March 1, 2026 PG&E Noncore Natural Gas Rate Increase
PG&E filed Advice Letter 5184-G seeking CPUC approval to implement updated noncore gas transportation tariff rates effective March 1, reflecting revenue requirement changes previously authorized by the CPUC.
The filing consolidates adjustments tied to recovery of costs from the utility's 2023 Wildfire Mitigation and Catastrophic Event application (in which PG&E sought recovery of costs incurred primarily in 2022). That authorization occurred earlier this month in D.26-02-004. (See CRI's coverage here).
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The authorized amount included $14.6 million in gas distribution and $5.4 million in gas transmission revenue requirements (including interest and RF&U)
Under the proposal, noncore transportation rates would increase by about $3.6 million annually, while concurrent changes to core transportation rates would add roughly $16.4 million, producing an overall gas revenue increase of about $20 million on an annualized basis.
Protests are due March 16. Illustrative rates are noted below.
| Customer Class | January 2026 | March 2026 | Percentage Change | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Transportation (1)(5) | G-PPPS [2] | Total | Transportation | G-PPPS | Total | Transportation | G-PPPS | Total | |
| RETAIL CORE | |||||||||
| Residential Non-CARE (4) | $2.155 | $.121 | $2.276 | $2.163 | $.121 | $2.284 | 0.4% | 0.0% | 0.3% |
| Small Commercial Non-CARE (4) | $1.374 | $.106 | $1.480 | $1.378 | $.106 | $1.484 | 0.3% | 0.0% | 0.3% |
| Large Commercial | $.810 | $.085 | $.894 | $.812 | $.085 | $.896 | 0.2% | 0.0% | 0.2% |
| NGV1 - (uncompressed service) | $.861 | $.048 | $.909 | $.863 | $.048 | $.911 | 0.3% | 0.0% | 0.2% |
| NGV2 - (compressed service) | $2.534 | $.048 | $2.583 | $2.544 | $.048 | $2.592 | 0.4% | 0.0% | 0.4% |
| RETAIL NONCORE (6) | |||||||||
| Industrial - Distribution | $.608 | $.128 | $.736 | $.610 | $.128 | $.739 | 0.4% | 0.0% | 0.4% |
| Industrial - Transmission | $.339 | $.066 | $.405 | $.340 | $.066 | $.406 | 0.3% | 0.0% | 0.2% |
| Industrial - Backbone | $.126 | $.066 | $.191 | $.126 | $.066 | $.192 | 0.7% | 0.0% | 0.5% |
| Electric Generation - Transmission (G-EG-D/LT) | $.344 | $.344 | $.345 | $.345 | 0.3% | 0.3% | |||
| Electric Generation - Backbone (G-EG-BB) | $.139 | $.139 | $.140 | $.140 | 0.6% | 0.6% | |||
| NGV 4 - Distribution (uncompressed service) | $.608 | $.048 | $.656 | $.610 | $.048 | $.659 | 0.4% | 0.0% | 0.4% |
| NGV 4 - Transmission (uncompressed service) | $.329 | $.048 | $.378 | $.330 | $.048 | $.378 | 0.3% | 0.0% | 0.2% |
| WHOLESALE CORE AND NONCORE (G-WSL) (6) | |||||||||
| Alpine Natural Gas | $.262 | $.262 | $.263 | $.263 | 0.3% | 0.3% | |||
| Coalinga | $.264 | $.264 | $.265 | $.265 | 0.3% | 0.3% | |||
| Island Energy | $.284 | $.284 | $.285 | $.285 | 0.3% | 0.3% | |||
| Palo Alto | $.257 | $.257 | $.258 | $.258 | 0.3% | 0.3% | |||
| West Coast Gas - Castle | $.577 | $.577 | $.580 | $.580 | 0.5% | 0.5% | |||
| West Coast Gas - Mather Distribution | $.792 | $.792 | $.796 | $.796 | 0.5% | 0.5% | |||
| West Coast Gas - Mather Transmission | $.266 | $.266 | $.267 | $.267 | 0.3% | 0.3% | |||
- (1) Transportation-Only rates include: (i) a transportation component that recovers customer class charges, customer access charges, CPUC fees, local transmission (where applicable), distribution costs (where applicable), and the Assembly Bill 32 Cost of Implementation fee (wholesale and certain large customers are directly billed by the California Air Resources Board, and are exempt from PG&E's AB 32 COI rate component of $0.00294 per therm).
- (2) A 2004 decision (D.04-08-010) authorized PG&E to remove the gas Public Purpose Program surcharge that recovers the costs of low-income California Alternate Rates for Energy (CARE), low-income energy efficiency, energy efficiency, the Research Development and Demonstration program and BOE/CPUC administration costs from transportation rates and into its own separate surcharge tariff. Certain customers are exempt from paying the PPP surcharge.
- (3) Rates are rounded up to three decimals for viewing ease. Percentage rate changes are calculated on a five-digit basis.
- (4) CARE customers receive a 20% discount off of PG&E's total bundled rate and are exempt from the CARE portion of PG&E's PPP surcharge (G-PPPS) rates and cost recovery of the California Solar Initiative Thermal program.
- (5) Billed transportation rates paid by all customers include an additional GHG Compliance Cost of $0.08595 and Operational Cost component of $-0.00005.
- (6) Covered entities within classes and the wholesale class (i.e., customers that currently have a direct obligation to pay for allowances directly to CARB) will see a line-item credit on their bill equal to the GHG Compliance Cost of $0.08595 per therm times their monthly billed volumes.
INSTANT ANALYSIS
This is a modest, across-the-board increase. The entire $20 million revenue increase flows from a single cost recovery driver (the WMCE decision from earlier this month) with no base rate changes, no new tariff structures, and no General Rate Case adjustments embedded.
- A "Separately Funded Projects" line carries the full $19.7 million load before Revenue Fees and Uncollectibles, with the remaining $318 thousand attributable to RF&U. Everything else in the revenue requirement (local transmission, distribution base, balancing accounts, GHG costs) is held flat from January.
- On a per-therm basis, the increases run approximately $0.001 to $0.004 depending on customer class, producing percentage changes clustered between 0.2% and 0.7% across the board. Industrial Backbone registers the largest percentage move at 0.7% (a function of its low base rate, not the magnitude of the underlying cost shift).
- For covered entities (including the oil company and industrial customers who comprise some of CRI's readership) the effective net increase is smaller still. The GHG compliance cost of $0.08595/therm is embedded in every billed rate, but covered entities receive that amount back as a line-item credit, partially offsetting the nominal increase.
- The PPP surcharge is structurally unchanged across all classes, a consequence of the cost separation established in D.04-08-010. Wholesale customers (G-WSL) face the smallest absolute increases in the filing ($0.001/therm across Alpine, Coalinga, Island, and Palo Alto) and remain exempt from the PPP surcharge entirely.
The main story is $20 million of wildfire cost recovery landing on gas customers effective March 1, with the burden falling disproportionately on core residential and small commercial ratepayers who absorb $16.4 million of the total increase and lack the covered-entity offsets available to industrial and electric generation customers.
WHO SHOULD CARE
- Noncore industrial and electric generation customers. If you're taking gas at distribution, transmission, or backbone level under rate schedules G-NT or G-EG, your transportation rate is moving March 1. The increases are small but they're real, and if you're running high volumes, the per-therm math adds up. Covered entities should confirm their billing system is properly applying the GHG compliance cost credit to net the increase down.
- Gas traders and trading desks should note this filing as a cost basis input. It doesn't contain market-moving numbers, but March 1 is a clean effective date and the per-therm shifts need to be reflected in any California gas transportation cost modeling.
- Wholesale customers. Palo Alto, Coalinga, Island Energy, Alpine, and West Coast Gas have the smallest exposure here but should confirm the $0.001/therm adjustment is captured in their tariff tracking.
- Regulatory affairs teams at utilities and large industrials monitoring D.26-02-004 implementation should treat this as confirmation that the WMCE revenue requirement is now flowing into rates.
Anyone considering a protest has until March 16. Given the Tier 1 designation and compliance-only nature of the filing, opposition is unlikely. But parties who contested costs in the underlying WMCE proceeding should verify the authorized amounts implemented here ($14.6 million in gas distribution, $5.4 million in gas transmission) match their expectations from D.26-02-004.