Electrical corporations: financial performance-based incentives and performance-based metrics.
Impact
If enacted, SB 947 would amend the Public Utilities Code to mandate that the CPUC conducts evaluations of financial performance metrics for electrical corporations. The first report on this evaluation must be delivered by January 1, 2022, to relevant legislative committees. This report would encompass considerations such as the feasibility of transitioning to performance-based regulations, necessary actions for implementation, and directives for utility corporations. Additionally, it may include recommendations for modifying existing statutes that could obstruct the enhancement of performance metrics.
Summary
Senate Bill 947, introduced by Senator Dodd, aims to enhance the regulation of electrical corporations in California by introducing financial performance-based incentives and performance-based metrics. The bill would require the California Public Utilities Commission (CPUC) to evaluate and implement mechanisms that align electrical corporation operations and expenditures with the state's public benefit goals, such as safety, reliability, and cost efficiency. The intended outcome of this legislation is to foster a regulatory environment that supports better performance metrics and fiscal accountability among electrical utilities.
Contention
A significant point of contention surrounding SB 947 involves the potential impacts on the current regulatory frameworks that govern electrical utilities. Proponents argue that aligning utility performance with public safety and cost efficiency is crucial, especially in light of recent wildfire events attributed to utility mismanagement. Conversely, critics may raise concerns about the adequacy of oversight and its implications for consumer protection, fearing that performance-based incentives without proper checks could lead to cost-cutting measures that compromise service reliability and safety.