About Energy Rates: What’s Ahead and How to Lower Your Energy Costs

California regulations require large natural gas and electric utilities to update their rates at the beginning of each year.

PG&E wants customers to know how and why rates will change.

Combined residential customer bills remain flat this January compared with last year

Most residential customers who do not receive discounts will pay about 4% less, or $11 less, for electricity this January 2025 than they did in January 2024, as long as their electric use stays about the same.

This electric decrease largely offsets gas increases that have occurred since January 2024. Customers who receive both electricity and gas service will see combined bills remaining about the same compared to last January, increasing by about $1 per month, based on average residential bills available in PG&E’s rate advisories.

Based on current information, electric rates are expected to be more stable in 2025 compared to 2024, with fewer and smaller changes during the year.

All rates are temporary, which means they can change during the year as some costs leave bills and others are added. This is because costs will end for some wildfire safety work and storm response and will no longer be included in customers’ bills. Other pending rate increases, if approved by the California Public Utilities Commission (CPUC), could offset a portion of these decreases.

A  recently published report by the California Public Advocates Office shows PG&E’s average electric rates are projected to drop more in 2026. 

Jan. 1 rate changes

The January rate change is called an annual “true-up.” It consolidates rate changes approved by regulators and allows PG&E to return money to customers or charge customers to account for the difference between forecasted and actual costs of providing gas and electric service.

For typical residential customers who don’t receive discounts, electric rates will remain flat in January 2025, compared to rates in effect in December 2024. Residential customers who receive discounts will see their electric rates decrease by 5.5% as a result of Assembly Bill 205 (PDF), which increased the average California Alternate Rates for Energy (CARE) discount from 35% to 38.5%.

For the typical non-CARE residential customer who uses 500 kilowatt hours (kWh) of electricity per month and receives energy supply and delivery from PG&E, monthly electric bills will decrease by about $1 per month, compared to rates in effect in December.

For the typical CARE residential customer, monthly bills will decrease by $8.50.

Average residential gas rates will go up by 8.6% in January to pay for new investments in safety and reliability. This work includes replacing, inspecting and strength-testing pipelines, and using advanced leak detection technology to quickly find and fix gas leaks to improve safety and reduce methane emissions.

Gas rates, like electric, also include energy supply costs. The natural gas supply costs this winter are lower compared to last winter.

A typical residential customer using 31 therms who gets both energy supply and delivery from PG&E will see monthly gas bills increase by $9 per month, compared to rates in effect in December. For customers receiving discounts, the monthly bill increase will be about $7.

Taking action to reduce customer costs

PG&E is taking many actions to slow future increases and stabilize bills through 2026.

These include reducing operating and capital costs such as materials and labor, and more efficiently planning, executing and automating work.

Customers also could see lower electric bills in the next six to 12 months if the CPUC approves PG&E’s request to issue bonds to spread some vegetation management costs over a longer period. This could lower bills by $16 per month.

PG&E also is reducing financing costs. The company applied for grants and low-interest loans from the U.S. Department of Energy (DOE), which could save customers hundreds of millions of dollars in interest.

The DOE recently gave PG&E a conditional commitment for a $15 billion loan guarantee to pay for work to modernize the electric grid. PG&E estimates this would save customers up to $1 billion net present value over the life of the financing.

How customers can lower energy use and money

Some simple steps can help customers reduce their energy use and limit monthly bills:

Set thermostat and water heater for savings. For every degree you lower your thermostat during the winter, you can save 1% annually on your bill. You can save up to 10% by turning down your thermostat 7-10 degrees for eight hours, health permitting.

Improve home energy efficiency. PG&E offers energy efficiency programs and services to help customers save. The Home Energy Checkup estimates what uses energy in the home and suggests improvements. The HomeIntel program is a free service that provides in-depth analysis of energy use and pairs you with an energy coach who offers recommendations to reduce use.

Enroll in Budget Billing. This program uses participating customers’ energy-use history to balance energy bills across the year for predictable monthly payments. PG&E recalculates customers’ energy usage every month based on their average energy costs over 12 months to avoid seasonal spikes in bills.

Find your best rate. Personalized Rate Comparison supports customers by providing the best rate plan options for their household, which can help save money on energy bills. PG&E also offers rebates and incentives, as well as other energy-saving tips, to help customers conserve.

Customers should also check if they qualify for bill assistance, including:

• California Alternate Rates for Energy (CARE), which provides a monthly discount of 20% or more on gas and electricity.
• Family Electric Rate Assistance (FERA), which provides a monthly discount of 18% on electricity for households of three or more people.
• Energy Savings Assistance (ESA), a program that provides energy-savings improvements at no charge.
• Relief for Energy Assistance through Community Help (REACH), to provide up to $300 in assistance per household for past-due bills. Program re-opens Jan. 2, 2025.
• Low Income Energy Assistance Program (LIHEAP), a federally funded assistance program overseen by the state that offers a one-time payment up to $1,000 on past due bills to help low-income households pay for heating or cooling in their homes.
• Arrearage Management Plan (AMP), a debt forgiveness plan for eligible residential customers.
• Other programs include Medical Baseline, which offers a lower monthly rate for customers with certain medical conditions.

PG&E will keep customers informed about rate changes and other factors that affect the cost of energy service. PG&E looks forward to working with its regulators, customer advocates and other stakeholders to deliver customers service at the lowest possible cost.