The California Public Utilities Commission (CPUC) has outlined the process it follows to review General Rate Cases (GRCs), which are major proceedings that determine the rates customers pay for essential services such as electricity and natural gas. GRCs are conducted every four years for large investor-owned utilities, including Pacific Gas and Electric Company, Southern California Edison, and San Diego Gas & Electric.
Each GRC is divided into two phases. The first phase establishes the total revenue requirement a utility needs to operate and maintain its infrastructure and provide services. The second phase allocates this approved amount among different customer groups, such as residential, commercial, and industrial users.
Leuwam Tesfai, Deputy Executive Director for Energy and Climate Policy at the CPUC, explained that Phase 1 of GRCs involves a comprehensive evaluation of utility costs to ensure transparency in the process. “GRCs are comprehensive and highly technical. They involve forecasts of nearly every aspect of a utility’s operations ranging from infrastructure and safety investments to customer service and cybersecurity. The CPUC assigns a multidisciplinary team of more than 30 staff, including engineers, financial analysts, policy experts, attorneys, and Administrative Law Judges (ALJs), to evaluate each utility GRC application. The goal is to ensure that utilities justify the costs necessary to provide safe, reliable utility service,” Tesfai said.
A typical GRC can generate thousands of pages of documentation. Utilities submit detailed applications with historical data and future spending forecasts covering areas like infrastructure upgrades, wildfire mitigation efforts, customer service operations, IT systems security measures, employee training programs, insurance costs, legal fees, and regulatory compliance.
Developing these forecasts requires significant preparation by utilities well before filing their applications. After submission, there are several opportunities for public involvement through forums held across the utility’s service area as well as written comments submitted online.
Intervenors—including consumer advocates, local governments, and environmental organizations—play an important role by submitting expert testimony that analyzes or challenges a utility’s forecasts. In larger cases there may be more than 20 intervenors contributing technical analysis.
Public input is gathered through virtual or in-person forums led by CPUC Commissioners and ALJs with support from the Public Advisor’s Office. These sessions allow customers to share their perspectives directly with decision-makers.
Formal evidentiary hearings are also part of the process; during these hearings parties cross-examine witnesses from both utilities and intervenor groups. Testimony collected becomes part of the official record reviewed when making final decisions.
The CPUC’s internal review draws on expertise from multiple divisions:
– Staff assess proposed revenue requirements using financial models.
– Distribution planning teams evaluate proposals related to grid modernization.
– Safety analysts focus on wildfire mitigation strategies.
– Affordability specialists examine potential impacts on customer bills.
Throughout an 18-month period—from initial filing through final decision—CPUC staff conduct technical analyses; review all testimony; participate in hearings; help draft proposed decisions; and support adoption at voting meetings.
Tesfai emphasized: “At its core, a GRC is about evidence and accountability. Utilities are granted the opportunity to collect revenue based on the reasonable cost of providing service. The CPUC ensures that these requests are thoroughly reviewed, justified, and in the public interest… Every GRC decision represents months of rigorous technical analysis and stakeholder input.”
This process reflects CPUC’s commitment to maintaining safe and reliable utility services at fair rates for Californians.
