March 1, 2026 SoCalGas Rate Increase

SoCalGas filed Advice Letter 6605-G (available here) to implement interim increases to its natural gas transportation rates effective March 1.

SoCalGas seeks to recover $35.5 million in costs recorded in its Distribution Integrity Management Program Balancing Account for 2019–2023, as authorized by a CPUC decision earlier this month (D.26-02-006; see CRI's coverage here).

CPUC Adopts New Flexible Service Connection Rules

Topics covered: energization, wildfire cost recovery, SoCalGas Distribution Integrity Management Costs, crude oil transportation.

CALIFORNIA REGULATORY INTELLIGENCEMC

The $35.5 million represents a partial authorization of SoCalGas's original motion, which had requested interim recovery of 85% of $59.1 million in under-collected costs, with the final determination of reasonable spending still pending in the underlying application (A.25-08-008).

The filing also incorporates related rate impacts from SDG&E’s approved non-officer compensation costs under Resolution E-5405 (see CRI's coverage here) due to system-wide averaging ratemaking between the utilities.

The interim recovery will be collected over a 12-month period using the Equal Percent of Authorized Margin allocation method, with any over-collection to be refunded with interest if the CPUC later approves a lower amount.

The changes produce modest adjustments across customer classes (primarily increases for core and noncore transportation customers) and update multiple tariff schedules accordingly, with an estimated overall revenue and rate effect of about 0.7%.

Protests are due March 16. Illustrative rates are provided below.

INSTANT ANALYSIS

This filing puts the Commission’s interim authorization into effect by starting cash recovery of Distribution Integrity Management Program integrity spending while the underlying reasonableness review is still pending, moving the matter from litigation posture to active rate collection.

The Equal Percent of Authorized Margin allocation method and system-wide averaging spread impacts across customer classes and between SoCalGas and SDG&E, softening bill effects for any single group but embedding the costs broadly in transportation rates.

Because the recovery is subject to refund if a lower amount is approved later, the advice letter functions as bridge financing for the utility rather than a final determination, though it may create inertia around the interim level. Notably, the CPUC authorized only $35.5 million against a request of $59.1 million, meaning the gap between the interim amount and the originally sought figure remains live in the underlying proceeding.

The near-term implication is modest upward pressure on gas transportation costs starting March 2026, with additional adjustments likely once the CPUC issues a final decision on the Distribution Integrity Management Program application.

WHO SHOULD CARE?

• Large noncore gas customers, electric generators, and marketers moving gas on the SoCalGas system should pay attention to this filing because the interim recovery flows directly through transportation rates, raising delivered fuel costs beginning in March.
• Load-serving entities and procurement teams should also track the filing since system-wide averaging means SDG&E customers are affected as well, and future true-ups could alter cost forecasts.
• Industrial users, liquefied natural gas and biomethane project developers, and counterparties negotiating gas supply or tolling arrangements will want to incorporate the higher transportation baseline into contracts and hedging assumptions.
• Finally, intervenors in the Distribution Integrity Management Program proceeding should note that, once interim dollars are flowing, reversing them becomes harder even if portions of the spending are later disallowed.