PG&E Proposal Will Power California's Growth and Resilience While Stabilizing Customer Bills

Rhea-AI Summary

PG&E (PCG) has submitted its 2027-2030 General Rate Case (GRC) proposal to California regulators, featuring its smallest percentage increase in a decade. The proposal aims to stabilize customer bills while improving system safety and reliability. Key highlights include: - Residential combined bills expected to be flat in 2027 compared to 2025, with potential decreases if electric demand grows - Company has reduced operating and capital costs by $2.5 billion over past three years - GRC proposal would increase bills by maximum 3.6% in 2027, but total bills expected to remain flat due to offsetting cost reductions - Plans include modernizing grid for 3 million EVs by 2030, replacing 760 miles of powerlines, undergrounding 307 miles in high-fire-risk areas, and replacing 164 miles of gas distribution pipeline - Additional savings potential through $15 billion DOE loan guarantee, which could save customers $1 billion over loan life

Positive

• Smallest GRC percentage increase in a decade, showing cost control efforts
• Cost reductions of $2.5 billion achieved over past three years
• $15 billion DOE loan guarantee could save customers $1 billion over loan life
• Expected flat bills in 2027 compared to 2025, with potential decreases
• Comprehensive infrastructure improvements including 760 miles of powerline replacements
• 98% risk reduction in high-fire areas through underground powerline placement

Negative

• 3.6% bill increase from GRC proposal in isolation
• Individual customer bills may vary based on location and usage
• Significant capital expenditure required for infrastructure improvements

Insights

Utility Regulatory Analyst

PG&E's rate case proposes minimal bill impacts through 2030 while funding critical infrastructure upgrades, demonstrating improved financial efficiency.

PG&E's 2027-2030 General Rate Case (GRC) filing represents a strategic shift for the utility, requesting its smallest percentage increase in a decade while simultaneously advancing critical infrastructure investments. The company has achieved approximately $2.5 billion in cost reductions over the past three years through operational efficiencies and technological improvements, allowing these savings to be passed to customers.

What's particularly notable is PG&E's projection that residential combined bills will remain flat in 2027 compared to 2025 levels, despite the GRC's isolated 3.6% increase. This is possible because other costs will roll off rates in 2026, including expenses related to the previous GRC cycle, wildfire mitigation, and storm recovery. The company even forecasts lower bills in 2026 compared to current rates.

The proposal balances four critical infrastructure priorities: grid modernization to accommodate demand growth from electrification and data centers, wildfire safety improvements, clean energy delivery enhancements, and gas system upgrades. Key components include replacing 760 miles of power lines with stronger infrastructure, undergrounding 307 miles in high fire-risk areas, and replacing 164 miles of gas distribution pipeline.

PG&E also identifies potential additional customer savings beyond the proposal itself, including benefits from a $15 billion Department of Energy loan guarantee (potentially saving customers $1 billion), improved credit ratings to lower borrowing costs, and increased energy demand spreading fixed costs across more usage. This represents a comprehensive approach to maintaining rate stability while funding necessary system improvements.

General Rate Case Proposes Smallest Percentage Increase in a Decade

Residential Combined Bills Forecast to Be Lower in 2026, Flat in 2027 Compared to Today

OAKLAND, Calif., May 15, 2025 /PRNewswire/ -- Today, Pacific Gas and Electric Company (PG&E) proposed energy system improvements to drive California's economic growth and increase climate change resilience. The company submitted this proposal, its 2027-2030 General Rate Case (GRC), to California regulators.

PG&E and the state's other investor-owned utilities are required to make multi-year cost proposals every four years. PG&E's application outlines a strategy to deliver customer bill stability while improving safety.

PG&E is requesting its smallest GRC percentage increase in a decade, made possible in part by reducing costs and passing on savings to customers. Over the past three years, the company has implemented new processes and technologies, reducing operating and capital costs by about $2.5 billion.

Based on current information, if the proposal is approved in full, PG&E expects total residential combined gas and electric bills in 2027 to be flat compared to 2025 bills. Additionally, if electric demand increases—as the California Energy Commission forecasts—bills could go down because the costs of operating the system would be shared by more customers.

PG&E also forecasts no further electric rate increases in 2025, and projects that residential electric rates and average combined bills will be lower in 2026. That's because cost recovery currently in rates will expire and be removed from rates, helping to offset proposed increases including the 2027 GRC.

"At PG&E, we want what you want—safe, reliable, clean and affordable energy for all. We are on a journey to transform PG&E and improve how we serve our customers at a lower cost," said PG&E Corporation CEO Patti Poppe.

Stabilizing Bills Through 2030

If fully approved, total residential combined-use bills are expected to be flat in 2027 compared to current bills.

Although PG&E's GRC proposal, in isolation, would increase bills by a maximum of 3.6% in 2027, total bills are expected to be flat. This is because other costs will come out of bills in 2026, including those related to the 2023 GRC, wildfire mitigation and storm recovery.

PG&E's goal is to stabilize bills through 2030. Factors that could deliver additional customer savings, beyond the GRC proposal, include PG&E's $15 billion Department of Energy loan guarantee that could save customers $1 billion over the life of the loan, achieving a better credit rating which would lower future borrowing costs, and energy demand growth from electric vehicles and data centers.

Bills for individual customers may vary based on where they live, energy used, rate plan, discount programs and other factors.

Improving Service for Customers

Among the ways PG&E's proposal would increase safety and reliability for customers:

• Deliver a more modern grid to meet expected historic growth in electricity demand from new homes, businesses, electric vehicles and AI-focused data centers. This includes preparing the grid to serve 3 million EVs by 2030 and ramping up to 20,000 new customer connections per year by 2030.
• Improve wildfire safety through proven layers of wildfire protection. This includes replacing 760 miles of powerlines with stronger poles and covered powerlines; placing 307 miles of powerlines underground in the highest fire-risk areas in 2027, reducing risk on those lines by 98%; installing an additional 114 weather stations for better forecasting and situational awareness; and improving tree trimming by bundling work to reduce costs and minimize impacts for customers.
• Increase clean energy delivery and system resilience to extreme weather impacts. This includes investing in lower-cost solar and battery energy storage to diversify and complement the grid's existing power plant fleet and protect customers from fuel cost volatility; installing more microgrids in remote areas to reduce wildfire risk and lower costs by removing powerlines and decreasing the need for maintenance; accelerating EV adoption to increase vehicle-to-grid capabilities so EVs can serve as mobile batteries during peak summer energy demand periods; and modernizing existing clean hydroelectric plants to improve safety and reliability, including spillway improvements.
• Strengthen the gas system to keep customers and communities safe and improve air quality. This includes replacing 164 miles of distribution pipeline and upgrading internal pipeline inspections processes to continue safe operations and extend the lifespan of pipelines; responding to more than 600,000 calls to locate and mark lines to reduce the likelihood of third-party pipeline dig-ins; and using advanced mobile leak detection technology to quickly find and fix gas leaks for safety and to reduce methane emissions.

About the GRC Process

The regulatory process allows for input from a variety of stakeholders and the public before the California Public Utilities Commission issues a final decision. Customer rates are not expected to change related to this proposal until January 2027 at the earliest.

Cautionary Statement Concerning Forward-looking Statements 

This news release contains forward-looking statements that are not historical facts, including statements about PG&E's beliefs, expectations, estimates, future plans, and strategies, including regarding customer bills, wildfire mitigation, and grid modernization. These statements are based on current expectations and assumptions, which management believes are reasonable, and on information currently available to management, but are necessarily subject to various risks and uncertainties. In addition to the risk that these assumptions prove to be inaccurate, factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include factors disclosed in PG&E Corporation's and PG&E's joint Annual Report on Form 10-K for the year ended December 31, 2024, their most recent Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, and other reports filed with the Securities and Exchange Commission (SEC), which are available on PG&E Corporation's website at www.pgecorp.com and on the SEC's website at www.sec.gov. PG&E Corporation and PG&E undertake no obligation to publicly update or revise any forward-looking statements, whether due to new information, future events or otherwise, except to the extent required by law.

About PG&E
Pacific Gas and Electric Company, a subsidiary of PG&E Corporation (NYSE: PCG), is a combined natural gas and electric utility serving more than sixteen million people across 70,000 square miles in Northern and Central California. For more information, visit pge.com and pge.com/news  

 

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SOURCE Pacific Gas and Electric Company

FAQ

What is PG&E's (PCG) proposed rate increase for 2027-2030?

PG&E's GRC proposal includes a maximum 3.6% increase in 2027, though total bills are expected to remain flat due to offsetting cost reductions.

How much has PG&E reduced its operating costs in recent years?

PG&E has reduced operating and capital costs by approximately $2.5 billion over the past three years through new processes and technologies.

What infrastructure improvements is PG&E planning for 2027-2030?

PG&E plans to replace 760 miles of powerlines, place 307 miles underground in high-fire-risk areas, install 114 weather stations, and replace 164 miles of gas distribution pipeline.

How will PG&E's DOE loan guarantee affect customer bills?

The $15 billion Department of Energy loan guarantee could save customers approximately $1 billion over the life of the loan.

What is PG&E's plan for electric vehicle infrastructure by 2030?

PG&E is preparing its grid to serve 3 million EVs by 2030 and ramping up to 20,000 new customer connections per year.