Proposed Decision Released in PG&E 2015 Gas Transmission & Storage Rate Case

On December 19, 2013, Pacific Gas and Electric (PG&E) filed its 2015 Gas Transmission & Storage Rate Case (PGE GTS). Overall, PG&E requested nearly $4 billion in revenue under the new proposal between 2015 and 2017. If granted, noncore industrial users would see transportation rates increase by 57.9%.  

However, after nearly three years the California Public Utilities Commission (CPUC) has issued a Proposed Decision in the PGE GTS, and the practical application of the increase supported by CPUC suggests the commission is willing to go far beyond the previously suggested rate increase.

Based upon the Proposed Decision from CPUC, approximately 87% of PG&E’s three-year GT&S cycle revenue request may be approved, as well as the amortization of PG&E’s Gas Transmission & Storage Memorandum Account (GTSMA) over an 18-month period beginning July 1, 2016. Accordingly, approval of the current Proposed Decision, as is, will likely increase noncore industrial transmission customers’ 2016 rates by 126.6%, followed by a further 5.5% increase in 2017. In combination, this means that approval of the Proposed Decision will force noncore industrial transmission customers to pay rates in 2017 that are 139.3% more than currently required.

In submitted comments, CLFP and the California Manufacturers & Technology Association (CMTA) have advised the commission that the Proposed Decision virtually ignores the issues of affordability and rate shock for noncore customers. Pointing out that these rate increases are unprecedented and untenable and far exceed what the commission previously had determined to be "rate shock."

CLFP/CMTA continued to remind the commission that the only way to mitigate these unprecedented and untenable rate increases and bill impacts is to reduce the three-year GT&S cycle revenue requirement proposed in the PD. In addition, CLFP/CMTA supported the recommendation by the Office of Ratepayers Advocates that PG&E provide illustrative rates on the basis of a phased-in rate increase approach, where the goal is to avoid rate shock to the different customer classes, the idea being that PG&E could implement any rate increases gradually over a four to six-year period.  Finally, CLFP/CMTA strongly recommended that PG&E’s GTSMA be amortized over a 30-month period, if not longer.

The commission is expected to take up this Proposed Decision by June 9, 2016.