> ## Content Index > Fetch the complete content index at: https://www.calregulatory.com/llms.txt > Use this file to discover other available public pages before exploring further. # PG&E Update: Rule 30 Cost-Shift Fight, Capital Structure Denial - URL: https://www.calregulatory.com/pg-e-update-data-center-cost-shift-fight-capital-structure-denial/ - Published: 2026-05-27T12:35:22.000Z - Updated: 2026-06-01T04:33:05.000Z - Author: MC - Tags: Rule 30, ERRA Compliance, Transmission Access Charge, Resolution E-5420, RM26-4-000, EITE In today's PG&E-focused briefing: - Parties submit reply briefs in the CPUC's Rule 30 docket; - A new PD denies PG&E's request to exclude approximately **$2.6 billion** in wildfire liabilities and a state loan from its capital structure calculations; and - A proposed settlement resolves all disputed issues in PG&E's [2024 ERRA compliance](https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M557/K607/557607577.PDF?ref=calregulatory.com) proceeding. --- ### TRANSMISSION-LEVEL INTERCONNECTION Parties in PG&E's Rule 30 proceeding filed reply briefs on May 22, deepening the dispute over who bears the cost of transmission upgrades required to serve data centers and other large new loads. In the same week, PG&E made a coordinated [ex parte pitch](https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M607/K627/607627861.PDF?ref=calregulatory.com) to all five commissioner offices. The pitch was a summary of PG&E's position: Type 4 Transmission Network Upgrade costs should continue flowing through the Transmission Access Charge rather than being assigned upfront to individual customers. In PG&E's view, the [Resolution E-5420](https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M586/K498/586498115.PDF?ref=calregulatory.com) **75%** revenue refund approach is proven, supported, and low-risk. Requiring upfront Type 4 financing would drive load to publicly owned utility territory or out of California entirely, leaving existing ratepayers holding upgrade costs with none of the rate-reduction benefit. PG&E illustrated the point with a Silicon Valley Power example: a CAISO-approved 230 kV line estimated at **$593 million** to **$858 million**, whose costs would flow through TAC regardless of whether the associated load ultimately lands in PG&E territory. PG&E also told commissioners that no customer has yet used interim Rule 30 implementation, arguing that uncertainty around Type 4 cost treatment and refund timing has frozen uptake. Below is a recap of the reply briefs. - PG&E [defends](https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M607/K309/607309911.PDF?ref=calregulatory.com) Rule 30 as a framework that will lower existing customer bills, arguing that intervenor proposals for upfront Type 4 financing are anti-competitive and unnecessary given the protections already in the tariff. PG&E also pushes back on TURN's battery storage requirement as unsupported by the record, rejects Cal Advocates' Revenue Cap methodology as flawed, and opposes CLECA's exemption request on the grounds that industrial and data-center customers present similar interconnection risks. Last, PG&E asks the CPUC to approve a [May 7 partial settlement agreement](https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M606/K273/606273116.PDF?ref=calregulatory.com) on reporting and information-sharing. - [TURN](https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M607/K313/607313660.PDF?ref=calregulatory.com), [Sierra Club](https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M607/K356/607356382.PDF?ref=calregulatory.com), [NRDC](https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M606/K868/606868104.PDF?ref=calregulatory.com), and [Cal Advocates](https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M606/K889/606889820.PDF?ref=calregulatory.com) largely align around the argument that Rule 30 as proposed exposes existing ratepayers to unacceptable cost-shift risk from speculative hyperscale load. All four call for upfront financing requirements, direct cost-assignment mechanisms, or refundable load-development fees grounded in cost causation and beneficiary-pays principles. - TURN advances a refundable **$667/kW** interim load-development fee for loads of 25 MW or above. Cal Advocates proposes the same figure as one of several interim options alongside a flat **$50 million** fee, with its primary emphasis on a Revenue Cap methodology and Resolution E-5420-based refund approach. Both parties treat Resolution E-5420 as a fallback rather than a preferred endpoint. - Sierra Club and NRDC frame the dispute as a fairness question: whether unprecedented data-center growth should be socialized onto existing ratepayers or assigned proportionally to the customers driving it. Both reject PG&E's FERC preemption argument, citing the CPUC's own filing in [FERC Docket RM26-4-000](https://www.ferc.gov/rm26-4?ref=calregulatory.com), in which the CPUC affirmatively argued that large-load interconnection cost allocation remains a matter of state jurisdiction. - CLECA [does not oppose](https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M607/K132/607132965.PDF?ref=calregulatory.com) Rule 30 itself, but argues PG&E is misapplying data center-driven risk provisions to decarbonizing and Emissions Intensive Trade Exposed customers that do not present comparable stranded-load risks. CLECA urges the CPUC to allow such customers to access Rule 30 or continue under existing exceptional-case procedures, without being subject to the heightened minimum demand charges, extended contract terms, and early termination obligations built for speculative hyperscale load. - CalCCA's [reply brief](https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M606/K889/606889819.PDF?ref=calregulatory.com) reflects its settled position. With reporting and information-sharing issues resolved through the May 7 partial settlement with PG&E, Cal Advocates, and Sierra Club, CalCCA takes no position on cost allocation, jurisdiction, or stranded-cost protection. Its one remaining dispute is PG&E's proposed privacy and cybersecurity review requirements for CCAs receiving Rule 30 customer data. **INSTANT ANALYSIS:** The identical ex parte deck delivered to all five commissioner offices two days before reply briefs shows where PG&E sees its exposure. PG&E is pushing Resolution E-5420 as the endpoint, but TURN and Cal Advocates treat that resolution as a floor, and Sierra Club and NRDC want something more direct. The bigger question is whether the CPUC's final decision separates hyperscale data-center load from policy-aligned industrial load growth. --- ### UTILITY FINANCES/COST OF CAPITAL The CPUC issued a [proposed decision](https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M606/K933/606933345.PDF?ref=calregulatory.com) denying PG&E's request to exclude approximately **$2.6 billion** in wildfire liabilities and a state loan from its capital structure calculations. PG&E sought to exclude debt and equity impacts tied to: - The 2019 Kincade Fire; - The 2021 Dixie Fire; and - A **$1.4 billion** forgivable Department of Water Resources loan tied to the Diablo Canyon extension. PG&E argued the exclusions would preserve financing flexibility and avoid more expensive equity issuances. **ALJ Nojan** finds that PG&E is seeking waiver-equivalent relief under Affiliate Transaction Rule IX-B without meeting the rule's threshold requirements, and that calling it a "limited capital structure adjustment" is semantics. The PD rejects PG&E's request on three separate grounds. The wildfire costs amount to only 0.6% of equity, below the rule's 1% adverse financial event threshold. The PD refuses to aggregate the Kincade and Dixie events (unrelated incidents occurring years apart) to manufacture a qualifying reduction. And the DWR loan fails independently: a forgivable loan is not an adverse financial event. Prior CPUC approvals for PG&E and SCE involved financial shocks of a fundamentally different magnitude: - PG&E's 2020 waiver covered **$8.9 billion** in wildfire costs; and - SCE's approved request would have represented approximately 10% of equity. Neither offers persuasive precedent. On affordability, the PD sides with TURN and EPUC: excess leverage raises borrowing costs, pressures credit ratings, and inflates shareholder returns tied to an authorized equity ratio that already diverges substantially from PG&E's actual capital structure. TURN's record shows PG&E's actual equity has run 7 to 10 percentage points below its authorized 52% since 2021, producing an estimated $2.4 billion in shareholder profits from ratepayers. The earliest the CPUC will consider this item is **July 2**. Comments are due **June 10**. **INSTANT ANALYSIS:** The PD is a denial on every front: threshold, aggregation, and loan classification. The CPUC is not interested in creative labeling as a substitute for meeting the rule's conditions. The affordability section carries the PD's most consequential implications. The ALJ declines to accept PG&E's carrying-cost argument at face value and instead gives weight to TURN's critique: that operating with debt excluded from capital structure calculations allows PG&E to compensate shareholders based on an inflated authorized equity ratio while ratepayers absorb the leverage risk. That theory is now on record and may travel into Cost of Capital proceedings, wildfire financing debates, and affordability dockets. --- ### ERRA COMPLIANCE PG&E, Cal Advocates, and the California Community Choice Association filed a [joint motion seeking CPUC approval of a settlement](https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M607/K309/607309916.PDF?ref=calregulatory.com) resolving all disputed issues in PG&E's [2024 Energy Resource Recovery Account compliance](https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M557/K607/557607577.PDF?ref=calregulatory.com) proceeding. This proceeding reviewed PG&E's 2024 utility-owned generation operations, fuel procurement, Resource Adequacy accounting, portfolio balancing entries, contract administration, and related activities. Both Cal Advocates and CalCCA initially protested portions of PG&E's application. Both now support approval subject to settlement terms developed through testimony, supplemental testimony, discovery, and negotiations. The settlement resolves four substantive disputes. - On a [Humboldt Bay](https://en.wikipedia.org/wiki/Humboldt%5FBay%5FNuclear%5FPower%5FPlant?ref=calregulatory.com) Unit 3 exhaust valve failure, Cal Advocates withdrew its demand for an outside metallurgical review after PG&E confirmed the failed valve had been recycled. In its place, PG&E agreed to hire an outside consultant to conduct a root-cause analysis and provide findings to Cal Advocates if a repeat exhaust valve failure causes another forced outage. - On balancing account scope, PG&E agreed to include four accounts in future ERRA compliance reviews that Cal Advocates had sought: the New System Generation Balancing Account, Modified Transition Cost Balancing Account, Tree Mortality Non-Bypassable Charge Balancing Account, and BioMat Non-Bypassable Charge Balancing Account. - On Resource Adequacy, CalCCA accepts that PG&E reasonably calculated retained RA using final derated capacity values for monthly compliance filings and does not need to revise its 2024 accounting. - On PCIA customer vintaging, CalCCA accepts PG&E's supplemental testimony regarding customers who opt out of CCA service, later opt back in, and relocate within the same CCA territory, concluding that PG&E's billing assigns vintages consistent with CPUC directives. Of 156 customers meeting those criteria, PG&E identified **one** improperly vintaged customer, attributing the error to human error rather than a system logic defect. **INSTANT ANALYSIS:** The proposed settlement contains no disallowances, no prudency findings against PG&E, and no accounting revisions for the record period. After more than a year of testimony, supplemental testimony, and reopened discovery, Cal Advocates and CalCCA arrive at procedural refinements rather than financial consequences. The most substantive forward-looking change is the expansion of ERRA compliance review scope to four additional balancing accounts. CalCCA effectively accepts PG&E's retained RA accounting methodology and PCIA billing methods, while the Humboldt Bay dispute resolves into a contingent outside-consultant commitment triggered only by a repeat failure. For PG&E, this is a favorable compliance outcome.