PG&E Files Natural Gas Rate and PPP Surcharge Updates
PG&E filed Advice Letter 5139-G to implement its Annual Gas True-Up for natural gas transportation rates effective January 1, 2026. The filing reconciles balances in various transportation balancing accounts for core and noncore customers, updates revenue requirements, and projects 2026 transportation Public Purpose Program (PPP) surcharge revenues.
PG&E estimates a total 2026 gas transportation revenue requirement of $5.96 billion, which is a slight decrease from current levels. This includes higher end-use transportation and storage costs but a significant reduction in PPP surcharge revenue needs.
PG&E projects an overall $208 million undercollection across its gas transportation balancing accounts by the end of 2025, which it seeks to amortize in 2026 rates. Major drivers of account balances include undercollections in the Core Fixed Cost Account, overcollections in noncore accounts, Assembly Bill 32 implementation fees, hazardous substance cleanup costs, wildfire mitigation-related adjustments, and cost adjustments from other proceedings such as cost-of-capital, Advanced Metering Infrastructure, and wildfire cost recovery decisions.
A separate filing in late December will consolidate final authorized revenue requirements and updated balancing account forecast. Protests are due November 20.
INSTANT ANALYSIS: Per PG&E's outlook, core residential and small commercial customers will see modest decreases, largely due to lower Public Purpose Program surcharges. Industrial and electric generation customers may receive deeper reductions (–8% to –17%) as PG&E amortizes undercollections and resets balancing account recoveries. As with previous years, a separate PG&E filing in December will finalize revenue requirements and balancing account forecasts (and modify many of these projections).
PG&E - January 1, 2026
Average End-User Natural Gas Transportation Rates and PPP Surcharges ($/th)
| Sept 2025 | Jan 2026 | Change | |||||
|---|---|---|---|---|---|---|---|
| Trans | G-PPPS | Total | Trans | G-PPPS | Total | % | |
| RETAIL CORE | |||||||
| Residential Non-CARE | 2.261 | .143 | 2.404 | 2.244 | .121 | 2.366 | -1.6% |
| Small Commercial Non-CARE | 1.483 | .128 | 1.612 | 1.437 | .106 | 1.544 | -4.2% |
| Large Commercial | .924 | .104 | 1.028 | .855 | .085 | .940 | -8.6% |
| NGV1 (uncompressed) | .975 | .062 | 1.037 | .908 | .048 | .956 | -7.8% |
| NGV2 (compressed) | 2.618 | .062 | 2.679 | 2.572 | .048 | 2.620 | -2.2% |
| RETAIL NONCORE | |||||||
| Industrial Distribution | .800 | .153 | .953 | .665 | .128 | .794 | -16.7% |
| Industrial Transmission | .408 | .082 | .490 | .372 | .066 | .438 | -10.6% |
| Industrial Backbone | .163 | .082 | .245 | .139 | .066 | .205 | -16.1% |
| Electric Gen: Transmission | .410 | -- | .410 | .377 | -- | .377 | -8.1% |
| Electric Gen: Backbone | .177 | -- | .177 | .153 | -- | .153 | -13.9% |
| NGV4 Dist (uncompressed) | .800 | .062 | .862 | .665 | .048 | .714 | -17.2% |
| NGV4 Trans (compressed) | .394 | .062 | .456 | .361 | .048 | .410 | -10.1% |
| WHOLESALE CORE & NONCORE | |||||||
| Alpine Natural Gas | .265 | -- | .265 | .292 | -- | .292 | +10.2% |
| Coalinga | .266 | -- | .266 | .294 | -- | .294 | +10.3% |
| Inland Energy | .283 | -- | .283 | .314 | -- | .314 | +10.8% |
| Palo Alto | .260 | -- | .260 | .287 | -- | .287 | +10.1% |
| West Coast Gas – Castle | .717 | -- | .717 | .635 | -- | .635 | -11.5% |
| WC Gas – Mather Dist | 1.032 | -- | 1.032 | .869 | -- | .869 | -15.8% |
| WC Gas – Mather Trans | .268 | -- | .268 | .296 | -- | .296 | +10.3% |
Separately, PG&E filed Advice Letter 5138-G to update its Public Purpose Program surcharge rates, which fund statewide energy efficiency, low-income assistance, California Alternate Rates for Energy (CARE) program administration, research and development, and California State Board of Equalization (BOE) administrative costs. PG&E proposes that the revised surcharge rates take effect January 1, 2026.
PG&E estimates total 2026 gas PPP funding at $216.8 million, plus adjustments including a projected CARE program revenue shortfall of $202.5 million and the amortization of a $26.4 million overcollection across PPP balancing accounts, for an overall funding requirement of approximately $392.8 million.
Summary of Natural Gas PPP Surcharge Funding
2026
| Gas PPP funding | $216,765,197 |
| PPP Balancing Account Balances Amortized in Rates (9/30/2025 recorded and forecasted through 12/31/2025) |
($26,407,689) |
| Projected CARE Revenue Shortfall | $202,460,275 |
| Total of Gas 2026 Public Purpose Program Authorization Funding | $392,817,783 |
Major components of the $216.8 million include:
- $127.6 million for Energy Efficiency;
- $80.3 million for the Energy Savings Assistance program (reduced by $4.8 million in unspent funds);
- $3 million for CARE administration;
- $10.2 million for Research, Development and Demonstration; and
- $414,000 for BOE administration.
The surcharge also incorporates updated customer gas volumes and continues to exclude customers legally exempt under state law. Residential CARE customers will see a PPP rate of 7.522¢/therm, while non-CARE residential customers will pay 12.103¢/therm.
PPP Surcharge Rates by Customer Class
¢/therm
| Customer Class | Rate (¢/therm) | |
|---|---|---|
| CARE | Non-CARE | |
| CORE | ||
| Residential | 7.522 | 12.103 |
| Small Commercial | 6.064 | 10.645 |
| Large Commercial | 3.893 | 8.474 |
| Natural Gas Vehicle (G-NGV1/G-NGV2) | -- | 4.830 |
| NONCORE | ||
| Industrial Distribution | -- | 12.830 |
| Industrial Transmission/Backbone | -- | 6.587 |
| Natural Gas Vehicle (G-NGV4) | -- | 4.830 |
| Liquefied Natural Gas | -- | 4.830 |
Protests are due November 20.