Electric Costs

The CPUC approves the amount that each electric utility can collect from its customers. This is a utility’s “revenue requirement” and it is based on the cost of operating, maintaining, and financing the infrastructure used to run the utility; and on the cost of its procured fuel and power. The revenue requirement forms the basis for how electric rates get determined for each customer class.

The CPUC regulates California’s three large investor owned electric utilities – Pacific Gas and Electric (PG&E), Southern California Edison (SCE), and San Diego Gas and Electric (SDG&E) – as well as three smaller, multi-jurisdictional utilities: Bear Valley Electric Service, PacifiCorp, and Liberty Utilities. These multi-jurisdictional utilities provide electric services to small areas of California and outside the state. While the ratemaking for multi-jurisdictional utilities has some similarities to that of the big three, it also differs in several ways. For more information, see (More about ratemaking for the multi-jurisdictional electric utilities)

Main Cost Proceedings

The following types of regulatory proceedings determine the revenue requirements for California utilities. See links below for more specific information about proceedings and proceeding types:

General Rate Case (GRC) proceedings authorize the amounts utilities can charge their customers for the cost to own, operate, and maintain their facilities. GRCs occur on a three year cycle for each of the big three utilities, and less frequently for the multi-jurisdictional utilities.

Energy Resource Recovery Account (ERRA) proceedings (and their multi-jurisdictional utility counterpart proceedings) authorize the amounts the utilities can charge customers for the cost of purchasing fuel and power.

Nuclear issues before the Commission deal with the electric costs of power plants, ratepayer funding of and disbursement from the decommissioning trust funds, seismic studies at Diablo Canyon, and the SONGS investigation, among others.

Cost of Capital (COC) proceedings set the utilities’ costs to acquire funds to finance the company’s investment and operation. The Cost of Capital is the weighted average cost of debt, preferred, and common stock utilities have issued to finance their investments.

At the end of each proceeding, the Commission issues a decision. (See Historical Decisions)

Rates and Cost Reporting

For Catastrophic Event Memorandum Account notification letters, click here
For historical data on electric costs by utility, click here
For Risk Spending Accountability Reports, click here
For links to various reports on utility costs, including annual reports, executive compensation, and legislative reports (AB 67 and SB 695), click here
Balancing account reports, click here

Workshops Held by the Electric Costs Section

From time to time the Electric Costs Section runs workshops on different topics. Click here.

Other Cost Proceedings

In addition to the above proceedings, there are others that approve smaller amounts of revenue requirement, including but not limited to:

California Solar Initiative (CSI)
The Self-Generation Incentive Program (SGIP)
Demand Response (DR) programs
Public purpose programs such as Energy Efficiency and the California Alternate Rates for Energy Program (CARE)
DWR power and bond charges

** Public Utilities Code section 451 requires that the CPUC determine whether a utility’s proposed rates, services, and charges are just and reasonable. **