THURSDAY BRIEFING: SDG&E's 2027 ERRA Forecast; Biomethane EITE Exemptions; SoCalGas Line 225 Repairs
Today's briefing looks at SDG&E's 2027 ERRA Forecast submission, with additional updates on biomethane cost allocation, PG&E's natural gas transmission assets, and SoCalGas's latest news on Line 225.
SDG&E 2027 ERRA FORECAST
SDG&E filed its 2027 ERRA Forecast Application at the CPUC on May 15, seeking approval of an $893 million procurement-related revenue requirement, a 1.5% increase from currently effective levels. New rates would take effect January 1, 2027.
The ERRA revenue requirement falls 3.3% to $379.3 million, with a projected $45 million overcollection. The Portfolio Allocation Balancing Account rises 71% to $301.4 million, partially offset by a prior-year balance reduction from $296.7 million to $144.8 million. Local Generation rises to $285.4 million, reflecting continued recovery of costs tied to Cost Allocation Mechanism-approved peakers, storage facilities, and microgrids. The various account shifts net $12.9 million above currently effective levels.
Bundled customers see an approximate 1.2% rate decline, aided by California Climate Credit returns; a typical 400 kWh residential customer sees no bill movement. Unbundled customers face a 1.4% increase in delivery-plus-PCIA charges. For that audience, SDG&E's October update matters more than the May filing: Track 2 of R.25-02-005 is still resolving pre-2019 REC valuation, and any Commission directive flows directly into PCIA rates when 2026 Market Price Benchmarks arrive in October.
SDG&E forecasts $181.4 million in GHG allowance revenues: $137.8 million returned via California Climate Credits, $2.8 million to EITE customers. The filing also picks up the new Transmission Accelerator Revolving Fund obligation: 5% of qualifying GHG auction revenues remitted to the state beginning July 1, 2026, due within 15 days of receipt.
Below are illustrative rates.
CRI's coverage of PG&E and SCE's 2027 ERRA Forecast filings is available here.
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INSTANT ANALYSIS: The 1.5% increase and declining bundled rates obscure what is moving in the accounts: a 71% PABA increase tied to above-market portfolio cost recovery, Local Generation growth from previously approved CAM resources, and a new TARF remittance claim on auction proceeds beginning mid-2026.
BIOMETHANE
The ALJ issued a second supplemental comment ruling in the biomethane cost-allocation proceeding (R.22-12-011), reopening two questions tied to who ultimately bears Renewable Gas Standard above-market costs.
- The first issue asks parties to reassess prior positions in light of the CPUC's April 30 decision on the Renewable Gas Standard (D.26-04-044), which revised portions of the program to streamline implementation and constrain above-market ratepayer exposure. Because that decision addressed overlapping topics (including Renewable Thermal Certificate rules and biomethane interconnection costs), the ALJ is asking whether any findings, conclusions, or orders in D.26-04-044 affect positions parties have already taken in this proceeding.
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- The second issue carries greater commercial significance for large gas users. The ruling again raises whether Energy Intensive Trade Exposed noncore customers should have a pathway to exemptions if Renewable Gas Standard above-market costs are ultimately allocated to noncore customers. The ALJ is seeking input on whether the CPUC should establish a process for developing such exemptions, what criteria should govern eligibility, and whether exemptions would be necessary to avoid emissions leakage. The issue first surfaced in a February 5 supplemental ruling and now returns for a more focused examination.
Opening comments, capped at 10 pages, are due June 3.
NATURAL GAS TRANSMISSION ASSETS
Commissioner Matthew Baker issued a scoping memo in A.25-12-014, setting the procedural roadmap for PG&E's proposed acquisition of full ownership of Standard Pacific Gas Line, currently owned six-sevenths by PG&E and one-seventh by Chevron. The transaction involves an asset sale to PG&E, related transportation agreements preserving Chevron's system access, and a 20-year stock purchase agreement for Chevron's remaining stake.
LINE 225 UPDATE
SoCalGas provided an Envoy update on the force-majeure event affecting Line 225 near the I-5 Freeway and Ridge Route Road in Castaic, indicating that geotechnical work has been completed and engineers have finalized the first phase of a repair plan for the damaged pipeline segment.
Construction is expected to begin as early as May 26 and continue for several months, though the timeline remains subject to change. In the meantime, SoCalGas advises customers to monitor the Envoy Capacity Utilization page for available pipeline capacity by scheduling cycle, a reminder that operational constraints tied to the outage remain relevant for shippers managing nominations and system flexibility.