Company: PCG-PB
Filing Date: 2025-04-24
Form Type: 10-Q
Source: 0001004980-25-000087
Chunk: 31

Company: PG&E Corp
Filing Date: 2025-04-24
Form: 10-Q
Item: Part II, Item 7
Chunk 31
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 periodically involved in “cost of capital” proceedings to adjust its regulated return on rate base.  The Utility’s future earnings will depend on the revenue requirements authorized in such rate cases.  The Utility also expects to file its SB 884 cost application with the CPUC after the OEIS approves guidelines.  See “SB 884 10-Year Distribution Undergrounding Program” below.

Decisions in GRC proceedings have historically been expected prior to the commencement of the period to which the rates would apply.  In recent decades, decisions in GRC proceedings have been delayed.  Delayed decisions may cause the Utility to develop its budgets based on possible outcomes, rather than authorized amounts.  When decisions are delayed, the CPUC typically provides rate relief to the Utility effective as of the commencement of the rate case period (not effective as of the date of the delayed decision).  Nonetheless, the Utility’s spending during the period of the delay may exceed the authorized amount, without an ability for the Utility to seek cost recovery of such excess.  If the Utility’s spending during the period of the delay is less than the authorized amount, the Utility could be exposed to operational and financial risks associated with the lower level of work achieved compared to that funded by the CPUC.

The Utility’s forward-looking rate cases that are pending, have pending appeals, or were completed during the quarter ended March 31, 2025 are summarized in the following table:

Rate CaseRequestStatus2026 Cost of CapitalIncrease ROE to 11.30% and cost of debt to 5.05%Filed March 2025.Transmission Owner Rate Case for 2024Revenue requirement of $2.78 billion for 2024Accepted December 2023, except as to CAISO adder.  Appeal of FERC’s order regarding CAISO adder filed June 2024 and remains pending.  All other issues settled March 2025.

Cost of Capital Proceedings

2026 Cost of Capital Application

On March 20, 2025, the Utility (along with the other investor-owned utilities in California) submitted its 2026 Cost of Capital application.  These applications set the cost of capital, ROE, cost of preferred stock, and cost of debt for the Utility’s electric generation, electric distribution, natural gas distribution, and natural gas transmission and storage rate base beginning on January 1, 2026.

In the application, the Utility requests the following cost of capital rates:

CostWeightWeighted CostReturn on Common Equity11.