> ## 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. # SATURDAY BRIEFING: SoCalGas Seeks 14.8% BTS Rate Increase as Southern System Faces Supply Deficit - URL: https://www.calregulatory.com/saturday-briefing-socalgas-seeks-14-8-bts-rate-increase-as-southern-system-faces-supply-deficit/ - Published: 2026-07-25T14:00:27.000Z - Updated: 2026-07-25T14:00:26.000Z - Author: MC - Tags: BTS Rates, Backbone Transportation Service, NGI Bidweek, Morongo Band of Mission Indians Good morning. SoCalGas is proposing a **14.8% increase** in Backbone Transportation Service rates, by far the largest percentage increase among the customer categories in its 2028 General Rate Case. The request comes as the Southern System faces a more immediate strain: incoming supplies have fallen below minimum operating requirements, prompting a warning that noncore customers could face curtailment. Meanwhile, the CPUC is considering loosening some of SoCalGas’s gas-purchasing rules in response to declining supplier participation and thin market liquidity. Also: the CPUC has reopened its Building Decarbonization proceeding to consider whether Tribal lands should be exempt from the end of electric line-extension subsidies for mixed-fuel construction. ***If CRI has been useful for your organization,*** [***please consider becoming a paid subscriber today***](https://www.calregulatory.com/pricing-2/). --- ### NATURAL GAS RATES On July 22, CRI reported on [protests](https://www.calregulatory.com/intervenors-zero-in-on-socalgass-gas-transition-bet-in-2028-rate-case/) of the Sempra Utilities' Test Year 2028 General Rate Case applications, which were filed last month. Here is additional intel on [SoCalGas's filing](https://www.socalgas.com/sites/default/files/2026-06/20260615%5FSoCalGas%5FTY%5F2028%5FGRC%5FApplication.pdf?ref=calregulatory.com). SoCalGas is asking the CPUC to approve a TY 2028 revenue requirement of **$5.1 billion**, which is an increase of **$485 million**, or **10.5%**, over its estimated 2027 requirement. The company calls it its smallest requested increase in more than a decade. The request would fund: - Pipeline inspection; - Repair and replacement; - Integrity work on high-pressure lines; - Leak abatement; - Compressor-station modernization; - Replacement of aging technology; - Cybersecurity; and - Customer-service systems. SoCalGas identifies insurance as a significant operating-cost driver, citing higher liability costs and the need for additional wildfire coverage following the 2025 Los Angeles fires. Medical costs also are rising. The company estimates that consolidating field processes would avoid approximately **$9.5 million** in annual labor costs. If the CPUC were to authorize SoCalGas's request, an average non-CARE residential customer using 35 therms per month would pay approximately **$5.67** more, or **7.7%**, beginning **January 1, 2028**. The company estimates that average system rates would rise **6.2%**. Rates would rise **6.3%** for core commercial and industrial customers, **3.7%** for noncore commercial and industrial customers, **2.5%** for electric generators and **14.8%** for backbone transportation service. Wholesale rates would decline **0.2%**. SoCalGas proposes additional revenue increases of **$315 million** in 2029, **$312 million** in 2030 and **$314 million** in 2031 through a mechanism that escalates O&M, including a separate medical adjustment, and capital-related costs. The filing also proposes an earnings-sharing mechanism and seeks to amortize balances in 12 regulatory accounts, close four accounts and three subaccounts, and modify six accounts. **INSTANT ANALYSIS:** Backbone Transportation Service rates have the largest proposed increase at 14.8%, though the comparison with SoCalGas’s 6.2% system average needs context. The system figure is a bundled rate containing commodity costs, public-purpose surcharges and regulatory-account balances that SoCalGas held constant. BTS is a transport demand charge without a commodity component, making the two percentages less directly comparable. The increase does not result from a shrinking billing denominator. SoCalGas used the allocation results and sales volumes adopted in its 2024 cost-allocation proceeding for both the 2027 and 2028 illustrations. Revenue assigned to the combined BTS and unbundled storage category rises by **$131 million**, or **14.4%**, while the BTS rate rises 14.8%. The close movement shows additional GRC-related revenue reaching the category under the same 2024 allocation and volume assumptions, but the testimony does not explain why the increase is so large. Transmission and storage spending is an obvious area for scrutiny. [SCG-05](https://www.socalgas.com/sites/default/files/2026-06/SCG-05%5FGas%5FTransmission%5Fand%5FStorage%5FGina%5FOrozco%5FDirect%5F6126%20Public%5F6127.pdf?ref=calregulatory.com) forecasts GT&S capital expenditures rising **34%**, from **$384.5 million** in 2027 to **$515.2 million** in 2028, with further increases through 2031, while 2028 O&M reaches **$129.1 million**. But capital expenditures do not enter rates dollar for dollar, and storage, insurance, benefits and shared services also contribute to the request. The rate and allocation workpapers will be needed to determine which costs produce the **$131 million** increase and how they reach firm-capacity charges. SoCalGas's accompanying testimony and workpapers is available [here](https://www.socalgas.com/Regulatory/a26-06-014-socalgas-2028-general-rate-case?ref=calregulatory.com). CRI is available to parse these documents to provide a deeper look at the potential rate impacts of this GRC. [Contact us](https://www.calregulatory.com/contact-us/) if interested. [Parties File Protests to Sempra IOUs’ TY 2028 GRCsSoCalGas seeks $5.1 billion for 2028 ($485 million, or 10.5%, above expected 2027) then increases through 2031.![](https://storage.ghost.io/c/36/77/3677b301-4c92-43b7-8e2f-c7265d6b0b59/content/images/icon/Electromagnetic_radiation-1---1--3-c21c5b97-f0b7-4993-afe8-47e3438005d2.png)CALIFORNIA REGULATORY INTELLIGENCEMC![](https://storage.ghost.io/c/36/77/3677b301-4c92-43b7-8e2f-c7265d6b0b59/content/images/thumbnail/iterograph_Sun-Jul-19-2026--13--ba0e5983-4974-4657-9c93-3f762c36f90c.png)](https://www.calregulatory.com/intervenors-zero-in-on-socalgass-gas-transition-bet-in-2028-rate-case/) --- ### GAS SYSTEM RELIABILITY [Draft Resolution G-3620](https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M610/K353/610353724.PDF?ref=calregulatory.com) approves SoCalGas's Southern System reliability purchases and sales for the year ending September 30, 2025\. The utility complied with Gas Rule 41\. SoCalGas made 49 gas purchases costing **$13.4 million** and 54 sales producing **$9.4 million**. Transportation costs added **$1.5 million**. Under the draft resolution, SoCalGas would recover the resulting **$5.5 million** net cost through customer rates beginning **January 1, 2027**. The draft resolution approves three purchases that fell outside Rule 41's standard pricing rules. SoCalGas cited limited suppliers, thin market liquidity, and in one case, an El Paso Natural Gas system constraint. The draft resolution also revises two Rule 41 provisions. - It replaces the baseload price benchmark with a safe harbor set at **110%** of the NGI Bidweek average for the SoCal Border-Ehrenberg point. That provision expires **March 31, 2028**, unless extended; and - It lets SoCalGas contact five suppliers when it can't get the three price offers normally required for spot purchases outside standard ranges. Cal Advocates warned this could weaken competition and invite manipulation. The CPUC responded with conditions: SoCalGas must document supplier outreach, report response rates, and show the alternative process didn't raise costs to ratepayers. That provision expires **June 1, 2029**, unless extended. The earliest the CPUC will consider this item is **August 13**. **INSTANT ANALYSIS:** The draft resolution gives SoCalGas more room to secure gas in a thinning Southern System market. It also weakens the price checks built into the existing rule. The five-supplier fallback doesn't require five offers. It lets SoCalGas buy after contacting five suppliers and getting fewer than the usual three quotes. The reporting rules and 2029 sunset preserve CPUC oversight. SoCalGas’s records must demonstrate genuine supplier scarcity; unsuccessful outreach alone provides weaker evidence. The new baseload safe harbor could also permit higher prices than the fixed **8.2-cent** adder it replaces, especially when border gas prices run high. The CPUC found the old benchmark no longer tracks the border-to-citygate spread. Ratepayers cover what SoCalGas pays. The $5.5 million proposed for recovery shows Southern System reliability costs recur. --- ### NATURAL GAS/CURTAILMENT A July 24 Envoy notice from SoCalGas/SDG&E warns that incoming gas supplies are falling below the Southern System’s minimum operating requirements, prompting the utilities to take measures to manage the deficit. The utilities say customers are worsening the shortfall by reducing supplies late in the nomination process and urge them to match deliveries with usage. If the imbalance continues, the utilities may issue a curtailment watch or curtail noncore customers under SoCalGas Rule 23 and SDG&E [Rule 14](https://www.sdge.com/sites/default/files/elec%5Felec-rules%5Ferule14.pdf?ref=calregulatory.com). **INSTANT ANALYSIS:** The express warning of a possible curtailment watch or curtailment under SoCalGas Rule 23 and SDG&E Rule 14 makes the notice significant for noncore customers, including industrial users and potentially electric generators. Actual curtailments would depend on whether supply and demand return to balance and how the utilities apply their tariff priorities. --- ### BUILDING DECARBONIZATION The CPUC has reopened Phase 3B of its Building Decarbonization rulemaking to weigh whether Tribal lands should be exempt from the end of electric line-extension subsidies for mixed-fuel new construction. A July 23 [amended scoping memo](https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M611/K618/611618034.PDF?ref=calregulatory.com) grants no exemption but adds the question after the [Morongo Band of Mission Indians](https://morongonation.org/?ref=calregulatory.com) argued the policy imposes disproportionate costs on Tribal governments and residents. A 2023 decision ([D.23-12-037](https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M521/K890/521890476.PDF?ref=calregulatory.com), modified by [D.25-06-034](https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M570/K302/570302781.PDF?ref=calregulatory.com) 18 months later) cut allowances, refunds and discounts for extensions to new buildings using gas or propane alongside electricity, effective July 1, 2024. Morongo [asked the Commission](https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M611/K970/611970627.PDF?ref=calregulatory.com) to preserve the subsidies for certified Reservation homes serving Tribal members, residents or housing programs, plus essential community facilities and small member-owned businesses. Reservation development differs from ordinary subdivisions: federal allotment policy split parcels among many heirs, homes go up individually on scattered sites, and distribution infrastructure is limited. One member faces an unsubsidized cost near **$80,000**. Removing the subsidy will not push residents toward all-electric construction, the Tribe argues, because those homes cost more and the Reservation sees frequent power shutoffs and wind-related outages. The Tribe adds that the policy could instead delay housing and impair public safety, health, elder, cultural, water and wastewater services. Morongo proposes that utilities run the exemption through Tribal certification and existing reporting. The CPUC finds Morongo's arguments compelling. It directs the IOUs (and invites other parties) to address whether an exemption should cover Tribal-land construction and whether the policy creates uniquely severe burdens. The ruling also wants lists of prior exemption requests and of Tribal-land projects pending, underway or completed without subsidies, and asks whether relief should reach projects a Tribe approved before D.23-12-037\. Comments are due **August 14**. **INSTANT ANALYSIS**: This proceeding could yield a statewide exemption letting new mixed-fuel buildings on Tribal lands keep line-extension allowances, refunds and discounts. Question 1 of the scoping memo asks whether an exemption should apply to every electric IOU rather than SCE alone, which would extend relief to Tribal lands in PG&E and SDG&E territories. Eligibility could extend beyond homes to Tribal government facilities, essential community services and member-owned businesses, with Tribes certifying eligibility and utilities implementing the exemption through advice letters. The CPUC is also weighing relief for projects a Tribe approved before D.23-12-037 that stalled or went on hold, raising the possibility of restoring subsidies for some held up since the rule took effect. It first asks the IOUs to identify those projects and propose an implementation process before setting how far relief reaches. ![](https://storage.ghost.io/c/36/77/3677b301-4c92-43b7-8e2f-c7265d6b0b59/content/images/2026/07/iterograph_Thu-Jul-16-2026--11--1.png)