MONDAY AGGREGATE: Interim Rate Relief; Physical Risk; and the Costs of System Continuity
Happy New Year from CRI. Today’s aggregate captures how interim ratemaking, operational outages, and long-dated infrastructure commitments are reshaping cost exposure across California’s energy system.
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NATURAL GAS DISTRIBUTION
Administrative Law Judge Brandon Gerstle issued a proposed decision in A.25-08-008 that grants SoCalGas partial interim rate recovery for costs recorded in its Distribution Integrity Management Program Balancing Account between 2019 and 2023.
The PD authorizes SoCalGas to recover $35.5 million on an interim basis, representing 60% of the $59.1 million requested, for a 12-month period, subject to refund with interest pending a final reasonableness determination. The PD finds that interim recovery is warranted because it:
- Produces direct interest savings for ratepayers (approximately $918,000);
- Promotes intergenerational equity by aligning cost recovery more closely with when costs were incurred; and
- Helps preserve SoCalGas’ financial integrity following a recent credit-rating downgrade, which can indirectly reduce future capital costs.
At the same time, the PD rejects SoCalGas’ request for 85% interim recovery, concluding that a lower percentage better balances ratepayer affordability concerns (particularly in light of recent gas rate increases) while still achieving the public-interest benefits of interim relief. Recovery would be implemented through a Tier 1 advice letter using the Equal Percent of Authorized Margin cost-allocation methodology.
Rate Impacts
SoCalGas provided the following table to demonstrate what transportation rates would look like if its 85% interim relief request were granted (in dollars per therm). Actual impacts under the PD's recommended 60% authorization would be proportionally smaller.