July 2 CPUC Voting Meeting Results: PG&E $2.6B Capital Structure Decision Delayed; SOMAH Expansion Denied

As summarized in two standalone posts from earlier today, the Commission adopted its final Track 1 Resource Adequacy decision and a final decision establishing the application process for Senate Bill 1221 neighborhood decarbonization pilots.

The CPUC also delayed action on a proposed decision that would deny 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 held that item until July 16 for further review.

Other notable decisions and resolutions from the July 2 meeting are provided below. (Note that Commissioner Christine Harada was not present today.)

CUSTOMER-SITED SOLAR

A decision declines to expand the Solar on Multifamily Affordable Housing (SOMAH) program to new-construction, under-construction, or master-metered affordable multifamily properties. This move keeps the program focused on existing eligible buildings as it approaches its statutory 2032 endpoint.

The decision finds that Senate Bill 355 permits, but does not require, broader eligibility, and that expansion would add administrative complexity, increase program costs, and divert funds from existing projects while SOMAH is already advancing toward its 300-MW deployment goal.

The decision also establishes SOMAH funding and closeout rules. Liberty and PacifiCorp, where participation remains minimal, may propose returning unused 2025 and first-half 2026 collections through the Residential and Small Business Climate Credit in their 2027 Energy Cost Adjustment Clause (ECAC) applications, while retaining enough funding for future eligible projects. They may also propose additional annual returns of pre-2025 funds, beginning in their 2028 ECAC applications, capped at $0.38 million for Liberty and $1.84 million for PacifiCorp. Accrued interest will first offset SOMAH's first-half 2026 budget allocations.

At program close, remaining unspent funds and interest will return to utility GHG revenue accounts upon disposition of the utilities' final expenditure-report advice letters, with customer returns handled through future ERRA forecast applications. The decision adds balancing-account closure mechanics and allows the SOMAH program administrator and the IOUs to seek limited post-2032 administrative spending authority for final closeout work.

DEMAND RESPONSE

The Commission adopted five demand-response resolutions, approving targeted enrollment and AutoDR changes while rejecting larger mid-cycle incentive and program-design revisions.

• Resolution E-5456 gives SCE approval to let customers enroll directly in its Capacity Bidding Program Elect, with SCE acting as aggregator. The change addresses a participation shortfall that had left some Self-Generation Incentive Program customers without a qualifying DR option when third-party aggregators were not enrolling residential customers. The resolution declines, without prejudice, to also lift CBP-E's Medical Baseline restriction because SCE requested that relief in comments rather than in its advice letter (a restriction that continues to leave unbundled Medical Baseline customers without a qualifying DR option).
• Resolution E-5444 denies SDG&E approval for a new residential Capacity Bidding Program. The resolution finds SDG&E's proposal deviated too far from the existing CBP model, with a weakened penalty structure, and it lacked the Resource Adequacy compliance and load-impact filings required of supply-side resources.
• Resolution E-5450 gives PG&E partial approval for changes to its Automated Response Technology program, including a 30-day performance evaluation timeline, Day-of Adjustment standardization, CAISO tariff alignment, and minor formatting updates. The resolution rejects PG&E's proposed 30% capacity-payment increase and its proposal to remove the cap that zeroes out negative performance, finding both insufficiently justified after only one year of program operation.
• Resolution E-5451 gives PG&E partial approval for mid-cycle updates to its Base Interruptible Program, approving a streamlined online enrollment process for aggregated customers, removal of fax references, and form-language cleanup. The resolution denies PG&E's proposed 10% summer incentive increase, finding insufficient justification given declining dispatch frequency and only two non-test BIP events since 2023.
• Resolution E-5453 approves, with modifications, a joint PG&E and SCE request to update their Automated Demand Response Technology Incentive Program guidelines. The resolution expands eligible customer segments and measures, adds PG&E's ART program as a qualified residential AutoDR program, and clarifies cloud-based control requirements to align the two utilities' interpretations of existing policy.

LOW-INCOME SUBSIDIES

A decision authorizes 2027 bridge-year budgets for the four major investor-owned utilities' income-qualified programs (CARE, FERA and ESA) while leaving broader disputes for the 2028-2033 full-cycle applications pending.

Excluding subsidies and including the use of unspent funds, the decision authorizes PG&E to collect $66.3 million, SoCalGas $66.8 million, SCE $38.3 million and SDG&E $21.0 million for 2027 income-qualified program activities.

• CARE Administration: The decision rejects both the utilities' requested CARE administrative budgets and Cal Advocates' 2024-actuals-only position. Instead, it sets budgets at 2024 actual spending plus three years of 3% escalation, a 9.27% increase, for $33.6 million collectively.
• FERA Administration: The decision grants the requested FERA administrative budgets in full, totaling $5.75 million. Senate Bill 1130 eliminated the three-person household floor, expanding the eligible pool, and the decision declines to under-resource the program during the bridge year.
  • The decision also confirms that FERA subsidy projections are not budget requests; actual subsidy costs are tracked through balancing accounts and resolved separately, with no ratemaking effect here.
  • The decision adopts an interim SB 1130 compliance process requiring the electric IOUs to file annual FERA enrollment reports through Tier 2 Advice Letters by March 1, while leaving possible refinements to the 2028-2033 full-cycle case.
  • ESA: The decision approves most of the IOUs' requested ESA line-item budgets, finding that 2026 authorized spending plus inflation is a reasonable bridge-year basis given cost pressures and the expedited nature of the proceeding.
    • The decision rejects Cal Advocates' proposal to use 2024 actual spending as the budget baseline, but reduces the Southern California Multifamily Whole Building budgets where SCE, SDG&E and SoCalGas did not justify the requested increases in light of persistent underspending.
    • The portfolio is approved at approximately $380 million gross. The decision also leaves SCE's Building Electrification Pilot to sunset in 2026, while allowing SCE to seek up to $1.79 million for closeout activities. The decision closes SCE's Clean Energy Homes Pilot and the joint SCE/SoCalGas Whole Home Pilot.

The decision directs the IOUs to apply all committed and uncommitted ESA unspent funds remaining at year-end 2026 against 2027 collections, rather than allowing SoCalGas to retain $29 million as a tariff-related reserve.

The current estimates are PG&E $104 million, SoCalGas $55 million, SCE $49 million and SDG&E $19 million, but the final amounts will be reconciled through a Tier 1 Advice Letter due June 1, 2027, with any true-up handled through the annual Public Purpose Program true-up process.

TRANSMISSION/INFRASTRUCTURE PERMITTING

A decision grants PG&E a permit to construct the Moraga-Oakland X 115-kV Rebuild Project, which would replace four circuits built between 1908 and 1931 that serve about 200,000 customers, including the Port of Oakland. The rebuild spans about four miles of overhead line and one mile underground at an estimated cost of $276.8 million.

The Commission certifies the Final Environmental Impact Report and finds the project environmentally superior to all alternatives studied, including three underground routing options. Significant and unavoidable construction impacts on transportation and wildfire evacuation in the Oakland Hills remain after mitigation.

The decision adopts a statement of overriding considerations, finding benefits to reliability, safety, wildfire-risk reduction, and long-term operability outweigh the unavoidable construction impacts.

NATURAL GAS/RATE RECOVERY

A decision approves a settlement authorizing SDG&E to recover $6.985 million recorded in its Transmission Integrity Management Program Balancing Account for 2019-2023.

SDG&E had sought $7.413 million; Cal Advocates recommended a $717,000 disallowance across straight-time labor, vacation and sick leave, and intercompany O&M. The settlement reduces the request by $428,000, expressed as $394,000 in O&M and $34,000 in interest.

The key dispute was incrementality: whether the costs exceeded amounts already authorized in SDG&E's 2019 General Rate Case and prior Transmission Integrity Management Program (TIMP) advice letters.

Cal Advocates said that SDG&E redirected existing employees to TIMP work instead of adding staff, so the labor was already in rates. SDG&E argued that new federal pipeline-safety mandates expanded TIMP's scope and that costs were properly tracked in the balancing account.

The Commission's final decision finds the settlement reasonable, while crediting neither side's full position.