On December 18, the CPUC will convene for its final business meeting of the year. The agenda is jam-packed with consequential items, spanning wildfire accountability, capital-structure discipline, long-term gas planning, procurement volatility, and the sunset of underperforming clean-energy programs.
Several items crystallize regulatory themes that have taken shape over the past 12 months: greater cost-effectiveness scrutiny, more prescriptive planning frameworks, and a willingness to retire legacy programs that no longer justify ratepayer funding.
Below is an item-by-item preview of what’s on deck. More coverage is available here.
COST of CAPITAL
A proposed decision establishes the 2026 cost of capital for PG&E, SoCalGas, SCE, and SDG&E by maintaining each investor-owned utility’s existing capital structure and authorizing ROEs between 9.73% and 9.98%. The PD rejects efforts by utilities to raise equity layers or boost ROEs based on wildfire exposure, cash-flow pressures, or Empirical Capital Asset Pricing Model/After-Tax Weighted Average Cost of Capital adders, finding the evidentiary support insufficient. Intervenor arguments regarding high equity ratios, statutory protections, and national comparables carry more weight, leading the PD to conclude that current structures adequately support credit quality while limiting ratepayer burdens.
LONG-TERM NATURAL GAS PLANNING
A proposed decision in the Long-Term Gas Planning docket implements Senate Bill 1221 by designating initial neighborhood decarbonization zones—areas where gas utilities may pilot cost-effective electrification tied to upcoming gas line replacement work. Using criteria centered on community support, foreseeable pipeline replacement needs, and environmental-justice considerations, the PD identifies 142 census-tract-level zones and requires utilities to update their maps within 15 days. The PD also directs PG&E, SoCalGas, and SDG&E to conduct structured outreach and host public sessions ahead of a March 15, 2026 refinement process.
NATURAL GAS ADVANCED METERING INFRASTRUCTURE
A proposed decision approves a settlement between PG&E, Cal Advocates, TURN, and the Small Business Utility Advocates that resolves PG&E’s request to recover costs for its large-scale replacement of failing Gas Advanced Metering Infrastructure modules. The settlement trims PG&E’s Gas AMI replacement program to a more defensible scope, cutting the utility’s original ask down to $88.6 million, while locking PG&E into a $420 million capital cap and denying any return on $9.8 million of prematurely failed modules.
WOOLSEY FIRE
A proposed decision approves a major settlement reducing SCE’s requested recovery for the 2018 Woolsey Fire, allowing only 35% of its $5.6 billion Wildfire Event Mitigation Account balance and 85% of its Catastrophic Event Memorandum Account costs. This leaves $3.7 billion in wildfire-related claims and legal expenses permanently disallowed, with the approved WEMA portion to be financed through securitization and CEMA recovery handled through standard ratemaking. The settlement also resolves trailing claims issues, applies a $250 million Administrative Consent Order waiver, and includes SCE’s agreement not to pursue $157 million tied to other pre-2019 fires.
SDG&E's WILDFIRE MITIGATION COSTS
A proposed decision addresses SDG&E’s request to recover wildfire-mitigation costs recorded in its Wildfire Mitigation Plan Memorandum Accounts from May 2019 through 2022. SDG&E sought approval to recover more than $1.47 billion in wildfire-mitigation spending from 2019–2022, but the PD disallows $192.6 million in O&M and $242.4 million in capital due to insufficient justification and cost-effectiveness concerns.
UTILITY FINANCES
A proposed decision authorizes SoCalGas to issue up to $3.3 billion in new long-term debt to fund capital investments, reimburse prior expenditures, and maintain financial flexibility.
ERRA PROPOSED DECISIONS for PG&E and SCE
Respective proposed decisions for the 2026 Energy Resource Recovery Account Forecast filings of PG&E and SCE approve the utilities' forecasts: SCE’s $4.689 billion revenue requirement and PG&E’s $4.511 billion gross requirement.
PG&E TRANSMISSION COSTS
A proposed decision authorizes PG&E to recover $338.2 million in recorded costs from its Transmission Revenue Requirement Reclassification Memorandum Account, reflecting reclassified plant costs and two facilities shifted from CAISO to non-CAISO control.
DISTRIBUTION PLANNING
Draft Resolution E-5413 approves with modifications a joint proposal submitted by PG&E, SCE, and SDG&E to create a "pending loads" category in the utilities' distribution planning process. The proposal establishes a uniform statewide framework with four categories (A, B1, B2, and C) that classify pending loads by data quality and confidence, and introduces “hot spots” where certain projections may exceed Integrated Energy Policy Report (IEPR) forecasts to justify proactive upgrades. Utilities must adopt common criteria beginning in the 2025–2026 cycle and provide detailed annual reporting on pending loads, hot-spot designations, and planning accuracy.
Separately, Draft Resolution E-5414 implements a standardized scenario-planning framework for PG&E, SCE, and SDG&E beginning in the 2025–2026 cycle, requiring each utility to model Low, Base, and High load futures using IEPR forecasts and pending-load categories. Utilities must then translate these scenarios into a single investment plan using a common, CPUC-directed decision-logic structure that dictates when to advance, defer, or resize projects based on scenario-driven needs. All planned projects must be tied to a scenario and justified in the Distribution Upgrade Project Report, with associated grid-needs reporting in the Grid Needs Assessment.
AFFORDABILITY
A proposed decision updates the CPUC’s Affordability Framework by narrowing where affordability metrics must be filed, strengthening contextual requirements, and moving toward a more streamlined, web-based reporting system.
CLEAN-ENERGY FINANCING
A proposed decision approves with modifications SCE’s Tariff On-Bill financing pilot, while rejecting proposals from SDG&E, SoCalGas, and Silicon Valley Clean Energy.
SELF-GENERATION INCENTIVE PROGRAM
Draft Resolution E-5430 updates the Self-Generation Incentive Program by approving new third-party-ownership consumer protections and revising how federal tax credits interact with SGIP incentives.
BIOENERGY MARKET ADJUSTING TARIFF
A proposed decision denies a petition for modification filed by the Bioenergy Association of California to modify a 2020 CPUC decision (D.20-08-043), which had extended the Bioenergy Market Adjusting Tariff program through December 31, 2025.
RENEWABLES PORTFOLIO STANDARD
A proposed decision adopts, with select modifications, the 2025 Renewables Portfolio Standard Procurement Plans submitted by California’s retail sellers, finding that nearly all entities remain on track to meet long-term contracting requirements.
UNION ISLAND PIPELINE
A proposed decision denies a request of California Resources Production Corporation for a Certificate of Public Convenience and Necessity to operate the 35-mile Union Island natural gas pipeline as a public utility gas corporation. The PD concludes that the company no longer holds valid franchise rights in Antioch and Brentwood and ceased transporting gas in 2023.
