda for the CPUC's July 16 voting meeting, which is hyper-focused on PG&E.
- The Commission will decide whether to reject PG&E's bid to strip $2.6 billion in wildfire liabilities from its capital structure (an item it punted from the July 2 meeting) while separately granting half of PG&E's requested short-term borrowing expansion.
- The latter item would tie a new $1 billion borrowing reserve directly to the CPUC's winter natural gas price cap.
- Add a $198.8 million transmission CPCN in the Northern San Joaquin Valley, amended solar-plus-storage PPAs, and final terms for energizing Google's 250 MW San Jose data center, and the CPUC will have ruled on nearly every dimension of PG&E's business in one afternoon.
Beyond PG&E, SoCalGas seeks $54.4 million for mandated gas storage integrity work, and a draft resolution overrides all four large IOUs on extreme-heat disconnection protections, ordering a 90-degree statewide trigger the utilities didn't propose and don't want.
UTILITY FINANCES/COST OF CAPITAL
A proposed decision denies PG&E's request to exclude approximately $2.6 billion in wildfire liabilities and a state loan from its capital structure calculations. CRI's full summary, dated May 27, can be found here. (Note: the CPUC delayed action on this item at its July 2 meeting and moved it to the July 16 agenda).
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Separately, another proposed decision grants PG&E half of the short-term borrowing request it made in a 2025 application. The PD authorizes a $1 billion increase in short-term debt authority, bringing PG&E's total to $9.5 billion. PG&E had asked for $2 billion, which would have brought its total to $10.5 billion.
PG&E wanted the extra room to cover seasonal cash needs, gas procurement and collateral costs, balancing-account swings, and looming debt maturities.
The $1 billion is structured as a reserve, available only for three things:
- Gas/electricity price spikes (a jump of more than 50% in monthly cost versus the trailing 12-month average);
- Major disaster response; or
- Memorandum/balancing-account undercollections exceeding $2.5 billion.
The funds cannot be used to refinance existing debt. The figure ties directly to the Commission's new winter gas price cap (D.26-02-058). PG&E's own estimate ($600 million in incremental need had the cap applied during the 2022-23 winter spike) is the quantitative basis for the $1 billion.
NATURAL GAS STORAGE INTEGRITY
Draft 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, SoCalGas is entitled to 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, plus well remediation and abandonment projects proved more resource-intensive than planned. Additionally, the post-test-year forecasting mechanism was too coarse to capture program specifics.
If adopted, the resolution would authorize 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.
SoCalGas's underlying advice letter, attached here, anticipates a total noncore increase of 0.8%, a total core increase of 1.2%, and no effect on BTS rates.
RENEWABLES PROCUREMENT/MID-TERM RELIABILITY
Draft 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.
Draft 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.
DISCONNECTIONS & CUSTOMER PROTECTIONS
Draft Resolution E-5468 approves, with significant modifications, a joint advice letter of SCE, PG&E, SDG&E and SoCalGas implementing a 2025 decision's mandate to lower the thresholds that suspend residential shutoffs for nonpayment during extreme heat.
- The decision, D.25-06-012, implemented Senate Bill 1142 by requiring the large investor-owned utilities to reconnect first-time residential customers disconnected for nonpayment once they enroll in a payment plan, with reconnection required within 24 hours for remote reconnections or one business day for field reconnections, subject to safety and weather exceptions.
- The decision also ordered the utilities to update reconnection reporting and file proposals to expand extreme-heat disconnection protections by lowering the heat-based thresholds that halt shutoffs, with implementation required by May 1, 2026.
The utilities proposed replacing the 100-degree statewide trigger with CalHeatScore Level 3, forecast within 72 hours at the ZIP code level, and keeping 100 degrees as the interim and fallback standard until the CHS system comes online.
The draft resolution rejects both numbers. Level 3 triggers protections at apparent temperatures of approximately 98 to 101 degrees and therefore fails D.25-06-012's directive to lower thresholds. The draft resolution instead orders CHS Level 2, which activates at a materially earlier stage of heat-health risk, and sets the interim and fallback trigger at 90 degrees statewide, agreeing with multiple intervening parties that a single lower cutoff is needed to protect coastal and mountain customers for whom dangerous heat arrives well below 100 degrees.
The utilities may record incremental implementation costs to their Disconnections Memorandum Accounts and must report the Level 2 trigger's effect on arrearages annually for three years via advice letter.
TRANSMISSION INFRASTRUCTURE
A proposed decision grants PG&E a CPCN for the Northern San Joaquin 230-kV Transmission Project. The project is a reliability upgrade looping the Brighton-Bellota line through Lockeford Substation. It also adds a new double-circuit 230-kV line to the new PG&E Thurman Switching Station at Lodi Electric Utility's Industrial Substation, with a $198.8 million cost cap (14% contingency) and March 2029 target.
The PD finds the need from CAISO's 2017-2018 transmission plan persists: thermal overloads and low-voltage conditions force PG&E onto a single-source workaround that fails NERC standards. The project essentially doubles local load-serving capability for about 38,000 PG&E and Lodi Electric Utility customers.
On CEQA, the PD certifies the Final Environmental Impact Report and finds all impacts mitigable to less-than-significant. The PD grants some of PG&E's requested revisions to the seven biological measures it challenged as infeasible while rejecting the rest. Work-area-based survey buffers, avoidance of individual bumble bees in flight, and single-map wetland demarcation go PG&E's way, but the PD keeps a 1,640-foot burrowing owl survey buffer, tiger salamander work stoppages where PG&E lacks take coverage, wetland protections during O&M, and bat roost obligations.
LARGE LOAD INTERCONNECTION
Draft Resolution E-5455 approves PG&E's agreement to energize Google's 250 MW San Jose data center with stronger ratepayer protections. The draft resolution caps annual refunds at actual net revenues received (not projected future revenues) and extends the refund window from 10 to 15 years. The agreement must be updated within 60 days of a decision in the Rule 30 proceeding to reflect whatever cost-responsibility framework the CPUC adopts for broader transmission network upgrades.
This is not a typical interconnection case. Google's load depends directly on the Newark-NRS 230 kV line (a $1 billion+ project whose FERC-approved revenue requirement hits ratepayers at approximately $100 million per year) plus more than 10 other South Bay transmission upgrades. The CPUC previously capped refunds at 75% of net revenues for STACK Infrastructure and Microsoft (Resolutions E-5420 and E-5439). Here it allows 100%, but only because the Rule 30 proceeding handles network-upgrade cost exposure separately.
PG&E FACILITY RELOCATION CONTRACTS
Two draft 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 draft resolutions would 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.
- Draft 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, requiring PG&E to 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.
- Draft Resolution E-5462 covers work 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, including 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 would 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 draft 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.