About Residential Rate Reform

What Is Changing and Why?

On July 3, 2015, the California Public Utilities Commission approved a plan that will change existing residential electric rates for customers of investor-owned utilities in California, including Pacific Gas and Electric Company, Southern California Edison and San Diego Gas & Electric Company. The rate reform proceeding was mandated in 2013 by state law AB327.

The CPUC’s decision will change the way most Californians are billed for electricity. This rate reform plan will not increase PG&E's revenues or profits.

These changes are happening because current rate structures were established during the energy crisis in 2001, when energy was in limited supply, electricity prices were at record highs and issues with electric reliability were frequent occurrences. In addition, renewable energy wasn’t widely accessible and meters were read manually. Since then, things have changed. Progress has been made in nearly every sector of energy.

Expected PG&E rate changes will include:
  • The existing four-tier rate structure will be reduced to two tiers

  • The price difference between the existing tiers will be reduced

  • A "minimum bill," not to exceed $10 will be implemented
  • Additional time-of-use rates will be available
  • In 2017, a "super-user electric surcharge" will be adopted

PG&E's goal is to make rates simple and easy to understand. As these changes take effect, we will be sure to explain the impact on your monthly energy statement and provide you with information that can help you save energy and money.
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We're here to help you save energy and money through programs such as CARE, Energy Savings Assistance Program, energy management tips and audit tools, energy efficiency programs and rebates, and payment options including Balanced Payment Plan.
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How Will the Funds Be Invested?

These rate changes will not increase PG&E's overall revenues or profits. PG&E's average bills will remain among the lowest in the country.
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Where Does My Energy Dollar Go?

PG&E invests the money it receives from residential customers like you to improve safety, reduce outages and provide cleaner energy. This chart illustrates some of the major costs:

Average Standard Rate for Electricity

Energy Supply (56%): The cost of generating and purchasing power for PG&E customers. More than 50 percent of our electricity comes from sources that are free of greenhouse gas emissions, giving us some of the cleanest energy supplies in the nation.

Transmission & Distribution (32%): Operating and maintaining the grid to deliver safe, reliable service. Includes new Smart Grid technology to reduce outages and more quickly restore service to customers.

Public Purpose Programs (7%): Promoting the public good, including discounts for income-qualified customers, investments in energy efficiency programs, and the California Solar Initiative.

Other (5%): Legacy costs for nuclear plant decommissioning, electric generation deregulation, and the impact of the 2001-2002 California energy crisis.

Minimum Delivery Charge Adjustment 

On July 3, 2015, the California Public Utilities Commission (CPUC) approved an increase to the "Minimum Delivery Charge" from approximately $4.50 to $10 (for CARE customers it has been increased from approximately $3.60 to $5.00). Prior to this decision, the residential Minimum Delivery Charge had not been increased for over 10 years. This charge applies to all residential customers and supports the ongoing maintenance of the energy grid. For renewable energy customers, this charge is applied each month but can be credited back at the end-of-year True-up.

For further information on Minimum Delivery Charge, please see the Frequently Asked Questions below.

Frequently Asked Questions

Do only renewable energy customers pay the Minimum Delivery Charge?
All PG&E customers are subject to pay the Minimum Delivery Charge, including customers with on-site renewable power such as rooftop solar. This charge is applied in a given billing period if the electricity used does not exceed the minimum amount. See below for how this is applied to renewable customers.

Why do renewable energy customers have to pay a Minimum Delivery Charge?
A portion of customers' Electric Charges pays for infrastructure upgrades to provide safe and reliable transmission and distribution of energy at all times of the day. In addition to safely delivering energy to our customers, reliable transmission and distribution is required to put energy generated by renewable customers back on the grid. Such costs do not vary depending on the amount of energy a customer uses or produces.

Is the Minimum Delivery Charge applied to a customer's bill every month?
The minimum charge is assessed monthly only if the premise electricity used does not exceed the minimum amount. When this happens, the minimum amount is charged in lieu of any electricity charges. Renewable energy customers are assessed the Minimum Delivery Charge every month of the year. When the net annual True-up is calculated the customer may be refunded for all or part of the minimum charges paid, depending on how much energy is actually used.

Will this Minimum Delivery Charge be refunded at my end-of-year True-up?
The Minimum Delivery Charge is refunded to renewable energy customers whose balance due at the time of their annual True-up is greater than their cumulative Minimum Delivery Charges. The refund will be shown as a subtraction of the cumulative Minimum Delivery Charge from the balance due on the annual True-up statement.

How will the new minimum amount impact me?
The increased minimum charge will not increase the annual amount paid by most of our renewable customers. Instead, the customer will pay a little more each month and pay less at the annual True-up. Customers who generate more than they consume, or have a True-up balance less than the $120, will pay up to $66 more annually – the difference between the old minimum and new minimum.

Comparison of Two True-up Balances: $500 True-up/$4.50 Minimum-54 Minimum, 446 True-up; $500 True-up/$10 Minimum-120 Minimum, 380 True-up; $100 True-up/$4.50 Minimum-54 Minimum, 46 True-up; $100 True-up/$10 Minimum-120 Minimum, 0 True-up

When the True-up amount owed is greater than $120 there is no change in the yearly amount paid, the True-up is simple reduced. In the example of a $100 True-up, the customer pays an additional $20 with the increased minimum delivery charge.

Customers Who Generate Excess Power: $4.50 Minimum-54 Minimum; $10 Minimum-120 Minimum

In an over generation scenario, no True-up is owed, only the monthly minimum is paid. In this case the total annual increase is around $66.

Doesn't the Minimum Delivery Charge discourage residential solar installation?
Part of the Minimum Delivery Charge is to help make solar more sustainable in California. PG&E has a strong track record demonstrating its leadership and commitment to solar, including:

  • Interconnecting more solar rooftops (200,000 to date) than any other utility in America, in fact, 25% of all rooftop solar in America is in PG&E territory.
  • For the safety of our customers, PG&E is always available, providing grid energy even when the sun doesn't shine.
  • A faster interconnection process to connect the customer to the grid that takes just one to five days, compared to an industry average of four weeks.
  • A full time Solar Customer Service Center to address solar customers' unique needs.
  • Making solar available to low income communities through our 10-year partnerships with GRID Alternatives and Habitat for Humanity.

If you have any questions, please call our solar customer service center at 1-877-743-4112, from 8 a.m. to 5 p.m., Monday through Friday. You can also find out more information at pge.com/solar.

For all other inquiries, customers can call our 24-hour customer service helpline at 1-800-743-5000.

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