| 1 | | - | Amended IN Senate April 07, 2025 CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Senate Bill No. 332Introduced by Senator WahabFebruary 12, 2025 An act to add Chapter 3.5 (commencing with Section 25250) to Division 15 of the Public Resources Code, and to amend Sections 748.5, 3289, 3292, and 8388.5 3289 and 3292 of, to add Sections 706.5, 748.3, 8386.7, 748.7, 8386.8, and 8388.6 to, to add Article 4.5 (commencing with Section 570) to Chapter 3 of Part 1 of Division 1 of, and to add Chapter 10 (commencing with Section 8450) to Division 4.1 of, the Public Utilities Code, relating to energy.LEGISLATIVE COUNSEL'S DIGESTSB 332, as amended, Wahab. Investor-Owned Utilities Accountability Act.(1) Existing law vests the State Energy Resources Conservation and Development Commission (Energy Commission) with various responsibilities for developing and implementing the states energy policies.This bill would require the Energy Commission, in coordination with the public advisor and the Public Utilities Commission (PUC), on or before March 31, 2026, to issue a request for proposals for a team to develop a study. The bill would require the study to (1) conduct a historical energy justice assessment of the investor-owned utilitys (IOU) operations and impacts, (2) complete a comparative analysis of the benefits and challenges of transitioning the IOUs to a successor entity in order to identify a recommended model, and, (3) if the study finds that it is in the best long-term interests of the people and ecologies of California to transition away from an investor-owned utility model, create a justice-centered implementation plan for managing the transition. The bill would require the Energy Commission, on or before June 30, 2026, to select the study team that is awarded the contract. The bill would require the Energy Commission to hold a public proceeding and submit a report of the study teams findings and recommendations to the Legislature no later than 24 months after selecting the study team for the feasibility portion of the study, and no later than 36 months after selecting the study team for the implementation plan portion of the study, as specified.This bill would require the Energy Commission to require the study team to select and convene an advisory council by December 31, 2026, to participate in the study of the vision for a new energy system, as provided. Upon completion of the first 2 study components, the bill would require the study team, in consultation with the advisory council, to provide a recommendation for a particular successor entity type to the Energy Commission, as provided. The bill would require the Energy Commission to vote to approve the study and recommended successor entity on or before September 30, 2028. Upon approval by the Energy Commission, the bill would require the study team to begin work to create a justice-centered implementation plan. The bill would require the Energy Commission to vote to approve the implementation plan no later than October 31, 2029.(2) Existing law vests the PUC with regulatory authority over public utilities, including electrical corporations and gas corporations, while local publicly owned utilities are under the direction of their governing boards. Existing law prohibits an electrical corporation, gas corporation, or water corporation from terminating a customers residential service for nonpayment of a delinquent account in certain circumstances, including, among other circumstances, unless the corporation first gives notice to the customer of the delinquency and impending termination, during the pendency of an investigation by the corporation of the customers dispute or complaint, or when the customer has been granted an extension of the period for payment of a bill.This bill would, among other things, prohibit a utility, including an electrical corporation, local publicly owned electric utility, gas corporation, and local publicly owned gas utility, from disconnecting a customers residential service for nonpayment if the customer has a household income at or below 200% of the federal poverty line. The bill would prohibit a utility from disconnecting a customers residential service for nonpayment if the customers household is the residence of certain persons, including, among other persons, a person who is pregnant or 0 to 12 weeks postpartum. The bill would require the commission to establish a citation program to impose a penalty on an electrical corporation or gas corporation that violates the above-described prohibitions. The bill would also authorize the commission, a customer, or a member of the customers household to bring an action in state court for equitable relief regarding a utilitys or community choice aggregators use of any method, act, or practice inconsistent with the above-described provisions.This bill would require a utility to offer a residential customer who meets the above-described requirements a payment plan for the customers electrical and gas service that includes a percentage of income payment plan, as specified. The bill would require each utility providing electrical service or gas service, or both, to residential customers to collect and submit to the commission monthly data on electrical and gas service terminations, reconnections, bill assistance and payment agreements, arrears, and created and broken payment plans, as provided.(3) Existing law prohibits an electrical corporation from recovering from ratepayers an annual salary, bonus, benefit, or other consideration of any value paid to an officer of the electrical corporation, and requires that compensation to instead be funded solely by shareholders of the electrical corporation.This bill would require each electrical corporation, on or before April 1, 2026, to submit a proposed executive compensation structure to the PUC that is structured to promote safety as a priority and to ensure public safety through performance metrics, as provided.(4) Existing law authorizes the PUC to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable.This bill would prohibit, for proposed rate increases subject to PUC approval and a finding that the new rate is just and reasonable, an electrical corporation from proposing a compounded annual rate increase on residential customers above the increase in the Consumer Price Index. The bill would prohibit, for proposed rate increases not subject to PUC approval and a finding that the new rate is just and reasonable, an electrical corporation from proposing more than one rate increase per year, as provided.(5)The California Global Warming Solutions Act of 2006 establishes the State Air Resources Board as the state agency responsible for monitoring and regulating sources emitting greenhouse gases. The act requires the state board to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the statewide greenhouse gas emissions limit, as defined, no later than December 31, 2030. The act requires the state board to adopt rules and regulations in an open public process to achieve the maximum technologically feasible and cost-effective greenhouse gas emission reductions. The state board is authorized to include market-based compliance mechanisms to comply with the regulations. The implementing regulations adopted by the state board provide for the direct allocation of greenhouse gas allowances to electrical corporations pursuant to a market-based compliance mechanism.Existing law authorizes the PUC to allocate 15% of the revenues received by the electrical corporations from that allocation of allowances for clean energy and energy efficiency projects established pursuant to statute that are administered by electrical corporations. Existing law requires the PUC to direct the balance of the revenues to be credited directly to the residential, small business, and emissions-intensive trade-exposed retail customers of the electrical corporations, as specified.Beginning with the fiscal year commencing July 1, 2026, and ending with the fiscal year ending June 30, 2036, this bill would require the PUC to annually allocate $100,000,000 of the revenues received by the electrical corporations from that allocation of greenhouse gas allowances to the Transformative Climate Communities Program and to the Community Resilience Center Program, as specified. The bill would require those allocations for the Transformative Climate Communities Program and Community Resilience Center Program to benefit disadvantaged communities in census tracts that are the most vulnerable to climate disaster, as specified.(6)(5) Existing law establishes the Wildfire Fund to pay eligible claims arising from a covered wildfire, as provided. Existing law requires the PUC to initiate a rulemaking proceeding to consider using its existing authority to require certain electrical corporations to collect a nonbypassable charge from its ratepayers to support the Wildfire Fund, and requires the PUC to direct those electrical corporations to collect that charge if the PUC determines that the imposition of the charge is just and reasonable and that it is an appropriate exercise of its authority, as specified.This bill would require the PUC to revise the above-described rulemaking proceeding to reduce the charge imposed on ratepayers to an amount equal to 5% of the costs to support the fund, and require each electrical corporation to contribute the remaining 95% of the costs to support the fund.Existing law establishes procedures under which electrical corporations are required to reimburse the Wildfire Fund for amounts disallowed by the PUC for recovery from ratepayers. Existing law requires an electrical corporation to reimburse the fund for the full amount of costs and expenses the PUC determined were disallowed, except as provided. Under existing law those exceptions do not apply if the administrator determines that the electrical corporations actions or inactions that resulted in the covered wildfire constituted conscious or willful disregard of the rights and safety of others.This bill would provide that, for those purposes, evidence that an electrical corporations action were prudent includes common sense best practices such as conducting annual audits and replacing equipment that has outlived its usable life and deenergizing the electrical grid under threatening conditions.(7)(6) Existing law requires each electrical corporation to construct, maintain, and operate its electrical lines and equipment in a manner that will minimize the risk of catastrophic wildfire posed by those electrical lines and equipment. The California Energy Infrastructure Safety Act established the Office of Energy Infrastructure Safety within the Natural Resources Agency, and provides that, on and after July 1, 2021, the Office of Energy Infrastructure Safety is the successor to, and is vested with, all of the duties, powers, and responsibilities of the Wildfire Safety Division of the commission.This bill would require each electrical corporation to annually triennially contract with an independent and reputable third party to audit all of the electrical corporations equipment and electrical lines and identify any equipment or electrical lines that have outlived their useful life. reached their end of life. The bill would require the audit to be completed on or before June 30, 2026, and by June 30 of each year thereafter and submitted to the PUC on or before August 31, of each year. in alignment with the wildfire mitigation plan cycle, as specified. The bill would require an electrical corporation to replace any equipment or electrical lines identified by the third-party auditor that are located in a high fire risk area fire-threat district within 5 years, as provided. The bill would require the PUC to assess fines on an electrical corporation that fails to comply with these provisions, as specified. This bill would require the Office of Energy Infrastructure Safety to develop a best value procurement model for all electrical corporation infrastructure projects, as specified. The bill would require each electrical corporation, for all infrastructure projects, to demonstrate to the commission that the selected contractor is the best value contractor, as specified.(8)(7) Existing law requires the PUC to establish an expedited utility distribution infrastructure undergrounding program and provides that only large electrical corporations may participate in the program.This bill would instead require all large electrical corporations to participate in the program. The bill would also require an electrical corporation, require, after an emergency or disaster in which its an electrical corporations electrical infrastructure was destroyed, to rebuild if the electrical corporation rebuilds the destroyed electrical infrastructure using infrastructure, the electrical corporation to use the most cost-effective wildfire mitigation strategies that conform to state and industry safety standards for electrical equipment and that minimize the risk of catastrophic wildfire as quickly as possible, including consideration of undergrounding and covered conductor methods, to the extent applicable. The bill would prohibit the cost of undergrounding undergrounding, installing covered conductors, or other cost-effective wildfire mitigation strategies for the electrical infrastructure from being recovered from ratepayers.(9)(8) Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.Because certain provisions of this bill would be part of the act and a violation of a commission action implementing the bills requirements would be a crime, the bill would impose a state-mandated local program.In addition, to the extent the bill would impose new requirements on local publicly owned utilities, the bill would impose a state-mandated local program.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for specified reasons.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill TextThe people of the State of California do enact as follows:SECTION 1. This act shall be known, and may be cited, as the Investor-Owned Utilities Accountability Act.SEC. 2. The Legislature finds and declares all of the following:(a) Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), San Diego Gas and Electric Company (SDG&E), and SoCalGas, which have collectively exercised their monopoly over California ratepayers for over 100 years, have lost the trust of the people of California due to their crushingly high rates, exorbitant payouts to executives and shareholders, reckless endangerment of life and property, and excessive spending with the goal of generating profits rather than providing an essential service.(b) Rates are higher in investor-owned utility (IOU) service territories across California than in not-for-profit utilities, including municipal utilities, rural electric cooperatives, and tribal utilities, which has resulted in working class and low-income people paying higher rates. On average, California IOU electricity rates are more than 50 percent higher than rates charged by publicly owned utilities. For IOU customers in California, rates have increased nearly 50 percent over the past three years.(c) Under the current system, most distribution and transmission infrastructure is financed by IOUs and paid for by utility ratepayers. Ratepayers also pay for a rate of return for the IOUs for each project, which can average close to 10 percent. This guaranteed return on investment rate creates a significant and increasingly unsustainable burden on ratepayers as more unnecessary transmission lines are constructed. This can result in unnecessary rate hikes for consumers, as capital expenses can be overestimated and overspent to increase profits. As an example, in the 2023 General Rate Case, PG&E admitted that they overestimated the actual cost of infrastructure needed by $3 billion. Despite electricity demand remaining stable, executive compensation, infrastructure spending, and customer rates continue to increase. While utilities submit new rate increase proposals on a roughly three- to four-year cycle to the Public Utilities Commission, they can also submit annual increases and emergency supplements. The compounding effect and increased frequency of these rate increases, largely related to wildfire emergencies, have unfairly burdened California residents. Specifically, from January 2021 to October 2024, inclusive, PG&E residential rates increased by 56 percent, SCE rates increased by 48 percent, and SDG&E rates increased by 21 percent.(d) These increasing rate hikes and record profits are a function of the IOUs being unwilling to adequately serve their ratepayers through affordable utility rates. One in five households served by the states largest IOUs are in utility debt. From August 2022 to August 2024, inclusive, PG&E, SCE, and SDG&E also compensated their shareholders with $7.62 billion in dividends. During that period, the estimated cost to prevent all residential shutoffs for nonpayment was seventy-seven one hundredths of 1 percent of that compensation to shareholders.(e) The IOUs have caused some of Californias most destructive wildfires. PG&E is responsible for more than 30 wildfires since 2017 that have destroyed more than 23,000 homes and businesses and killed more than 100 people. These fires include the 2017 Tubbs Fire, the 2018 Camp Fire, the 2019 Kincade Fire, the 2020 Zogg Fire, and the 2021 Dixie Fire. SCE was found responsible for burning more than 385,000 acres, destroying thousands of structures, and causing five deaths in the 2017 Rye Fire, the 2017 Meyers Fire, the 2017 Liberty Fire, the 2017 Thomas Fire, and the 2018 Woolsey Fire. In 2007, SDG&E caused three fires, the Witch Fire, the Guejito Fire, and the Rice Fire, burning 207,000 acres, killing two people, destroying 1,141 homes. Assembly Bill 1054 (Chapter 79 of the Statutes of 2019) established a wildfire insurance fund of $21 billion, all passed onto ratepayer bills, directly and indirectly.(f) Past and present experience demonstrates that the IOUs prioritize profits over the safety and well-being of the ratepayers and residents of California, and thus, to support public necessity and public purpose, must be replaced with a well-researched and structured successor entity that focuses on the needs of ratepayers, workers, fire survivors, and community members instead of shareholders.(g) The State of California created the not-for-profit public benefit corporation, Golden State Energy, designated as a receiver for PG&Es assets, through passing Senate Bill 350 (Chapter 27 of the Statutes of 2020) for the purpose of owning, controlling, operating, or managing electrical and gas services for its ratepayers, for the benefit of all Californians if PG&E were to lose its business license in a six-step accountability process overseen by the Public Utilities Commission. At that time, PG&E was in bankruptcy due to an untenable amount of liabilities for wildfires caused by its equipment. Senate Bill 350 created a successor in name only and was never in a position to receive PG&E assets. This bill builds on Senate Bill 350 by authorizing an in-depth unbiased study by a neutral third party to assess the practical, financial, legal, regulatory, labor, and technical aspects of a smooth and just transition away from the IOU model to one that prioritizes the needs of the people and ecology of the State of California.SEC. 3. Chapter 3.5 (commencing with Section 25250) is added to Division 15 of the Public Resources Code, to read: CHAPTER 3.5. Investor-Owned Utility Transition Feasibility Study25250. For purposes of this chapter, the following definitions apply:(a) Clean energy investments, incentives, and ownership refers to the levels of private investment or public incentives in energy resources eligible under the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code), and the entities that provided the investment or incentives and own the resources.(b) Critical minerals means those minerals specified by the United States Geological Survey as essential to the economic or national security of the United States, have a supply chain that is vulnerable to disruption, and serve an essential function in the manufacturing of a product, the absence of which would have significant consequences for the economic or national security of the United States. Critical minerals do not include fuel minerals, water, ice, or snow, or common varieties of sand, gravel, stone, pumice, cinders, or clay.(c) Disadvantaged communities advisory group means the disadvantaged communities advisory group established pursuant to subdivision (g) of Section 400 of the Public Utilities Code.(d) Disadvantaged community means a community identified pursuant to Section 39711 of the Health and Safety Code.(e) Distributed energy resources means distributed renewable generation resources, energy efficiency, energy storage, electric vehicles, and demand response technologies.(f) Endangered species means a native species or subspecies of a bird, mammal, fish, amphibian, reptile, or plant that is in serious danger of becoming extinct throughout all, or a significant portion, of its range due to one or more causes, including loss of habitat, change in habitat, overexploitation, predation, competition, or disease.(g) Energy burden means the expense of energy expenditures relative to overall household income.(h) Energy justice means the goal of achieving equity in both the social and economic participation in the energy systems, while also remediating social, economic, and health burdens on those historically harmed by the energy system, including disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(i) Equity, just, and justice mean the goal of creating systems, organizations, and societies that are fair and just, recognizing where disadvantages and barriers exist, and allocating resources and support to ensure equal access and opportunity for all populations.(j) Investor-owned utilities or IOUs means all of the following:(1) Pacific Gas and Electric Company, PG&E Corporation, any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within Pacific Gas and Electric Companys service territory, and any successor to any of the foregoing.(2) Southern California Edison, SCE, any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within Southern California Edisons service territory, and any successor to any of the foregoing.(3) Southern California Gas, a subsidiary of Sempra, SoCal Gas, and any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of gas service within Southern California Gas service territory, and any successor to any of the foregoing.(4) San Diego Gas and Electric, a subsidiary of Sempra, SDG&E, and any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within San Diego Gas and Electrics service territory, and any successor to any of the foregoing.(k) Just transition means a framework for a fair shift to an economy that is ecologically sustainable, equitable, and just for all its members.(l) Low-income means at or below 80 percent of the state median income.(m) Microgrid means an interconnected system of loads and energy resources, including, but not limited to, distributed energy resources, energy storage, demand response tools, or other management, forecasting, and analytical tools, appropriately sized to meet customer needs, within a clearly defined electrical boundary that can act as a single, controllable entity, and can connect to, disconnect from, or run in parallel with larger portions of the electrical grid, or can be managed and isolated to withstand larger disturbances and maintain electrical supply to connected critical infrastructure.(n) Study team means one or more qualified organizations, public institutions, or consulting firms that is awarded the request for proposal to develop the study pursuant to Section 25251.(o) Successor entity means a public entity, public benefit corporation, or mutual benefit corporation.25251. (a) The commission, on or before March 31, 2026, based on the scoring evaluation developed and conducted by the Disadvantaged Communities Advisory Group, and in coordination with the public advisor and the Public Utilities Commission, shall issue a request for proposals for a team to develop a study to do all of the following:(1) Consistent with Section 25254, conduct a historical energy justice assessment of the IOUs operations and impacts on California residents, wildlife, and ecologies, with a focus on disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(2) Consistent with Section 25255, complete a comparative analysis of the benefits and challenges of transitioning the IOUs to a successor entity in order to identify a recommended model, assess the feasibility of transitioning the IOUs to a successor entity, and identify priority just design features for the successor entity, with the goal of serving the public interest and necessity of the people and ecologies of California.(3) Consistent with Section 25257, if the study, as approved by the commission, finds that it is in the best long-term interests of the people and ecologies of California to transition away from the investor-owned utility model, create a justice-centered implementation plan for managing the transition, including all appropriate mechanisms and any statutory changes that may be required. (b) The request for proposals shall seek applications that contain one or more organizations, public universities, or consultants with a demonstrated commitment to working with disadvantaged communities, and include partnership with the Disadvantaged Communities Advisory Group, and one or more community-based organizations that have supported the formation of Golden State Energy. (c) Organization qualifications shall include all of the following:(1) An eligible organization or consultant shall not have received more than one-half their income in the last three years from or for investor-owned utilities. An organization or consultant that has more than 10 percent of their work from any investor-owned utilities in California shall be required to set up appropriate safeguards to prevent conflicts of interest in the study analysis. An eligible institution, department, or principle investigator within a university shall not have received more than 10 percent of their funding in the past five years from investor owned utilities.(2) An eligible organization or consultant team shall demonstrate:(A) Through references from at least three jurisdictions, experience in policy, finance, grid design, and structural redesign work performed for jurisdictions with a population size of at least 1,000,000 people or a geographic area of 500 square miles.(B) Through case studies of prior work, demonstrated ability to fairly engage and integrate multiple stakeholder perspectives involved in or impacted by renewable energy generation, distribution, or transmission systems.(C) A clear record of research that indicates knowledge of, and engagement with, multiple utility ownership models, including both municipal and investor owned utilities.(D) A clear record of research that demonstrates an understanding of the energy justice and distributional impacts of current energy systems and protocols across the utility system.(d) On or before June 30, 2026, the commission, based on scoring developed and conducted by the Disadvantaged Communities Advisory Group, and with supporting resources and recommendations from the Public Utilities Commission, shall select the team with the highest score that meets the qualifications outlined in subdivision (c) and demonstrates their ability to meet study objectives outlined in subdivision (a) and Sections 25254, 25255, and 25257 as the study team.(e) The commission shall hold a public proceeding and submit a report of the study teams findings and recommendations, including any statutory changes that may be required, to the Legislature, in compliance with Section 9795 of the Government Code, no later than 24 months after selecting the study team for the feasibility portion of the study, and no later than 36 months after selecting the study team for the implementation plan portion of the study. 25252. (a) The commission shall require the study team to select and convene an advisory council, with recommendations from the Disadvantaged Communities Advisory Group, by December 31, 2026, to participate in the study of the vision for a new energy system as outlined in Section 25255. The advisory council shall review and provide recommendations on the initial scope of the study and implementation plan and on all preliminary and final drafts. Comments and recommendations from the advisory council that are not incorporated by the study team shall be included as an addendum to the study.(b) (1) The advisory council shall be drawn from diverse backgrounds to represent interests of disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes throughout the IOUs service territories and represent geographically diverse areas of California and consist of at least 13 members who collectively represent the following lived experiences and subject matter expertise:(A) Tribal utilities.(B) Community choice aggregation.(C) Low-income residential ratepayer advocacy.(D) Equitable rate design and utility cost allocation.(E) Environmental justice, energy justice, or utility justice issues.(F) Racial and economic justice.(G) Survivors of IOU-caused wildfires.(H) Disability rights.(I) Federally recognized California Indian tribes.(J) Nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(K) Labor unions representing utility workers.(L) Inclusive workforce development.(M) Deep knowledge of distributed energy resources and grid architecture.(2) Members of the advisory council shall not be current or previous employees, or current contractors, of an electrical corporation, as defined in Section 218 of the Public Utilities Code.(c) Members of the advisory council shall be entitled to per diem compensation and reimbursement of expenses for meetings, upon appropriation by the Legislature.25253. (a) For purposes of carrying out this chapter, the study team may do all of the following:(1) Consult with any stakeholders as needed or appropriate.(2) Request the production of books, records, correspondence, figures, charts, memoranda, papers, and documents, and other relevant materials of any nature from the commission, the Public Utilities Commission, and the IOUs.(b) For purposes of carrying out this chapter, the study team shall do all of the following:(1) Collaborate with the advisory council and the commission, through the Public Advocates Office, to host a minimum of four public hearings in geographically diverse regions of the IOUs service territories and during a variety of times to accommodate different work schedules.(2) In its specific findings, clarify all assumptions for findings and include citations to the original data or source for those assumptions.(c) A member of the study team may, if authorized by the prime consultant, take any action that the overall consultant team is authorized to take pursuant to this section.(d) On behalf of the commission, the study team may acquire directly from the head of a state agency available information that they consider useful in fulfilling their deliverables. All state agencies shall cooperate with the commission on behalf of the study team with respect to such information and shall furnish all information requested by the study team to the extent permitted by law. The study team shall keep confidential any information received from a state agency that is confidential or exempt from the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) or subject to a nondisclosure agreement.(e) As consultants to the commission, the study team shall have the administrative, technical, and legal assistance of the Department of Justice, the commission, the Public Utilities Commission, and the State Air Resources Board.(f) The study team may procure supplies and services by contract in accordance with applicable laws and rules.(g) The study team may enter into subcontracts for purposes of conducting research or surveys, preparing reports, and performing other activities necessary for the fulfillment of their research deliverables with state departments, agencies, and other instrumentalities of the state, federal departments, agencies, and other federal instrumentalities, and private entities. Subcontractors shall also meet the qualifications outlined in paragraph (1) of subdivision (c) of Section 25251.(h) For purposes of carrying out this chapter, the commission, through the Public Advocates Office, may do all of the following in service of completion of deliverables for the contract:(1) Hold hearings and sit and act at any time and location in California.(2) Consult with any issueholders as deemed necessary to achieve the objectives of this chapter.(3) Request the attendance and testimony of witnesses.(4) Seek an order from a superior court compelling testimony or compliance with a subpoena, including from the IOUs executive leadership.25254. The historical energy justice assessment component of the study described in Section 25251 shall assess the IOUs historical and ongoing operations and impacts on California residents, wildlife, and ecologies, with a focus on impacts to disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission, broken down by ZIP Code, income, race, age, and other relevant demographics. The assessment shall include, but is not limited to, all of the following:(a) An assessment and quantification of the distribution of health harms and reduced lifespans resulting from wildfires, polluting energy generation facilities, and infrastructure.(b) An assessment and quantification of the economic distribution of clean energy investments, incentives, and ownership.(c) An assessment of the impacts of rate increases and the extent and distribution of energy burdens based on historical rates.(d) An assessment of the distribution and quantity of utility disconnections, including disconnections due to lack of payment and public safety power shutoffs.(e) An assessment of the emotional, economic, ecological, and safety-related impacts from disasters caused by the IOUs, including, but not limited to, wildfires, pipeline explosions, power shutoffs, deenergization events, and the potential health impacts and lifespan reductions from those impacts.(f) An assessment of the pollution and other ecological impacts from energy generating infrastructure and the potential health impacts and lifespan reductions from those impacts.(g) An assessment of the extent and distribution of delayed or lack of provision of electricity and gas service and hookups.(h) An assessment of the liability incurred by, and during, the IOUs ownership, including specifying the portion of risks and liabilities likely to be transferred to a successor entity.(i) A quantification of the IOUs current tax obligations to the state.(j) An assessment of lands taken or received that were previously owned and stewarded by federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(k) An assessment of the IOUs historical and ongoing impacts on California wildlife, endangered species, and ecologies.(l) An assessment and audit of the IOUs capital expenditures and operating expenses to identify the cost-effectiveness of infrastructure investments.25255. (a) The comparative analysis of the benefits and challenges component of transitioning the IOUs to a recommended successor entity portion of the study described in paragraph (2) of subdivision (a) of Section 25251 shall provide a comparative assessment of transitioning the IOUs to either a public entity, nonprofit public benefit corporation, or mutual benefit corporation, assess the overall feasibility of transitioning the IOUs to a successor entity, and identify priority energy just design features for a successor entity.(b) The comparative analysis shall comprise all of the following:(1) An assessment of all legal, economic, financial, governance, and other relevant aspects of the ownership types required to successfully transition the assets and operations of the IOUs to a nonprofit public benefit corporation, such as Golden State Energy, a mutual benefit corporation, or a publicly owned electric utility, which may be in existence or yet to be formed.(2) An assessment of whether there are any structural limitations or advantages of each ownership type relative to the successor entitys ability to serve the people of California and to achieving the following policy objectives:(A) A demonstrable reduction in electricity costs for customers over a 30-year period, with a focus on increasing energy bill affordability for low-income communities, disadvantaged communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes, ensuring electricity costs are less than 3 percent of household income.(B) Increased opportunity for labor benefits through maintaining pensions and increasing benefits for workers, increasing good union jobs and inclusive workforce development in the region.(C) Increased public accountability, trust, and transparency in governing structures, financial spending, maintenance, and infrastructure decisions.(c) The feasibility assessment shall include all of the following:(1) Identification of legal and regulatory issues, and recommendations for addressing these issues, that might arise from transitioning the assets and operations of the IOUs and their respective operations as described in this chapter, and post-transition, in order to do all of the following:(A) Maintain the authority for the establishment of municipal utility districts, rural electric cooperatives, and tribal utilities, and ensure the successor entity cooperates with other public entities.(B) Safeguard or strengthen the worker and labor benefits, including union protections, during and after the transition period, and provide for workers rights and a just transition for workers impacted by the decommissioning of unsafe, polluting infrastructure.(C) By no later than 2032, safely decommission generation, transmission, and piping infrastructure transferred to the successor entity that is unsafe and polluting, prioritizing infrastructure that is causing disproportionate harms in disadvantaged communities, low-income communities, federally recognized California Indian tribes, or nonfederally recognized California Native American tribes.(D) Manage future wildfire liability.(E) Equitably decommission gas infrastructure and transition towards electrification, prioritizing the decommissioning of gas powerplants in disadvantaged communities and replacement with community-owned distributed energy resources without unduly burdening ratepayers, especially low-income or disadvantaged ratepayers, with associated costs.(2) A preliminary evaluation of the long-term costs and benefits over at least a 30-year horizon of a transfer in ownership to a successor entity, including an assumption for clean energy, electrification, and grid investments at a pace in accordance with state climate goals. This evaluation shall incorporate all of the following:(A) The potential for securitization of debt, including consideration of tax-exempt bonding for municipal utilities.(B) Consideration of the portion of utility capital expenses paid for by ratepayer contributions.(C) Application of all legally claimed depreciation of assets by the IOUs.(D) Equitable finance and revenue sources that may be available to the successor entity for its operational needs, including for purchase, maintenance, and upgrades, with information regarding all of the following:(i) Mechanisms to support the creditworthiness of the successor entity during the early years of operation.(ii) Access to bonds.(iii) Long-term opportunities for public financing.(iv) Ability to leverage federal funding in the form of elective pay, as outlined in the Inflation Reduction Act of 2022 (Public Law 117-169).(v) Options for revenue collected from rates and other financial resources.(3) A thorough consideration of which IOU assets should be prioritized for transfer and a timeline for those transfers, including all of the following:(A) The merits or risks of splitting ownership of the IOUs distribution infrastructure, transmission infrastructure, program administration, generation, and retail energy services.(B) The merits or risks of splitting ownership of the IOUs electrical and gas infrastructure.(C) The merits or risks of splitting ownership by geographic territory.(D) A full consideration of which assets to prioritize for transfer and a timeline for those transfers, including consideration of grid architectures that maximize distributed energy resources and future needs for distribution system operator infrastructure.(E) An evaluation of potential benefits, if any, that may be realized by separating the ownership and operation of the electrical distribution system for future distribution system operator models.(d) The identification of just design features for a successor entity and the mechanisms to realize them shall include, but not be limited to, all of the following:(1) The acknowledgment, rectification, and repair of prior harms, as found in the historical energy justice assessment pursuant to Section 25254.(2) Increasing social equity, electrical system reliability and performance, ecological sustainability, and climate resilience, including the ability to adapt to adverse climate-related weather disasters and other economic, social, and infrastructural crises.(3) Minimizing environmental health harms in the region and in homes.(4) Enhancing stewardship of finite resources and fragile ecologies through reducing the need for future large scale buildout, land clearing, or installation of ecologically disruptive energy generation, transmission, and distribution assets, and minimizing extraction of critical minerals.(5) Focusing on disadvantaged communities, low-income communities, federally recognized California Indian tribes, and nonfederally recognized California Native American tribes in decisionmaking processes.(6) Creating innovative participatory governance and accountability structures that enable community members, including low-income members and users with disabilities, to meaningfully impact the priorities of the successor entity.(7) Adopting mechanisms for sustained public engagement and transparency that holds the successor entity accountable to its mission to serve the communitys well-being.(8) Creating alternative mechanisms to utility disconnections to cover nonpayment by customers.(9) Including nonenergy impacts, social costs and benefits, health impacts, and more equitable climate outcomes in evaluating cost-effectiveness and decisionmaking.(10) Creating governance of the successor entity in a manner that maximizes public participation and energy democracy, including all of the following:(A) Whether members of the board of directors of the successor entity should be appointed pursuant to Part 2 (commencing with Section 3420) of Division 1.7 of the Public Utilities Code, elected by the customers of the successor entity, or a combination of appointees and elected members, and what type of expertise or experience should be represented.(B) Term limits for members of the board of directors.(C) Size and representation of the board of directors.(D) Involvement of, and robust funding of, technical assistance mechanisms to support community-based organizations in contributing to the decisions of the board of directors.(E) Adequate full-time staffing needs for the board of directors.(11) Requirements on the operations of the successor entity, including on all of the following:(A) Data collection by the successor entity and the public availability of collected data.(B) Public engagement and transparency, including all of the following:(i) Public engagement timelines and processes for rate cases, budget planning, and other policy and program approvals.(ii) Public meetings, notices, and comment periods.(iii) Relationships with local government, including reporting and communication requirements on projects undertaken by the successor entity with defined local economic benefits.25256. (a) Upon completion of the study components described in Sections 25254 and 25255, the study team, in consultation with the advisory council, consistent with Section 25252, shall recommend a particular successor entity ownership type to the commission for further feasibility review and implementation considerations.(b) On or before September 30, 2028, the commission, through a public process, shall vote to approve the study and recommended a particular successor entity ownership type based on a rubric comparing each of the successor entity ownership types to the incumbent IOU model using the following criteria:(1) Long-term affordability for the state and for ratepayers.(2) Safety.(3) Reliability.(4) Climate resilience.(5) Local economic benefits.(6) Health impacts.(7) Energy justice. 25257. (a) If the study, as approved by the commission, finds that it is in the best long-term interests of the people and ecologies of California to transition away from the investor-owned utility model, the study team shall begin work to create a justice-centered implementation plan, as described in paragraph (3) of subdivision (a) of Section 25251, to outline a timeline and transition process to the successor entity, including recommendations for which branches of government or agencies should be responsible and coordinate with which portions of the public to ensure the transition fairly minimizes burdens and unintended consequences and fairly maximizes benefits in service of the public interest and necessity.(b) The implementation plan shall identify all appropriate implementation mechanisms, including statutory changes that may be required, recommendations for specific bylaws, operating procedures, governance structures, or otherwise to ensure the successor entity is structured, operationalized, and has the proper authority and mandate to ensure more just outcomes, based in part on findings pursuant to Sections 25254 and 25255.(c) The implementation plan shall additionally do all of the following:(1) Recommend mechanisms to fairly set the acquisition cost and valuation in as legally defensible and timely manner as possible, with the goal of avoiding lengthy periods of litigation over the acquisition cost.(2) Recommend an appropriate regulatory structure to clearly delineate the relationship between the Public Utilities Commission and the successor entity, including consideration of an independent oversight body for the successor entity.(3) Provide for community benefit agreements and other local economic benefit and cost savings to the maximum extent possible for new infrastructure investments and maintenance, prioritizing clean distributed energy resources.(d) The commission, through a public process, shall vote to approve the implementation plan on or before October 31, 2029.SEC. 4. Article 4.5 (commencing with Section 570) is added to Chapter 3 of Part 1 of Division 1 of the Public Utilities Code, to read: Article 4.5. Infrastructure Project Procurement570. For purposes of this article, all of the following definitions apply:(a) Best value means a procurement process whereby the selected bidder is selected on the basis of objective criteria for evaluating the qualifications of bidders with the resulting selection representing the best combination of price and qualifications.(b) Best value contract means a competitively bid contract entered into pursuant to this article.(c) Best value contractor means a properly licensed person, firm, or corporation that submits a bid for, or is awarded, a best value contract.(d) Demonstrated management competency means the experience, competency, capability, and capacity of the proposed management staff to complete projects of similar size, scope, or complexity.(e) Financial condition means the financial resources needed to perform the contract. The criteria used to evaluate a bidders financial condition shall include, at a minimum, capacity to obtain all required payment bonds, performance bonds, and liability insurance.(f) Labor compliance means the ability to comply with, and past performance with, contract and statutory requirements for the payment of wages and qualifications of the workforce. The criteria used to evaluate a bidders labor compliance shall include, at a minimum, the bidders ability to comply with the apprenticeship requirements of the California Apprenticeship Council and the Department of Industrial Relations, its past conformance with those requirements, and its past conformance with requirements to pay prevailing wages on public works projects.(g) Qualifications means the financial condition, relevant experience, demonstrated management competency, labor compliance, and safety record of the bidder, and, if required by the bidding documents, some or all of the preceding qualifications as they pertain to subcontractors proposed to be used by the bidder for designated portions of the work. The commission shall evaluate financial condition, relevant experience, demonstrated management competency, labor compliance, and safety record, using, to the maximum extent possible, quantifiable measurements.(h) Relevant experience means the experience, competency, capability, and capacity to complete projects of similar size, scope, or complexity.(i) Safety record means the prior history concerning the safe performance of construction contracts. The criteria used to evaluate a bidders safety record shall include, at a minimum, its experience modification rate for the most recent three-year period and its average total recordable injury or illness rate and average lost work rate for the most recent three-year period.571. (a) The Office of Energy Infrastructure Safety shall develop a best value procurement model for all electrical corporation infrastructure projects. The best value procurement model shall consider all of the following:(1) Demonstrated management competency.(2) Financial condition.(3) Labor compliance.(4) Relevant experience.(5) Safety records.(b) For all infrastructure projects, each electrical corporation shall demonstrate to the commission that the selected contractor is the best value contractor and shall include all bids received in its submission to the commission.SEC. 4.SEC. 5. Section 706.5 is added to the Public Utilities Code, to read:706.5. (a) On or before April 1, 2026, each electrical corporation shall submit a proposed executive compensation structure to the commission that is structured to promote safety as a priority and to ensure public safety through performance metrics.(b) The performance metrics shall include, but not be limited to, all of the following:(1) Successful completion of vegetation management and wildfire mitigation plans.(2) Decommissioning and removing risky electrical lines.(3) Building self-generation supported microgrids throughout the state, including in rural and remote areas of the state.(c) The commission shall approve the compensation structure if it meets the requirements of subdivision (b).SEC. 5.Section 748.3 is added to the Public Utilities Code, to read:748.3.SEC. 6. Section 748.7 is added to the Public Utilities Code, to read:748.7. (a) For a proposed rate increase subject to commission approval and a finding that the new rate is just and reasonable, an electrical corporation shall not propose a compounded annual rate increase on residential customers above the increase in the Consumer Price Index.(b) For proposed rate increases not subject to commission approval and a finding that the new rate is just and reasonable, an electrical corporation shall not propose more than one rate increase per year, and the rate increase shall not apply to California Alternate Rates for Energy program or Family Electric Rate Assistance program customers.(c) For purposes of this section, Consumer Price Index means the greater of the Consumer Price Index for the West Region, the Consumer Price Index for major cities, or the United States Consumer Price Index.SEC. 6.Section 748.5 of the Public Utilities Code is amended to read:748.5.(a)Except as provided in subdivisions (c) and (d), the commission shall require revenues, including any accrued interest, received by an electrical corporation as a result of the direct allocation of greenhouse gas allowances to electric utilities pursuant to subdivision (b) of Section 95890 of Title 17 of the California Code of Regulations to be credited directly to the residential, small business, and emissions-intensive trade-exposed retail customers of the electrical corporation.(b)Not later than January 1, 2013, the commission shall require the adoption and implementation of a customer outreach plan for each electrical corporation, including, but not limited to, such measures as notices in bills and through media outlets, for purposes of obtaining the maximum feasible public awareness of the crediting of greenhouse gas allowance revenues. Costs associated with the implementation of this plan are subject to recovery in rates pursuant to Section 454.(c)The commission may allocate up to 15 percent of the revenues, including any accrued interest, received by an electrical corporation as a result of the direct allocation of greenhouse gas allowances to electrical distribution utilities pursuant to subdivision (b) of Section 95890 of Title 17 of the California Code of Regulations, for clean energy and energy efficiency projects established pursuant to statute that are administered by the electrical corporation, or a qualified third-party administrator as approved by the commission, and that are not otherwise funded by another funding source.(d)(1)Beginning with the fiscal year commencing July 1, 2026, and ending with the fiscal year ending June 30, 2036, from the revenues, including any accrued interest, received by an electrical corporation as a result of the direct allocation of greenhouse gas allowances to electrical distribution utilities pursuant to subdivision (b) of Section 95890 of Title 17 of the California Code of Regulations, the commission shall annually allocate one hundred million dollars ($100,000,000) to the Transformative Climate Communities Program (Part 4 (commencing with Section 75240) of Division 44 of the Public Resources Code) and annually allocate one hundred million dollars ($100,000,000) to the Community Resilience Center Program (Part 5 (commencing with Section 75250) of Division 44 of the Public Resources Code).(2)All moneys allocated for the Transformative Climate Communities Program and Community Resilience Center Program pursuant to this subdivision shall benefit disadvantaged communities in census tracts that are the most vulnerable to climate disaster, including, high wildfire risk areas and areas with power shutoff, flooding, and climate vulnerabilities.SEC. 7. Section 3289 of the Public Utilities Code is amended to read:3289. (a) (1) No later than July 26, 2019, the commission shall initiate a rulemaking proceeding to consider using its authority pursuant to Section 701 to require each electrical corporation, except a regional electrical corporation that chooses not to participate in any fund pursuant to Chapter 3 (commencing with Section 3291), to collect a nonbypassable charge from ratepayers of the electrical corporation to support the fund, including the payment of any bonds issued pursuant to Division 28 (commencing with Section 80500) of the Water Code, as follows:(A) For a large electrical corporation, a charge in an amount sufficient to fund the revenue requirement, as established pursuant to Section 80524 of the Water Code.(B) For a regional electrical corporation, the amount equal to one-half cent per kilowatt-hour ($0.005/kWh).(2) If the commission determines that the imposition of the charge described in paragraph (1) is just and reasonable, and that it is appropriate to exercise its authority pursuant to Section 701 to do so, the commission shall direct each electrical corporation to impose and collect that charge commencing in the month immediately following the month in which the final imposition of the revenue requirement with respect to bonds previously issued pursuant to Division 27 (commencing with Section 80000) of the Water Code is made. The charge shall be collected in the same manner as that for the payments made to reimburse the Department of Water Resources pursuant to Division 27 (commencing with Section 80000) of the Water Code.(b) Notwithstanding any other law, no later than 90 days after the initiation of the rulemaking proceeding, the commission shall adopt a decision regarding the imposition of the charge.(c) (1) Notwithstanding Section 455.5 or 1708, or any other law, the commission shall not revise, amend, or otherwise modify a decision to impose a charge made pursuant to this section at any time before January 1, 2036.(2) Notwithstanding paragraph (1), the commission shall revise the decision adopted pursuant to subdivision (b) to reduce the charge imposed on ratepayers pursuant to subdivision (a) to an amount equal to 5 percent of the costs to support the fund, and require each electrical corporation to contribute the remaining 95 percent of the costs to support the fund.(d) If the administrator authorizes Golden State Energy to participate in the fund pursuant to subdivision (d) of Section 3292, Golden State Energys ratepayers shall be subject to the nonbypassable charge previously imposed by the commission pursuant to this section.SEC. 8. Section 3292 of the Public Utilities Code is amended to read:3292. (a) If, no later than July 27, 2019, each large electrical corporation not subject to an insolvency proceeding on July 12, 2019, notifies the commission of its commitment to provide the initial contribution and the annual contributions, and subsequently provides its initial contribution as set forth in paragraph (3) of subdivision (b), the fund shall be established to pay eligible claims as set forth in subdivision (f) and obtain reimbursement from electrical corporations as set forth in subdivision (h).(b) Except as provided in subdivision (d), to participate in the fund established pursuant to subdivision (a), an electrical corporation shall satisfy the following conditions by no later than June 30, 2020:(1) The electrical corporation is not, and has not been since July 12, 2019, the subject of an insolvency proceeding or on criminal probation unless the electrical corporation meets the following conditions:(A) The electrical corporations insolvency proceeding has been resolved pursuant to a plan or similar document not subject to a stay.(B) The bankruptcy court or a court of competent jurisdiction, in the insolvency proceeding, has determined that the resolution of the insolvency proceeding provides funding or establishes reserves for, provides for assumption of, or otherwise provides for satisfying any prepetition wildfire claims asserted against the electrical corporation in the insolvency proceeding in the amounts agreed upon in any pre-insolvency proceeding settlement agreements or any post-insolvency settlement agreements, authorized by the court through an estimation process or otherwise allowed by the court.(C) The commission has approved the reorganization plan and other documents resolving the insolvency proceeding, including the electrical corporations resulting governance structure as being acceptable in light of the electrical corporations safety history, criminal probation, recent financial condition, and other factors deemed relevant by the commission.(D) The commission has determined that the reorganization plan and other documents resolving the insolvency proceeding are (i) consistent with the states climate goals as required pursuant to the California Renewables Portfolio Standard Program and related procurement requirements of the state and (ii) neutral, on average, to the ratepayers of the electrical corporation.(E) The commission has determined that the reorganization plan and other documents resolving the insolvency proceeding recognize the contributions of ratepayers, if any, and compensate them accordingly through mechanisms approved by the commission, which may include sharing of value appreciation.(2) For a regional electrical corporation, it has voluntarily established a charge required by the commission pursuant to Section 3289. This charge shall be included on monthly bills for customers. Collections on that charge shall be remitted, on a monthly basis, to the administrator for deposit into the fund.(3) Except as provided in subdivision (e), the electrical corporation has provided its initial contribution to the fund no later than September 10, 2019. Initial contributions shall not be recovered from the ratepayers of an electrical corporation, except Golden State Energy.(c) Each participating electrical corporation shall make its annual contribution by January 1 of each calendar year, including, without limitation, any annual contributions for calendar years in which the electrical corporation, or another electrical corporation to which the electrical corporation is the successor, was not a participating electrical corporation. Annual contributions shall not be recovered from the ratepayers of an electrical corporation, except Golden State Energy.(d) (1) The administrator may, and in the case of Golden State Energy shall, authorize an electrical corporation that is formed after July 12, 2019, to participate in the fund if the administrator determines that the electrical corporation meets the requirements of this section. Authorization of an electrical corporation that is formed after July 12, 2019, shall be effective as of a date determined by the administrator and shall apply to covered wildfires after the date of authorization.(2) If Golden State Energy is the successor to Pacific Gas and Electric Company and Pacific Gas and Electric Company made its initial contribution and, if applicable, annual contributions to the fund, the administrator shall not require Golden State Energy to commit to making, or make, its own initial contribution, or annual contributions for a period for which Pacific Gas and Electric Company already made its annual contributions, in order to participate in the fund and the administrator shall authorize Golden State Energy to participate in the fund if Golden State Energy, within 15 days of closing of the acquisition of Pacific Gas and Electric Company, notifies the commission of its commitment to make annual contributions to the fund.(e) An electrical corporation that is the subject of an insolvency proceeding on July 12, 2019, that wishes to participate in the fund shall (1) no later than July 27, 2019, provide written notification to the commission of its election to participate in the fund, and (2) no later than September 10, 2019, obtain approval from the bankruptcy court or a court of competent jurisdiction of its determination to pay, and approval of its payment of, the initial contribution and, as they become due, annual contributions to the fund, provided that the contributions shall not be due to the fund until the date the electrical corporation exits the insolvency proceeding. The electrical corporation shall not be entitled to seek payments from the fund pursuant to subdivision (f) until it has funded its initial contribution and has met the other conditions provided in subdivision (b). Participation of an electrical corporation that is the subject of an insolvency proceeding that satisfies the requirements of this subdivision shall be effective as of July 12, 2019, and shall apply to covered wildfires, provided that the fund shall not pay more than 40 percent of the allowed amount of a claim arising between July 12, 2019, and the date the electrical corporation exits bankruptcy, with the balance of those claims being addressed through the insolvency proceeding.(f) (1) An electrical corporation meeting the applicable requirements of subdivision (b) may seek payment from the fund to satisfy settled or finally adjudicated eligible claims. Only eligible claims shall be made against or paid by the fund. In accordance with the procedures established by the administrator, the administrator shall review and approve any settlement of an eligible claim as being in the reasonable business judgment of the electrical corporation before releasing funds to the electrical corporation for payment. Settlements of subrogation claims that are less than or equal to 40 percent of total asserted claim value as determined by the administrator shall be paid unless the administrator finds that the exceptional facts and circumstances surrounding the underlying claim do not justify the electrical corporations exercise of such business judgment. To the extent approved by the administrator, a settlement shall not be subject to further review by the commission.(2) The administrator shall approve a settlement of an eligible claim that is a subrogation claim if the settlement exceeds 40 percent of the total asserted claim value, as determined by the administrator, and includes a full release of the balance of the asserted claim so long as the administrator finds that the electrical corporation exercised its reasonable business judgment in determining to settle for a higher percentage or on different terms based on a determination that the specific facts and circumstances surrounding the underlying claim justify a higher settlement percentage or different terms. A subrogation claim that is finally adjudicated shall be paid in the full judgment amount.(g) Except for Golden State Energy, all initial and annual contributions shall be excluded from the measurement of the authorized capital structure.(h) (1) Except as provided in paragraph (2), within six months after the commission adopts a decision in an application filed pursuant to Section 1701.8, the electrical corporation shall reimburse the fund for the full amount of costs and expenses the commission determined were disallowed pursuant to Section 1701.8.(2) (A) The obligation of an electrical corporation to reimburse the fund shall be the lesser amount of subparagraph (B) or (C).(B) The costs and expenses determined not to be just and reasonable pursuant to Section 1701.8.(C) The amount determined pursuant to clause (i) minus the amount determined pursuant to clause (ii).(i) (I) Except as specified in subclause (II), for each electrical corporation, 20 percent of the electrical corporations total transmission and distribution equity rate base, including, but not limited to, its Federal Energy Regulatory Commission (FERC) assets, as determined by the administrator for the calendar year in which the disallowance occurred.(II) For Golden State Energys first twelve months of participation in the fund, an amount equal to 20 percent of Pacific Gas and Electric Companys total transmission and distribution equity rate base, including, but not limited to, its Federal Energy Regulatory Commission assets, at the time of the closing of the acquisition of Pacific Gas and Electric Company, as determined by the commission. For Golden State Energys subsequent years of participation in the fund, an amount determined by the commission that is equivalent to the amount specified in subclause (I) for electrical corporations with an equity rate base.(ii) The sum of (I) the amounts actually reimbursed to the fund for costs and expenses that were determined not to be just and reasonable pursuant to Section 1701.8 during the measurement period, added to (II) the amount of any reimbursements to the fund owed by the electrical corporation for costs and expenses disallowed during the measurement period that have not yet been paid.(iii) For purposes of this subparagraph, measurement period means the period of three consecutive calendar years ending on December 31 of the year in which the calculation is being performed.(D) The administrator shall publish calculations of the amounts determined pursuant to subparagraphs (B) and (C) on or before January 1 of each calendar year for each electrical corporation.(E) Except as provided in paragraph (3), the electrical corporation shall not be required to reimburse the fund for any additional amounts in any three-calendar-year period.(F) The limitation set forth in this section shall apply only so long as the fund has not been terminated pursuant to subdivision (i).(3) Paragraph (2) does not apply under either of the following circumstances:(A) If the administrator determines that the electrical corporations actions or inactions that resulted in the covered wildfire constituted conscious or willful disregard of the rights and safety of others. For purposes of this subparagraph, evidence that the electrical corporations actions were prudent shall include common sense best practices such as conducting annual audits and replacing equipment that has outlived its usable life pursuant to Section 8386.7, 8386.8, and deenergizing the electrical grid under threatening conditions.(B) If the electrical corporation failed to maintain a valid safety certification on the date of the ignition.(i) (1) The administrator shall, to the extent practicable, manage the fund to prioritize the use of electrical corporation contributions before the use of ratepayer contributions.(2) The fund shall terminate when the administrator determines that the fund resources are exhausted, taking into account the amount of any unpaid liabilities including necessary reserves, any remaining unpaid annual contributions from participating electrical corporations, and the charges authorized pursuant to Section 3289. Upon the determination of the administrator that the fund shall be terminated, the administrator shall pay all remaining eligible claims and fund expenses, and liquidate any remaining assets. The remaining funds shall be transferred to the General Fund. It is the intent of the Legislature that any funds transferred to the General Fund pursuant to this paragraph shall be appropriated to support wildfire mitigation.(j) Notwithstanding subdivision (f), a regional electrical corporations access to the fund to pay eligible claims shall be limited to three times the sum of the regional electrical corporations initial contribution and any funded annual contributions per covered wildfire.SEC. 9.Section 8386.7 is added to the Public Utilities Code, to read:8386.7.SEC. 9. Section 8386.8 is added to the Public Utilities Code, to read:8386.8. (a) Each electrical corporation shall annually triennially contract with an independent and reputable third party to audit all of the electrical corporations equipment and electrical lines and identify any equipment or electrical lines that have outlived their useable life. reached their end-of-life. The audit shall be completed on or before June 30, 2026, and by June 30 of each year thereafter, and submitted to the commission on or before August 31 of each year. in alignment with the wildfire mitigation plan cycle described in subdivision (b) of Section 8386.(b) (1) An electrical corporation shall replace equipment and electrical lines identified by the independent third-party auditor pursuant to an audit described in subdivision (a) that are located in a high fire risk area fire-threat district within five years of the audit.(2) Equipment and electrical lines that are replaced pursuant to paragraph (1) shall be undergrounded. An electrical corporation shall not pass on the cost of undergrounding equipment pursuant to this paragraph to the ratepayers unless the commission determines that the electrical corporations earnings before interest and taxes for the previous year, multiplied by five as a basis for potential earnings before interest and taxes for the next five years, cannot fund the undergrounding work, in which case the commission shall determine what the minimal passthrough to ratepayers may be. ratepayers.(3) If it is more cost effective effective, considering the need to minimize the risk of catastrophic wildfire as quickly as possible, and meets the overall electrical grid needs, an electrical corporation may shall install microgrid technology technology, or other wildfire mitigation alternatives, including covered conductors that conform to state and industry safety standards for electrical equipment, instead of replacing equipment and electrical lines pursuant to paragraph (1). An electrical corporation shall not pass on the costs of wildfire mitigation pursuant to this paragraph to ratepayers.(c) (1) The commission shall assess a fine on an electrical corporation that fails to comply with this section, as follows:(A) The commission shall assess a fine on an electrical corporation that fails to complete an annual audit pursuant to subdivision (a) in an amount equal to 1 percent of the electrical corporations gross revenue for the preceding year. For each subsequent year that an electrical corporation fails to complete an annual audit the fine amount shall be increased to an amount equal to 3 percent of the electrical corporations gross revenue for the preceding year.(B) The commission shall assess a fine on an electrical corporation that fails to replace equipment pursuant to subdivision (b). The fine shall be, at minimum, the estimated cost of the replacement plus 10 percent, as determined by the third-party auditor. (2) Fines collected pursuant to this subdivision shall be used to finance needed repairs. Any excess funds available after needed repairs may be transferred to a future maintenance and repair budget.(d) For purposes of this section, the following definitions apply:(1) End-of-life means the point when the equipment is no longer safe, reliable for use, or performing its intended function within established standards and specifications, and should be decommissioned or replaced.(2) High fire-threat district has the same meaning as defined in Section 3280.SEC. 10.Section 8388.5 of the Public Utilities Code is amended to read:8388.5.(a)The commission shall establish an expedited utility distribution infrastructure undergrounding program consistent with this section.(b)All large electrical corporations shall participate in the program.(c)In order to participate in the program, a large electrical corporation shall submit to the office a distribution infrastructure undergrounding plan that shall address or include, at minimum, all of the following components:(1)A 10-year plan for undergrounding distribution infrastructure.(2)Identification of the undergrounding projects that will be constructed as part of the program, including a means of prioritizing undergrounding projects based on wildfire risk reduction, public safety, cost efficiency, and reliability benefits. Only undergrounding projects located in tier 2 or 3 high fire-threat districts or rebuild areas may be considered and constructed as part of the program.(3)Timelines for the completion of identified and prioritized undergrounding projects, and unit cost targets and mileage completion targets for each year covered by the plan.(4)A comparison of undergrounding versus aboveground hardening of electrical infrastructure and wildfire mitigation for achieving comparable risk reduction, or any other alternative mitigation strategy, such as covered conductor and rapid earth fault current limiter devices, for those prioritized undergrounding projects, evaluating the scope, cost, extent, and risk reduction of each activity, separately and collectively, over the duration of the plan. The comparison shall emphasize risk reduction and include an analysis of the cost of each activity for reducing wildfire risk, separately and collectively, over the duration of the plan.(5)A plan for utility and contractor workforce development.(6)An evaluation of project costs, projected economic benefits over the life of the assets, and any cost containment assumptions, including the economies of scale necessary to reduce wildfire risk and mitigation costs and establish a sustainable supply chain.(d)Upon a large electrical corporation submitting a plan to the office, the office shall do both of the following:(1)Publish the plan for public comment.(2)Within nine months, review and approve or deny the plan. The office may only approve the plan if the large electrical corporation has shown that the plan will substantially increase electrical reliability by reducing the use of public safety power shutoffs, enhanced powerline safety settings, deenergization events, and any other outage programs, and substantially reduce the risk of wildfire. Before approving the plan, the office may require the large electrical corporation to modify the plan.(e)(1)Upon the office approving a plan pursuant to paragraph (2) of subdivision (d), the large electrical corporation shall, within 60 days, submit to the commission a copy of the plan and an application requesting review and conditional approval of the plans costs and including all of the following:(A)Any substantial improvements in safety risk and reduction in costs compared to other hardening and risk mitigation measures over the duration of the plan.(B)The cost targets, at a minimum, that result in feasible and attainable cost reductions as compared to the large electrical corporations historical undergrounding costs.(C)How the cost targets are expected to decline over time due to cost efficiencies and economies of scale.(D)A strategy for achieving cost reductions over time.(2)The assigned commissioner may waive the requirements of subdivisions (b), (d), (f), and (i) of Section 1701.3 for an application submitted to the commission pursuant to paragraph (1).(3)In reviewing an application submitted to the commission pursuant to paragraph (1), the commission shall consider not revisiting cost or mileage completion targets approved, or pending approval, in the electrical corporations general rate case or a commission-approved balancing account ratemaking mechanism for system hardening.(4)Upon the commission receiving an application pursuant to paragraph (1), the commission shall facilitate a public workshop for presentation of the plan and take public comment for at least 30 days.(5)On or before nine months, the commission shall review and approve or deny the application. Before approving the application, the commission may require the large electrical corporation to modify or modify and resubmit the application.(6)The commission shall consider continuing an existing commission-approved balancing account ratemaking mechanism for system hardening for the duration of a plan, as determined by the commission, and shall authorize recovery of recorded costs that are determined to be just and reasonable.(f)If the plan is approved by the office and commission, the large electrical corporation shall do all of the following:(1)Every six months, file a progress report with the office and the commission. The large electrical corporation and the office shall publish these progress reports on their internet websites.(2)Include ongoing work plans and progress in annual wildfire mitigation plan filings.(3)Hire an independent monitor, selected by the office, to review and assess the large electrical corporations compliance with its plan and submit a report with the office each December 1 over the course of the plan.(g)(1)In reviewing and assessing the large electrical corporations compliance with its plan pursuant to paragraph (3) of subdivision (f), the independent monitor shall assess whether the large electrical corporations progress on undergrounding work has been consistent with the objectives identified in its plan. The independent monitors report shall specify any failure, delays, or shortcomings of the large electrical corporation and provide recommendations for improvements to accomplish the objectives set forth in the plan.(2)The large electrical corporation shall have 180 days to correct and eliminate any deficiency specified in the independent monitors report.(3)On or before December 1 of each year the plan is in effect, the independent monitor shall submit the report to the office.(h)The office shall publish reports received pursuant to paragraph (3) of subdivision (g) on its internet website.(i)(1)The office shall consider the independent monitors report and whether the large electrical corporation has cured any deficiencies, and may recommend penalties to the commission.(2)The commission may assess penalties on a large electrical corporation that fails to substantially comply with a commission decision approving its plan.(j)Each large electrical corporation participating in the program shall apply for available federal, state, and other nonratepayer moneys throughout the duration of its approved undergrounding plan, and any moneys received as a result of those applications shall be used to reduce the programs costs on the large electrical corporations ratepayers.SEC. 11.SEC. 10. Section 8388.6 is added to the Public Utilities Code, to read:8388.6. After an emergency or disaster in which an electrical corporations electrical infrastructure was destroyed, if the electrical corporation shall rebuild rebuilds the destroyed electrical infrastructure using infrastructure, it shall use the most cost-effective wildfire mitigation strategies that conform to state and industry safety standards for electrical equipment and that minimize the risk of catastrophic wildfire as quickly as possible, including consideration of undergrounding and covered conductor methods, to the extent applicable. The cost of undergrounding undergrounding, installing covered conductors, or other more cost-effective wildfire mitigation strategies for electrical infrastructure pursuant to this section shall not be recovered from ratepayers.SEC. 12.SEC. 11. Chapter 10 (commencing with Section 8450) is added to Division 4.1 of the Public Utilities Code, to read: CHAPTER 10. Utility Service Disconnections8450. The Legislature finds and declares all of the following:(a) Access to electricity and heating services is a human right that no one should be deprived of due to an inability to pay.(b) Electricity is essential to the health, safety, and welfare of the people of this state and to the states economy.(c) It is the responsibility of state government to ensure that a reliable supply of electricity is maintained at a level consistent with the need for the electricity to protect public health and safety, promote the general welfare, and protect environmental quality.(d) Gas and electrical service shutoffs threaten the health of infants, children, the elderly, low-income families, communities of color, people for whom English is a second language, physically disabled persons, and persons with life-threatening medical conditions.(e) Section 779.3 of the Public Utilities Code prohibits a gas or electrical corporation from disconnecting service for nonpayment by a residential customer receiving a medical baseline allowance when the customer or a member of the customers household is under hospice care at home, depends upon life-support equipment, or has a life-threatening condition or illness.(f) Public Utilities Commission Decision 20-06-003 (June 16, 2020), Phase I Decision Adopting Rules and Policy Changes to Reduce Residential Customer Disconnections for the Larger California-Jurisdictional Energy Utilities, prohibits large investor-owned utilities from doing both of the following:(1) Disconnecting residential customers when temperatures above 100 degrees or below 32 degrees are forecasted based on a 72-hour look-ahead period.(2) Disconnecting residential customers who currently have Low-Income Home Energy Assistance Program pledges pending.(g) In response to the COVID-19 pandemic, Public Utilities Commission Resolution M-4842 (April 17, 2020), Emergency Authorization and Order Directing Utilities to Implement Emergency Customer Protections to Support California Customers During the COVID-19 Pandemic, required electrical and gas utilities to suspend disconnection for nonpayment, commonly known as the COVID-19 disconnection moratorium.(h) The COVID-19 disconnection moratorium ended in September 2021, but California investor-owned utilities began disconnecting their customers for nonpayment in August 2022.(i) From August 2022 to August 2024, Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas and Electric Company collectively disconnected their customers for nonpayment 412,787 times.(j) From August 2022 to August 2024, Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas and Electric Company also compensated their shareholders with $7,620,000,000 in dividends. During that period, the estimated cost to prevent all residential shutoffs for nonpayment was seventy-seven hundredths of 1 percent of that compensation to shareholders.8451. For purposes of this chapter, the following definitions apply:(a) Adult means a person 18 years of age or older.(b) Economic unit means all adults contributing to and sharing in the income and expenses of a household.(c) Electrical corporation has the same meaning as defined in Section 218.(d) Gas corporation has the same meaning as defined in Section 222.(e) Household means a residential address shared by a group of adults, including the utility customer, and children who are living together at that address as one economic unit. A household may contain related and unrelated persons. If an adult has no, or minimal, income and lives with an adult who provides financial support to that adult, both adults are part of the same household. A child under 18 years of age and living with a parent or guardian is part of the same household as the parent or guardian.(f) Local publicly owned electric utility has the same meaning as defined in Section 224.3.(g) Residential service means the provision of electrical or natural gas service to a residential connection at a single-family residence, a multifamily residence, a mobilehome, including, but not limited to, a mobilehome in a mobilehome park, or farmworker housing.(h) Utility means an electrical corporation, local publicly owned electric utility, gas corporation, or local publicly owned gas utility.8452. (a) A utility shall not disconnect a customers residential service for nonpayment if the customers household is the residence of any of the following persons:(1) A child five years of age or younger, regardless of the customers relationship with the child.(2) A person 65 years of age or older.(3) A person with a disability, consistent with subdivision (d).(4) A person with a medical condition, consistent with subdivision (d).(5) A person who is pregnant or 0 to 12 weeks postpartum, consistent with subdivision (e).(b) (1) A utility shall not disconnect a customers residential service for nonpayment if the customer has a household income at or below 200 percent of the federal poverty line.(2) For purposes of paragraph (1), a utility shall deem a residential customer to have a household income below 200 percent of the federal poverty line if any member of the household is a current recipient of a benefit or discount pursuant to one or more of the following programs, or if the customer declares that the households annual income is less than 200 percent of the federal poverty level:(A) The California Alternative Rates for Energy (CARE) program, as described in Section 739.1.(B) The CalWORKS program, as described in Chapter 2 (commencing with Section 11200) of Part 3 of Division 9 of the Welfare and Institutions Code.(C) CalFresh, as described in Section 18900.2 of the Welfare and Institutions Code.(D) General assistance, as described in Part 5 (commencing with Section 17000) of Division 9 of the Welfare and Institutions Code.(E) Medi-Cal, as described in Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code.(F) Federal Supplemental Security Income, as described in Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.).(G) The State Supplementary Payment Program, as described in Chapter 3 (commencing with Section 12000) of Part 3 of Division 9 of the Welfare and Institutions Code.(H) The California Special Supplemental Nutrition Program for Women, Infants, and Children, as described in Section 123280 of the Health and Safety Code.(3) For purposes of paragraph (2), a utility shall provide a customer with the ability to confirm eligibility for enrollment through a request for self-certification of eligibility under penalty of perjury.(c) On and after January 1, 2026, each electrical corporation and gas corporation shall automatically reconnect all households that are eligible for protection under subdivision (a) or (b) that had their residential service disconnected due to nonpayment.(d) (1) (A) In order for the prohibition described in paragraph (3) or (4) of subdivision (a) to apply to a customers residential service, the customer, or a member of the customers household, shall notify the utility that the prohibition applies. The customer, or a member of the customers household, shall verify the prohibitions applicability by submitting to the utility, within three weeks after their latest disconnection notice, a certification from a primary care provider that the discontinuation of residential service will be life threatening to, aggravate an existing medical condition of, or pose a serious threat to the health and safety of, a resident of the household where the residential service is provided. Upon receipt of the certification and while verifying the certification, the utility shall not disconnect the customers service or the service of a member of the customers household.(B) Each electrical corporation and gas corporation shall create a certification form that states the eligibility requirements that apply to this chapter and that does not request the identification of the specific category that applies.(2) Notwithstanding paragraph (1), the customer, or a member of the customers household, may automatically establish the applicability of the prohibitions described in paragraphs (3) or (4) of subdivision (a) without submitting a certification from a primary care provider if the customer, or member of the customers household, participates in the Medical Baseline Program.(e) If a customer, or a member of the customers household, is protected from disconnections pursuant to paragraph (5) of subdivision (a), the customer or member shall submit to the utility the certification of a primary care provider that the customer or member is pregnant or postpartum.(f) Local publicly owned electric or gas utilities shall revise their policies that mitigate utility shutoffs for nonpayment to be at least as protective of the vulnerable customer groups listed in subdivision (a) as required by this section. If the local publicly owned electric or gas utility does not have an policy that mitigates shutoffs for nonpayment for a vulnerable customer group listed in subdivision (a), the local publicly owned electric or gas utility shall establish a policy for that vulnerable customer group as required by this section.8453. (a) Each utility shall notify its residential customers of the prohibitions described in subdivisions (a) and (b) of Section 8452 by doing all of the following:(1) Posting the prohibitions in a publicly available location on the utilitys internet website, if the utility has an internet website.(2) Providing the prohibitions, in writing, to the utilitys residential customers at least twice per year, including before the onset of the summer and winter seasons.(3) Including the prohibitions on each residential customers utility bill.(4) Including the prohibitions on each new residential customers first utility bill.(b) All written notices required pursuant to subdivision (a) shall be provided in English, the languages listed in Section 1632 of the Civil Code, and any other language spoken by 10 percent or more of the customers in the utilitys service area.(c) Each utility that has an internet website shall create an online reporting system available through its internet website that enables its residential customers to report when their residential service has been disconnected in violation of subdivision (a) or (b) of Section 8452. The utility shall promptly respond to reports filed through its online reporting system and shall disclose a violation to the commission.8454. (a) A utility shall offer a residential customer who meets the requirements of subdivision (a) or (b) of Section 8452 a payment plan for the customers electricity or gas service that is provided by the utility, including a percentage of income payment plan, as authorized by the commission in commission Decision 21-10-012 (October 11, 2021), Decision Authorizing Percentage of Income Payment Plan Pilot Programs, in which customers are subject to a monthly bill cap set at a percentage of household income not to exceed 4 percent of household income or one-twelfth of the combined amount of the customers electricity and gas bills immediately before the customers enrollment in the payment plan required to be offered by the utility pursuant to this section, whichever is lower.(b) A residential customer subject to the payment plan shall not be financially responsible for any costs of providing electrical service or gas service exceeding the customers payment plan amount.(c) A utility subject to the disconnection prohibition described in Section 8452 shall be subject to both of the following provisions:(1) The utility shall not disconnect a residential customer described in subdivision (a) or (b) of Section 8452 due to lack of participation in a payment plan described in subdivision (a).(2) The utility may report to a credit reporting agency that a customers outstanding balances are delinquent only if the customer declines to participate in a payment plan or fails to pay in full the amounts due under a payment plan on three separate occasions during the terms of a payment plan described in this section or another payment plan offered by the utility.8455. (a) The commission shall establish a citation program to impose a penalty on an electrical corporation or gas corporation that violates Section 8452.(b) (1) The commission may bring an action in state court for equitable relief regarding an electrical corporations or gas corporations use of a method, act, or practice inconsistent with this chapter.(2) A customer, or a member of the customers household, may bring an action in state court for equitable relief regarding a utilitys or community choice aggregators use of a method, act, or practice inconsistent with this chapter.8456. (a) (1) Each utility providing electrical service or gas service, or both, to residential customers shall collect and submit to the commission monthly data on electrical and gas service terminations, reconnections, bill assistance and payment agreements, arrears, and created and broken payment plans.(2) When collecting and submitting to the commission the monthly data described in paragraph (1), those utilities shall do both of the following:(A) Use metrics that replicate the data provided in the monthly disconnect data reports authorized by the commission pursuant to commission Decision 18-12-013 (December 13, 2018), Decision Adopting Interim Rules to Reduce Residential Customer Disconnections for California-Jurisdictional Energy Utilities.(B) Aggregate electrical and gas service termination and reconnection data by ZIP Code, similar to the monthly disconnect data reports authorized by the commission pursuant to commission Decision 18-12-013 (December 13, 2018), Decision Adopting Interim Rules to Reduce Residential Customer Disconnections for California-Jurisdictional Energy Utilities.(b) The commission shall either include the data as monthly filings in commission Rulemaking 18-07-005 (July 12, 2018), Order Instituting Rulemaking to Consider New Approaches to Disconnections and Reconnections to Improve Energy Access and Contain Costs, or create a new page on the commissions internet website that clearly collects and presents all of the data submitted to the commission pursuant to this section.8457. (a) This chapter does not apply to utility actions related to wildfire prevention or other safety measures, including public safety power shutoffs or deenergization events.(b) This chapter does not apply to unintentional service disruptions or outages.SEC. 13.SEC. 12. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act or because costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution. |
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| 1 | + | CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Senate Bill No. 332Introduced by Senator WahabFebruary 12, 2025 An act to add Chapter 3.5 (commencing with Section 25250) to Division 15 of the Public Resources Code, to amend Sections 748.5, 3289, 3292, and 8388.5 of, to add Sections 706.5, 748.3, 8386.7, and 8388.6 to, and to add Chapter 10 (commencing with Section 8450) to Division 4.1 of, the Public Utilities Code, relating to energy.LEGISLATIVE COUNSEL'S DIGESTSB 332, as introduced, Wahab. Investor-Owned Utilities Accountability Act.(1) Existing law vests the State Energy Resources Conservation and Development Commission (Energy Commission) with various responsibilities for developing and implementing the states energy policies.This bill would require the Energy Commission, in coordination with the public advisor and the Public Utilities Commission (PUC), on or before March 31, 2026, to issue a request for proposals for a team to develop a study. The bill would require the study to (1) conduct a historical energy justice assessment of the investor-owned utilitys (IOU) operations and impacts, (2) complete a comparative analysis of the benefits and challenges of transitioning the IOUs to a successor entity in order to identify a recommended model, and, (3) if the study finds that it is in the best long-term interests of the people and ecologies of California to transition away from an investor-owned utility model, create a justice-centered implementation plan for managing the transition. The bill would require the Energy Commission, on or before June 30, 2026, to select the study team that is awarded the contract. The bill would require the Energy Commission to hold a public proceeding and submit a report of the study teams findings and recommendations to the Legislature no later than 24 months after selecting the study team for the feasibility portion of the study, and no later than 36 months after selecting the study team for the implementation plan portion of the study, as specified.This bill would require the Energy Commission to require the study team to select and convene an advisory council by December 31, 2026, to participate in the study of the vision for a new energy system, as provided. Upon completion of the first 2 study components, the bill would require the study team, in consultation with the advisory council, to provide a recommendation for a particular successor entity type to the Energy Commission, as provided. The bill would require the Energy Commission to vote to approve the study and recommended successor entity on or before September 30, 2028. Upon approval by the Energy Commission, the bill would require the study team to begin work to create a justice-centered implementation plan. The bill would require the Energy Commission to vote to approve the implementation plan no later than October 31, 2029.(2) Existing law vests the PUC with regulatory authority over public utilities, including electrical corporations and gas corporations, while local publicly owned utilities are under the direction of their governing boards. Existing law prohibits an electrical corporation, gas corporation, or water corporation from terminating a customers residential service for nonpayment of a delinquent account in certain circumstances, including, among other circumstances, unless the corporation first gives notice to the customer of the delinquency and impending termination, during the pendency of an investigation by the corporation of the customers dispute or complaint, or when the customer has been granted an extension of the period for payment of a bill.This bill would, among other things, prohibit a utility, including an electrical corporation, local publicly owned electric utility, gas corporation, and local publicly owned gas utility, from disconnecting a customers residential service for nonpayment if the customer has a household income at or below 200% of the federal poverty line. The bill would prohibit a utility from disconnecting a customers residential service for nonpayment if the customers household is the residence of certain persons, including, among other persons, a person who is pregnant or 0 to 12 weeks postpartum. The bill would require the commission to establish a citation program to impose a penalty on an electrical corporation or gas corporation that violates the above-described prohibitions. The bill would also authorize the commission, a customer, or a member of the customers household to bring an action in state court for equitable relief regarding a utilitys or community choice aggregators use of any method, act, or practice inconsistent with the above-described provisions.This bill would require a utility to offer a residential customer who meets the above-described requirements a payment plan for the customers electrical and gas service that includes a percentage of income payment plan, as specified. The bill would require each utility providing electrical service or gas service, or both, to residential customers to collect and submit to the commission monthly data on electrical and gas service terminations, reconnections, bill assistance and payment agreements, arrears, and created and broken payment plans, as provided.(3) Existing law prohibits an electrical corporation from recovering from ratepayers an annual salary, bonus, benefit, or other consideration of any value paid to an officer of the electrical corporation, and requires that compensation to instead be funded solely by shareholders of the electrical corporation.This bill would require each electrical corporation, on or before April 1, 2026, to submit a proposed executive compensation structure to the PUC that is structured to promote safety as a priority and to ensure public safety through performance metrics, as provided.(4) Existing law authorizes the PUC to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable.This bill would prohibit, for proposed rate increases subject to PUC approval and a finding that the new rate is just and reasonable, an electrical corporation from proposing a compounded annual rate increase on residential customers above the increase in the Consumer Price Index. The bill would prohibit, for proposed rate increases not subject to PUC approval and a finding that the new rate is just and reasonable, an electrical corporation from proposing more than one rate increase per year, as provided.(5) The California Global Warming Solutions Act of 2006 establishes the State Air Resources Board as the state agency responsible for monitoring and regulating sources emitting greenhouse gases. The act requires the state board to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the statewide greenhouse gas emissions limit, as defined, no later than December 31, 2030. The act requires the state board to adopt rules and regulations in an open public process to achieve the maximum technologically feasible and cost-effective greenhouse gas emission reductions. The state board is authorized to include market-based compliance mechanisms to comply with the regulations. The implementing regulations adopted by the state board provide for the direct allocation of greenhouse gas allowances to electrical corporations pursuant to a market-based compliance mechanism.Existing law authorizes the PUC to allocate 15% of the revenues received by the electrical corporations from that allocation of allowances for clean energy and energy efficiency projects established pursuant to statute that are administered by electrical corporations. Existing law requires the PUC to direct the balance of the revenues to be credited directly to the residential, small business, and emissions-intensive trade-exposed retail customers of the electrical corporations, as specified.Beginning with the fiscal year commencing July 1, 2026, and ending with the fiscal year ending June 30, 2036, this bill would require the PUC to annually allocate $100,000,000 of the revenues received by the electrical corporations from that allocation of greenhouse gas allowances to the Transformative Climate Communities Program and to the Community Resilience Center Program, as specified. The bill would require those allocations for the Transformative Climate Communities Program and Community Resilience Center Program to benefit disadvantaged communities in census tracts that are the most vulnerable to climate disaster, as specified.(6) Existing law establishes the Wildfire Fund to pay eligible claims arising from a covered wildfire, as provided. Existing law requires the PUC to initiate a rulemaking proceeding to consider using its existing authority to require certain electrical corporations to collect a nonbypassable charge from its ratepayers to support the Wildfire Fund, and requires the PUC to direct those electrical corporations to collect that charge if the PUC determines that the imposition of the charge is just and reasonable and that it is an appropriate exercise of its authority, as specified.This bill would require the PUC to revise the above-described rulemaking proceeding to reduce the charge imposed on ratepayers to an amount equal to 5% of the costs to support the fund, and require each electrical corporation to contribute the remaining 95% of the costs to support the fund.Existing law establishes procedures under which electrical corporations are required to reimburse the Wildfire Fund for amounts disallowed by the PUC for recovery from ratepayers. Existing law requires an electrical corporation to reimburse the fund for the full amount of costs and expenses the PUC determined were disallowed, except as provided. Under existing law those exceptions do not apply if the administrator determines that the electrical corporations actions or inactions that resulted in the covered wildfire constituted conscious or willful disregard of the rights and safety of others.This bill would provide that, for those purposes, evidence that an electrical corporations action were prudent includes common sense best practices such as conducting annual audits and replacing equipment that has outlived its usable life and deenergizing the electrical grid under threatening conditions.(7) Existing law requires each electrical corporation to construct, maintain, and operate its electrical lines and equipment in a manner that will minimize the risk of catastrophic wildfire posed by those electrical lines and equipment.This bill would require each electrical corporation to annually contract with an independent and reputable third party to audit all of the electrical corporations equipment and electrical lines and identify any equipment or electrical lines that have outlived their useful life. The bill would require the audit to be completed on or before June 30, 2026, and by June 30 of each year thereafter and submitted to the PUC on or before August 31, of each year. The bill would require an electrical corporation to replace any equipment or electrical lines identified by the third-party auditor that are located in a high fire risk area within 5 years, as provided. The bill would require the PUC to assess fines on an electrical corporation that fails to comply with these provisions, as specified. (8) Existing law requires the PUC to establish an expedited utility distribution infrastructure undergrounding program and provides that only large electrical corporations may participate in the program.This bill would instead require all large electrical corporations to participate in the program. The bill would also require an electrical corporation, after an emergency or disaster in which its electrical infrastructure was destroyed, to rebuild the destroyed electrical infrastructure using undergrounding methods, to the extent applicable. The bill would prohibit the cost of undergrounding the electrical infrastructure from being recovered from ratepayers.(9) Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.Because certain provisions of this bill would be part of the act and a violation of a commission action implementing the bills requirements would be a crime, the bill would impose a state-mandated local program.In addition, to the extent the bill would impose new requirements on local publicly owned utilities, the bill would impose a state-mandated local program.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for specified reasons.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill TextThe people of the State of California do enact as follows:SECTION 1. This act shall be known, and may be cited, as the Investor-Owned Utilities Accountability Act.SEC. 2. The Legislature finds and declares all of the following:(a) Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), San Diego Gas and Electric Company (SDG&E), and SoCalGas, which have collectively exercised their monopoly over California ratepayers for over 100 years, have lost the trust of the people of California due to their crushingly high rates, exorbitant payouts to executives and shareholders, reckless endangerment of life and property, and excessive spending with the goal of generating profits rather than providing an essential service.(b) Rates are higher in investor-owned utility (IOU) service territories across California than in not-for-profit utilities, including municipal utilities, rural electric cooperatives, and tribal utilities, which has resulted in working class and low-income people paying higher rates. On average, California IOU electricity rates are more than 50 percent higher than rates charged by publicly owned utilities. For IOU customers in California, rates have increased nearly 50 percent over the past three years.(c) Under the current system, most distribution and transmission infrastructure is financed by IOUs and paid for by utility ratepayers. Ratepayers also pay for a rate of return for the IOUs for each project, which can average close to 10 percent. This guaranteed return on investment rate creates a significant and increasingly unsustainable burden on ratepayers as more unnecessary transmission lines are constructed. This can result in unnecessary rate hikes for consumers, as capital expenses can be overestimated and overspent to increase profits. As an example, in the 2023 General Rate Case, PG&E admitted that they overestimated the actual cost of infrastructure needed by $3 billion. Despite electricity demand remaining stable, executive compensation, infrastructure spending, and customer rates continue to increase. While utilities submit new rate increase proposals on a roughly three- to four-year cycle to the Public Utilities Commission, they can also submit annual increases and emergency supplements. The compounding effect and increased frequency of these rate increases, largely related to wildfire emergencies, have unfairly burdened California residents. Specifically, from January 2021 to October 2024, inclusive, PG&E residential rates increased by 56 percent, SCE rates increased by 48 percent, and SDG&E rates increased by 21 percent.(d) These increasing rate hikes and record profits are a function of the IOUs being unwilling to adequately serve their ratepayers through affordable utility rates. One in five households served by the states largest IOUs are in utility debt. From August 2022 to August 2024, inclusive, PG&E, SCE, and SDG&E also compensated their shareholders with $7.62 billion in dividends. During that period, the estimated cost to prevent all residential shutoffs for nonpayment was seventy-seven one hundredths of 1 percent of that compensation to shareholders.(e) The IOUs have caused some of Californias most destructive wildfires. PG&E is responsible for more than 30 wildfires since 2017 that have destroyed more than 23,000 homes and businesses and killed more than 100 people. These fires include the 2017 Tubbs Fire, the 2018 Camp Fire, the 2019 Kincade Fire, the 2020 Zogg Fire, and the 2021 Dixie Fire. SCE was found responsible for burning more than 385,000 acres, destroying thousands of structures, and causing five deaths in the 2017 Rye Fire, the 2017 Meyers Fire, the 2017 Liberty Fire, the 2017 Thomas Fire, and the 2018 Woolsey Fire. In 2007, SDG&E caused three fires, the Witch Fire, the Guejito Fire, and the Rice Fire, burning 207,000 acres, killing two people, destroying 1,141 homes. Assembly Bill 1054 (Chapter 79 of the Statutes of 2019) established a wildfire insurance fund of $21 billion, all passed onto ratepayer bills, directly and indirectly.(f) Past and present experience demonstrates that the IOUs prioritize profits over the safety and well-being of the ratepayers and residents of California, and thus, to support public necessity and public purpose, must be replaced with a well-researched and structured successor entity that focuses on the needs of ratepayers, workers, fire survivors, and community members instead of shareholders.(g) The State of California created the not-for-profit public benefit corporation, Golden State Energy, designated as a receiver for PG&Es assets, through passing Senate Bill 350 (Chapter 27 of the Statutes of 2020) for the purpose of owning, controlling, operating, or managing electrical and gas services for its ratepayers, for the benefit of all Californians if PG&E were to lose its business license in a six-step accountability process overseen by the Public Utilities Commission. At that time, PG&E was in bankruptcy due to an untenable amount of liabilities for wildfires caused by its equipment. Senate Bill 350 created a successor in name only and was never in a position to receive PG&E assets. This bill builds on Senate Bill 350 by authorizing an in-depth unbiased study by a neutral third party to assess the practical, financial, legal, regulatory, labor, and technical aspects of a smooth and just transition away from the IOU model to one that prioritizes the needs of the people and ecology of the State of California.SEC. 3. Chapter 3.5 (commencing with Section 25250) is added to Division 15 of the Public Resources Code, to read: CHAPTER 3.5. Investor-Owned Utility Transition Feasibility Study25250. For purposes of this chapter, the following definitions apply:(a) Clean energy investments, incentives, and ownership refers to the levels of private investment or public incentives in energy resources eligible under the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code), and the entities that provided the investment or incentives and own the resources.(b) Critical minerals means those minerals specified by the United States Geological Survey as essential to the economic or national security of the United States, have a supply chain that is vulnerable to disruption, and serve an essential function in the manufacturing of a product, the absence of which would have significant consequences for the economic or national security of the United States. Critical minerals do not include fuel minerals, water, ice, or snow, or common varieties of sand, gravel, stone, pumice, cinders, or clay.(c) Disadvantaged communities advisory group means the disadvantaged communities advisory group established pursuant to subdivision (g) of Section 400 of the Public Utilities Code.(d) Disadvantaged community means a community identified pursuant to Section 39711 of the Health and Safety Code.(e) Distributed energy resources means distributed renewable generation resources, energy efficiency, energy storage, electric vehicles, and demand response technologies.(f) Endangered species means a native species or subspecies of a bird, mammal, fish, amphibian, reptile, or plant that is in serious danger of becoming extinct throughout all, or a significant portion, of its range due to one or more causes, including loss of habitat, change in habitat, overexploitation, predation, competition, or disease.(g) Energy burden means the expense of energy expenditures relative to overall household income.(h) Energy justice means the goal of achieving equity in both the social and economic participation in the energy systems, while also remediating social, economic, and health burdens on those historically harmed by the energy system, including disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(i) Equity, just, and justice mean the goal of creating systems, organizations, and societies that are fair and just, recognizing where disadvantages and barriers exist, and allocating resources and support to ensure equal access and opportunity for all populations.(j) Investor-owned utilities or IOUs means all of the following:(1) Pacific Gas and Electric Company, PG&E Corporation, any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within Pacific Gas and Electric Companys service territory, and any successor to any of the foregoing.(2) Southern California Edison, SCE, any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within Southern California Edisons service territory, and any successor to any of the foregoing.(3) Southern California Gas, a subsidiary of Sempra, SoCal Gas, and any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of gas service within Southern California Gas service territory, and any successor to any of the foregoing.(4) San Diego Gas and Electric, a subsidiary of Sempra, SDG&E, and any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within San Diego Gas and Electrics service territory, and any successor to any of the foregoing.(k) Just transition means a framework for a fair shift to an economy that is ecologically sustainable, equitable, and just for all its members.(l) Low-income means at or below 80 percent of the state median income.(m) Microgrid means an interconnected system of loads and energy resources, including, but not limited to, distributed energy resources, energy storage, demand response tools, or other management, forecasting, and analytical tools, appropriately sized to meet customer needs, within a clearly defined electrical boundary that can act as a single, controllable entity, and can connect to, disconnect from, or run in parallel with larger portions of the electrical grid, or can be managed and isolated to withstand larger disturbances and maintain electrical supply to connected critical infrastructure.(n) Study team means one or more qualified organizations, public institutions, or consulting firms that is awarded the request for proposal to develop the study pursuant to Section 25251.(o) Successor entity means a public entity, public benefit corporation, or mutual benefit corporation.25251. (a) The commission, on or before March 31, 2026, based on the scoring evaluation developed and conducted by the Disadvantaged Communities Advisory Group, and in coordination with the public advisor and the Public Utilities Commission, shall issue a request for proposals for a team to develop a study to do all of the following:(1) Consistent with Section 25254, conduct a historical energy justice assessment of the IOUs operations and impacts on California residents, wildlife, and ecologies, with a focus on disadvantaged communities, low-income communities, andfederally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(2) Consistent with Section 25255, complete a comparative analysis of the benefits and challenges of transitioning the IOUs to a successor entity in order to identify a recommended model, assess the feasibility of transitioning the IOUs to a successor entity, and identify priority just design features for the successor entity, with the goal of serving the public interest and necessity of the people and ecologies of California.(3) Consistent with Section 25257, if the study, as approved by the commission, finds that it is in the best long-term interests of the people and ecologies of California to transition away from the investor-owned utility model, create a justice-centered implementation plan for managing the transition, including all appropriate mechanisms and any statutory changes that may be required. (b) The request for proposals shall seek applications that contain one or more organizations, public universities, or consultants with a demonstrated commitment to working with disadvantaged communities, and include partnership with the Disadvantaged Communities Advisory Group, and one or more community-based organizations that have supported the formation of Golden State Energy. (c) Organization qualifications shall include all of the following:(1) An eligible organization or consultant shall not have received more than one-half their income in the last three years from or for investor-owned utilities. An organization or consultant that has more than 10 percent of their work from any investor-owned utilities in California shall be required to set up appropriate safeguards to prevent conflicts of interest in the study analysis. An eligible institution, department, or principle investigator within a university shall not have received more than 10 percent of their funding in the past five years from investor owned utilities.(2) An eligible organization or consultant team shall demonstrate:(A) Through references from at least three jurisdictions, experience in policy, finance, grid design, and structural redesign work performed for jurisdictions with a population size of at least 1,000,000 people or a geographic area of 500 square miles.(B) Through case studies of prior work, demonstrated ability to fairly engage and integrate multiple stakeholder perspectives involved in or impacted by renewable energy generation, distribution, or transmission systems.(C) A clear record of research that indicates knowledge of, and engagement with, multiple utility ownership models, including both municipal and investor owned utilities.(D) A clear record of research that demonstrates an understanding of the energy justice and distributional impacts of current energy systems and protocols across the utility system.(d) On or before June 30, 2026, the commission, based on scoring developed and conducted by the Disadvantaged Communities Advisory Group, and with supporting resources and recommendations from the Public Utilities Commission, shall select the team with the highest score that meets the qualifications outlined in subdivision (c) and demonstrates their ability to meet study objectives outlined in subdivision (a) and Sections 25254, 25255, and 25257 as the study team.(e) The commission shall hold a public proceeding and submit a report of the study teams findings and recommendations, including any statutory changes that may be required, to the Legislature, in compliance with Section 9795 of the Government Code, no later than 24 months after selecting the study team for the feasibility portion of the study, and no later than 36 months after selecting the study team for the implementation plan portion of the study. 25252. (a) The commission shall require the study team to select and convene an advisory council, with recommendations from the Disadvantaged Communities Advisory Group, by December 31, 2026, to participate in the study of the vision for a new energy system as outlined in Section 25255. The advisory council shall review and provide recommendations on the initial scope of the study and implementation plan and on all preliminary and final drafts. Comments and recommendations from the advisory council that are not incorporated by the study team shall be included as an addendum to the study.(b) (1) The advisory council shall be drawn from diverse backgrounds to represent interests of disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes throughout the IOUs service territories and represent geographically diverse areas of California and consist of at least 13 members who collectively represent the following lived experiences and subject matter expertise:(A) Tribal utilities.(B) Community choice aggregation.(C) Low-income residential ratepayer advocacy.(D) Equitable rate design and utility cost allocation.(E) Environmental justice, energy justice, or utility justice issues.(F) Racial and economic justice.(G) Survivors of IOU-caused wildfires.(H) Disability rights.(I) Federally recognized California Indian tribes.(J) Nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(K) Labor unions representing utility workers.(L) Inclusive workforce development.(M) Deep knowledge of distributed energy resources and grid architecture.(2) Members of the advisory council shall not be current or previous employees, or current contractors, of an electrical corporation, as defined in Section 218 of the Public Utilities Code.(c) Members of the advisory council shall be entitled to per diem compensation and reimbursement of expenses for meetings, upon appropriation by the Legislature.25253. (a) For purposes of carrying out this chapter, the study team may do all of the following:(1) Consult with any stakeholders as needed or appropriate.(2) Request the production of books, records, correspondence, figures, charts, memoranda, papers, and documents, and other relevant materials of any nature from the commission, the Public Utilities Commission, and the IOUs.(b) For purposes of carrying out this chapter, the study team shall do all of the following:(1) Collaborate with the advisory council and the commission, through the Public Advocates Office, to host a minimum of four public hearings in geographically diverse regions of the IOUs service territories and during a variety of times to accommodate different work schedules.(2) In its specific findings, clarify all assumptions for findings and include citations to the original data or source for those assumptions.(c) A member of the study team may, if authorized by the prime consultant, take any action that the overall consultant team is authorized to take pursuant to this section.(d) On behalf of the commission, the study team may acquire directly from the head of a state agency available information that they consider useful in fulfilling their deliverables. All state agencies shall cooperate with the commission on behalf of the study team with respect to such information and shall furnish all information requested by the study team to the extent permitted by law. The study team shall keep confidential any information received from a state agency that is confidential or exempt from the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) or subject to a nondisclosure agreement.(e) As consultants to the commission, the study team shall have the administrative, technical, and legal assistance of the Department of Justice, the commission, the Public Utilities Commission, and the State Air Resources Board.(f) The study team may procure supplies and services by contract in accordance with applicable laws and rules.(g) The study team may enter into subcontracts for purposes of conducting research or surveys, preparing reports, and performing other activities necessary for the fulfillment of their research deliverables with state departments, agencies, and other instrumentalities of the state, federal departments, agencies, and other federal instrumentalities, and private entities. Subcontractors shall also meet the qualifications outlined in paragraph (1) of subdivision (c) of Section 25251.(h) For purposes of carrying out this chapter, the commission, through the Public Advocates Office, may do all of the following in service of completion of deliverables for the contract:(1) Hold hearings and sit and act at any time and location in California.(2) Consult with any issueholders as deemed necessary to achieve the objectives of this chapter.(3) Request the attendance and testimony of witnesses.(4) Seek an order from a superior court compelling testimony or compliance with a subpoena, including from the IOUs executive leadership.25254. The historical energy justice assessment component of the study described in Section 25251 shall assess the IOUs historical and ongoing operations and impacts on California residents, wildlife, and ecologies, with a focus on impacts to disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission, broken down by ZIP Code, income, race, age, and other relevant demographics. The assessment shall include, but is not limited to, all of the following:(a) An assessment and quantification of the distribution of health harms and reduced lifespans resulting from wildfires, polluting energy generation facilities, and infrastructure.(b) An assessment and quantification of the economic distribution of clean energy investments, incentives, and ownership.(c) An assessment of the impacts of rate increases and the extent and distribution of energy burdens based on historical rates.(d) An assessment of the distribution and quantity of utility disconnections, including disconnections due to lack of payment and public safety power shutoffs.(e) An assessment of the emotional, economic, ecological, and safety-related impacts from disasters caused by the IOUs, including, but not limited to, wildfires, pipeline explosions, power shutoffs, deenergization events, and the potential health impacts and lifespan reductions from those impacts.(f) An assessment of the pollution and other ecological impacts from energy generating infrastructure and the potential health impacts and lifespan reductions from those impacts.(g) An assessment of the extent and distribution of delayed or lack of provision of electricity and gas service and hookups.(h) An assessment of the liability incurred by, and during, the IOUs ownership, including specifying the portion of risks and liabilities likely to be transferred to a successor entity.(i) A quantification of the IOUs current tax obligations to the state.(j) An assessment of lands taken or received that were previously owned and stewarded by federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(k) An assessment of the IOUs historical and ongoing impacts on California wildlife, endangered species, and ecologies.(l) An assessment and audit of the IOUs capital expenditures and operating expenses to identify the cost-effectiveness of infrastructure investments.25255. (a) The comparative analysis of the benefits and challenges component of transitioning the IOUs to a recommended successor entity portion of the study described in paragraph (2) of subdivision (a) of Section 25251 shall provide a comparative assessment of transitioning the IOUs to either a public entity, nonprofit public benefit corporation, or mutual benefit corporation, assess the overall feasibility of transitioning the IOUs to a successor entity, and identify priority energy just design features for a successor entity.(b) The comparative analysis shall comprise all of the following:(1) An assessment of all legal, economic, financial, governance, and other relevant aspects of the ownership types required to successfully transition the assets and operations of the IOUs to a nonprofit public benefit corporation, such as Golden State Energy, a mutual benefit corporation, or a publicly owned electric utility, which may be in existence or yet to be formed.(2) An assessment of whether there are any structural limitations or advantages of each ownership type relative to the successor entitys ability to serve the people of California and to achieving the following policy objectives:(A) A demonstrable reduction in electricity costs for customers over a 30-year period, with a focus on increasing energy bill affordability for low-income communities, disadvantaged communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes, ensuring electricity costs are less than 3 percent of household income.(B) Increased opportunity for labor benefits through maintaining pensions and increasing benefits for workers, increasing good union jobs and inclusive workforce development in the region.(C) Increased public accountability, trust, and transparency in governing structures, financial spending, maintenance, and infrastructure decisions.(c) The feasibility assessment shall include all of the following:(1) Identification of legal and regulatory issues, and recommendations for addressing these issues, that might arise from transitioning the assets and operations of the IOUs and their respective operations as described in this chapter, and post-transition, in order to do all of the following:(A) Maintain the authority for the establishment of municipal utility districts, rural electric cooperatives, and tribal utilities, and ensure the successor entity cooperates with other public entities.(B) Safeguard or strengthen the worker and labor benefits, including union protections, during and after the transition period, and provide for workers rights and a just transition for workers impacted by the decommissioning of unsafe, polluting infrastructure.(C) By no later than 2032, safely decommission generation, transmission, and piping infrastructure transferred to the successor entity that is unsafe and polluting, prioritizing infrastructure that is causing disproportionate harms in disadvantaged communities, low-income communities, federally recognized California Indian tribes, or nonfederally recognized California Native American tribes.(D) Manage future wildfire liability.(E) Equitably decommission gas infrastructure and transition towards electrification, prioritizing the decommissioning of gas powerplants in disadvantaged communities and replacement with community-owned distributed energy resources without unduly burdening ratepayers, especially low-income or disadvantaged ratepayers, with associated costs.(2) A preliminary evaluation of the long-term costs and benefits over at least a 30-year horizon of a transfer in ownership to a successor entity, including an assumption for clean energy, electrification, and grid investments at a pace in accordance with state climate goals. This evaluation shall incorporate all of the following:(A) The potential for securitization of debt, including consideration of tax-exempt bonding for municipal utilities.(B) Consideration of the portion of utility capital expenses paid for by ratepayer contributions.(C) Application of all legally claimed depreciation of assets by the IOUs.(D) Equitable finance and revenue sources that may be available to the successor entity for its operational needs, including for purchase, maintenance, and upgrades, with information regarding all of the following:(i) Mechanisms to support the creditworthiness of the successor entity during the early years of operation.(ii) Access to bonds.(iii) Long-term opportunities for public financing.(iv) Ability to leverage federal funding in the form of elective pay, as outlined in the Inflation Reduction Act of 2022 (Public Law 117-169).(v) Options for revenue collected from rates and other financial resources.(3) A thorough consideration of which IOU assets should be prioritized for transfer and a timeline for those transfers, including all of the following:(A) The merits or risks of splitting ownership of the IOUs distribution infrastructure, transmission infrastructure, program administration, generation, and retail energy services.(B) The merits or risks of splitting ownership of the IOUs electrical and gas infrastructure.(C) The merits or risks of splitting ownership by geographic territory.(D) A full consideration of which assets to prioritize for transfer and a timeline for those transfers, including consideration of grid architectures that maximize distributed energy resources and future needs for distribution system operator infrastructure.(E) An evaluation of potential benefits, if any, that may be realized by separating the ownership and operation of the electrical distribution system for future distribution system operator models.(d) The identification of just design features for a successor entity and the mechanisms to realize them shall include, but not be limited to, all of the following:(1) The acknowledgment, rectification, and repair of prior harms, as found in the historical energy justice assessment pursuant to Section 25254.(2) Increasing social equity, electrical system reliability and performance, ecological sustainability, and climate resilience, including the ability to adapt to adverse climate-related weather disasters and other economic, social, and infrastructural crises.(3) Minimizing environmental health harms in the region and in homes.(4) Enhancing stewardship of finite resources and fragile ecologies through reducing the need for future large scale buildout, land clearing, or installation of ecologically disruptive energy generation, transmission, and distribution assets, and minimizing extraction of critical minerals.(5) Focusing on disadvantaged communities, low-income communities, federally recognized California Indian tribes, and nonfederally recognized California Native American tribes in decisionmaking processes.(6) Creating innovative participatory governance and accountability structures that enable community members, including low-income members and users with disabilities, to meaningfully impact the priorities of the successor entity.(7) Adopting mechanisms for sustained public engagement and transparency that holds the successor entity accountable to its mission to serve the communitys well-being.(8) Creating alternative mechanisms to utility disconnections to cover nonpayment by customers.(9) Including nonenergy impacts, social costs and benefits, health impacts, and more equitable climate outcomes in evaluating cost-effectiveness and decisionmaking.(10) Creating governance of the successor entity in a manner that maximizes public participation and energy democracy, including all of the following:(A) Whether members of the board of directors of the successor entity should be appointed pursuant to Part 2 (commencing with Section 3420) of Division 1.7 of the Public Utilities Code, elected by the customers of the successor entity, or a combination of appointees and elected members, and what type of expertise or experience should be represented.(B) Term limits for members of the board of directors.(C) Size and representation of the board of directors.(D) Involvement of, and robust funding of, technical assistance mechanisms to support community-based organizations in contributing to the decisions of the board of directors.(E) Adequate full-time staffing needs for the board of directors.(11) Requirements on the operations of the successor entity, including on all of the following:(A) Data collection by the successor entity and the public availability of collected data.(B) Public engagement and transparency, including all of the following:(i) Public engagement timelines and processes for rate cases, budget planning, and other policy and program approvals.(ii) Public meetings, notices, and comment periods.(iii) Relationships with local government, including reporting and communication requirements on projects undertaken by the successor entity with defined local economic benefits.25256. (a) Upon completion of the study components described in Sections 25254 and 25255, the study team, in consultation with the advisory council, consistent with Section 25252, shall recommend a particular successor entity ownership type to the commission for further feasibility review and implementation considerations.(b) On or before September 30, 2028, the commission, through a public process, shall vote to approve the study and recommended a particular successor entity ownership type based on a rubric comparing each of the successor entity ownership types to the incumbent IOU model using the following criteria:(1) Long-term affordability for the state and for ratepayers.(2) Safety.(3) Reliability.(4) Climate resilience.(5) Local economic benefits.(6) Health impacts.(7) Energy justice. 25257. (a) If the study, as approved by the commission, finds that it is in the best long-term interests of the people and ecologies of California to transition away from the investor-owned utility model, the study team shall begin work to create a justice-centered implementation plan, as described in paragraph (3) of subdivision (a) of Section 25251, to outline a timeline and transition process to the successor entity, including recommendations for which branches of government or agencies should be responsible and coordinate with which portions of the public to ensure the transition fairly minimizes burdens and unintended consequences and fairly maximizes benefits in service of the public interest and necessity.(b) The implementation plan shall identify all appropriate implementation mechanisms, including statutory changes that may be required, recommendations for specific bylaws, operating procedures, governance structures, or otherwise to ensure the successor entity is structured, operationalized, and has the proper authority and mandate to ensure more just outcomes, based in part on findings pursuant to Sections 25254 and 25255.(c) The implementation plan shall additionally do all of the following:(1) Recommend mechanisms to fairly set the acquisition cost and valuation in as legally defensible and timely manner as possible, with the goal of avoiding lengthy periods of litigation over the acquisition cost.(2) Recommend an appropriate regulatory structure to clearly delineate the relationship between the Public Utilities Commission and the successor entity, including consideration of an independent oversight body for the successor entity.(3) Provide for community benefit agreements and other local economic benefit and cost savings to the maximum extent possible for new infrastructure investments and maintenance, prioritizing clean distributed energy resources.(d) The commission, through a public process, shall vote to approve the implementation plan on or before October 31, 2029.SEC. 4. Section 706.5 is added to the Public Utilities Code, to read:706.5. (a) On or before April 1, 2026, each electrical corporation shall submit a proposed executive compensation structure to the commission that is structured to promote safety as a priority and to ensure public safety through performance metrics.(b) The performance metrics shall include, but not be limited to, all of the following:(1) Successful completion of vegetation management and wildfire mitigation plans.(2) Decommissioning risky electrical lines.(3) Building self-generation supported microgrids throughout the state, including in rural and remote areas of the state.(c) The commission shall approve the compensation structure if it meets the requirements of subdivision (b).SEC. 5. Section 748.3 is added to the Public Utilities Code, to read:748.3. (a) For a proposed rate increase subject to commission approval and a finding that the new rate is just and reasonable, an electrical corporation shall not propose a compounded annual rate increase on residential customers above the increase in the Consumer Price Index.(b) For proposed rate increases not subject to commission approval and a finding that the new rate is just and reasonable, an electrical corporation shall not propose more than one rate increase per year, and the rate increase shall not apply to California Alternate Rates for Energy program or Family Electric Rate Assistance program customers.(c) For purposes of this section, Consumer Price Index means the greater of the Consumer Price Index for the West Region, the Consumer Price Index for major cities, or the United States Consumer Price Index.SEC. 6. Section 748.5 of the Public Utilities Code is amended to read:748.5. (a) Except as provided in subdivision (c), subdivisions (c) and (d), the commission shall require revenues, including any accrued interest, received by an electrical corporation as a result of the direct allocation of greenhouse gas allowances to electric utilities pursuant to subdivision (b) of Section 95890 of Title 17 of the California Code of Regulations to be credited directly to the residential, small business, and emissions-intensive trade-exposed retail customers of the electrical corporation.(b) Not later than January 1, 2013, the commission shall require the adoption and implementation of a customer outreach plan for each electrical corporation, including, but not limited to, such measures as notices in bills and through media outlets, for purposes of obtaining the maximum feasible public awareness of the crediting of greenhouse gas allowance revenues. Costs associated with the implementation of this plan are subject to recovery in rates pursuant to Section 454.(c) The commission may allocate up to 15 percent of the revenues, including any accrued interest, received by an electrical corporation as a result of the direct allocation of greenhouse gas allowances to electrical distribution utilities pursuant to subdivision (b) of Section 95890 of Title 17 of the California Code of Regulations, for clean energy and energy efficiency projects established pursuant to statute that are administered by the electrical corporation, or a qualified third-party administrator as approved by the commission, and that are not otherwise funded by another funding source.(d) (1) Beginning with the fiscal year commencing July 1, 2026, and ending with the fiscal year ending June 30, 2036, from the revenues, including any accrued interest, received by an electrical corporation as a result of the direct allocation of greenhouse gas allowances to electrical distribution utilities pursuant to subdivision (b) of Section 95890 of Title 17 of the California Code of Regulations, the commission shall annually allocate one hundred million dollars ($100,000,000) to the Transformative Climate Communities Program (Part 4 (commencing with Section 75240) of Division 44 of the Public Resources Code) and annually allocate one hundred million dollars ($100,000,000) to the Community Resilience Center Program (Part 5 (commencing with Section 75250) of Division 44 of the Public Resources Code).(2) All moneys allocated for the Transformative Climate Communities Program and Community Resilience Center Program pursuant to this subdivision shall benefit disadvantaged communities in census tracts that are the most vulnerable to climate disaster, including, high wildfire risk areas and areas with power shutoff, flooding, and climate vulnerabilities.SEC. 7. Section 3289 of the Public Utilities Code is amended to read:3289. (a) (1) No later than July 26, 2019, the commission shall initiate a rulemaking proceeding to consider using its authority pursuant to Section 701 to require each electrical corporation, except a regional electrical corporation that chooses not to participate in any fund pursuant to Chapter 3 (commencing with Section 3291), to collect a nonbypassable charge from ratepayers of the electrical corporation to support the fund, including the payment of any bonds issued pursuant to Division 28 (commencing with Section 80500) of the Water Code, as follows:(A) For a large electrical corporation, a charge in an amount sufficient to fund the revenue requirement, as established pursuant to Section 80524 of the Water Code.(B) For a regional electrical corporation, the amount equal to one-half cent per kilowatt-hour ($0.005/kWh).(2) If the commission determines that the imposition of the charge described in paragraph (1) is just and reasonable, and that it is appropriate to exercise its authority pursuant to Section 701 to do so, the commission shall direct each electrical corporation to impose and collect that charge commencing in the month immediately following the month in which the final imposition of the revenue requirement with respect to bonds previously issued pursuant to Division 27 (commencing with Section 80000) of the Water Code is made. The charge shall be collected in the same manner as that for the payments made to reimburse the Department of Water Resources pursuant to Division 27 (commencing with Section 80000) of the Water Code.(b) Notwithstanding any other law, no later than 90 days after the initiation of the rulemaking proceeding, the commission shall adopt a decision regarding the imposition of the charge.(c) (1) Notwithstanding Section 455.5 or 1708, or any other law, the commission shall not revise, amend, or otherwise modify a decision to impose a charge made pursuant to this section at any time before January 1, 2036.(2) Notwithstanding paragraph (1), the commission shall revise the decision adopted pursuant to subdivision (b) to reduce the charge imposed on ratepayers pursuant to subdivision (a) to an amount equal to 5 percent of the costs to support the fund, and require each electrical corporation to contribute the remaining 95 percent of the costs to support the fund.(d) If the administrator authorizes Golden State Energy to participate in the fund pursuant to subdivision (d) of Section 3292, Golden State Energys ratepayers shall be subject to the nonbypassable charge previously imposed by the commission pursuant to this section.SEC. 8. Section 3292 of the Public Utilities Code is amended to read:3292. (a) If, no later than July 27, 2019, each large electrical corporation not subject to an insolvency proceeding on July 12, 2019, notifies the commission of its commitment to provide the initial contribution and the annual contributions, and subsequently provides its initial contribution as set forth in paragraph (3) of subdivision (b), the fund shall be established to pay eligible claims as set forth in subdivision (f) and obtain reimbursement from electrical corporations as set forth in subdivision (h).(b) Except as provided in subdivision (d), to participate in the fund established pursuant to subdivision (a), an electrical corporation shall satisfy the following conditions by no later than June 30, 2020:(1) The electrical corporation is not, and has not been since July 12, 2019, the subject of an insolvency proceeding or on criminal probation unless the electrical corporation meets the following conditions:(A) The electrical corporations insolvency proceeding has been resolved pursuant to a plan or similar document not subject to a stay.(B) The bankruptcy court or a court of competent jurisdiction, in the insolvency proceeding, has determined that the resolution of the insolvency proceeding provides funding or establishes reserves for, provides for assumption of, or otherwise provides for satisfying any prepetition wildfire claims asserted against the electrical corporation in the insolvency proceeding in the amounts agreed upon in any pre-insolvency proceeding settlement agreements or any post-insolvency settlement agreements, authorized by the court through an estimation process or otherwise allowed by the court.(C) The commission has approved the reorganization plan and other documents resolving the insolvency proceeding, including the electrical corporations resulting governance structure as being acceptable in light of the electrical corporations safety history, criminal probation, recent financial condition, and other factors deemed relevant by the commission.(D) The commission has determined that the reorganization plan and other documents resolving the insolvency proceeding are (i) consistent with the states climate goals as required pursuant to the California Renewables Portfolio Standard Program and related procurement requirements of the state and (ii) neutral, on average, to the ratepayers of the electrical corporation.(E) The commission has determined that the reorganization plan and other documents resolving the insolvency proceeding recognize the contributions of ratepayers, if any, and compensate them accordingly through mechanisms approved by the commission, which may include sharing of value appreciation.(2) For a regional electrical corporation, it has voluntarily established a charge required by the commission pursuant to Section 3289. This charge shall be included on monthly bills for customers. Collections on that charge shall be remitted, on a monthly basis, to the administrator for deposit into the fund.(3) Except as provided in subdivision (e), the electrical corporation has provided its initial contribution to the fund no later than September 10, 2019. Initial contributions shall not be recovered from the ratepayers of an electrical corporation, except Golden State Energy.(c) Each participating electrical corporation shall make its annual contribution by January 1 of each calendar year, including, without limitation, any annual contributions for calendar years in which the electrical corporation, or another electrical corporation to which the electrical corporation is the successor, was not a participating electrical corporation. Annual contributions shall not be recovered from the ratepayers of an electrical corporation, except Golden State Energy.(d) (1) The administrator may, and in the case of Golden State Energy shall, authorize an electrical corporation that is formed after July 12, 2019, to participate in the fund if the administrator determines that the electrical corporation meets the requirements of this section. Authorization of an electrical corporation that is formed after July 12, 2019, shall be effective as of a date determined by the administrator and shall apply to covered wildfires after the date of authorization.(2) If Golden State Energy is the successor to Pacific Gas and Electric Company and Pacific Gas and Electric Company made its initial contribution and, if applicable, annual contributions to the fund, the administrator shall not require Golden State Energy to commit to making, or make, its own initial contribution, or annual contributions for a period for which Pacific Gas and Electric Company already made its annual contributions, in order to participate in the fund and the administrator shall authorize Golden State Energy to participate in the fund if Golden State Energy, within 15 days of closing of the acquisition of Pacific Gas and Electric Company, notifies the commission of its commitment to make annual contributions to the fund.(e) An electrical corporation that is the subject of an insolvency proceeding on July 12, 2019, that wishes to participate in the fund shall (1) no later than July 27, 2019, provide written notification to the commission of its election to participate in the fund, and (2) no later than September 10, 2019, obtain approval from the bankruptcy court or a court of competent jurisdiction of its determination to pay, and approval of its payment of, the initial contribution and, as they become due, annual contributions to the fund, provided that the contributions shall not be due to the fund until the date the electrical corporation exits the insolvency proceeding. The electrical corporation shall not be entitled to seek payments from the fund pursuant to subdivision (f) until it has funded its initial contribution and has met the other conditions provided in subdivision (b). Participation of an electrical corporation that is the subject of an insolvency proceeding that satisfies the requirements of this subdivision shall be effective as of July 12, 2019, and shall apply to covered wildfires, provided that the fund shall not pay more than 40 percent of the allowed amount of a claim arising between July 12, 2019, and the date the electrical corporation exits bankruptcy, with the balance of those claims being addressed through the insolvency proceeding.(f) (1) An electrical corporation meeting the applicable requirements of subdivision (b) may seek payment from the fund to satisfy settled or finally adjudicated eligible claims. Only eligible claims shall be made against or paid by the fund. In accordance with the procedures established by the administrator, the administrator shall review and approve any settlement of an eligible claim as being in the reasonable business judgment of the electrical corporation before releasing funds to the electrical corporation for payment. Settlements of subrogation claims that are less than or equal to 40 percent of total asserted claim value as determined by the administrator shall be paid unless the administrator finds that the exceptional facts and circumstances surrounding the underlying claim do not justify the electrical corporations exercise of such business judgment. To the extent approved by the administrator, a settlement shall not be subject to further review by the commission.(2) The administrator shall approve a settlement of an eligible claim that is a subrogation claim if the settlement exceeds 40 percent of the total asserted claim value, as determined by the administrator, and includes a full release of the balance of the asserted claim so long as the administrator finds that the electrical corporation exercised its reasonable business judgment in determining to settle for a higher percentage or on different terms based on a determination that the specific facts and circumstances surrounding the underlying claim justify a higher settlement percentage or different terms. A subrogation claim that is finally adjudicated shall be paid in the full judgment amount.(g) Except for Golden State Energy, all initial and annual contributions shall be excluded from the measurement of the authorized capital structure.(h) (1) Except as provided in paragraph (2), within six months after the commission adopts a decision in an application filed pursuant to Section 1701.8, the electrical corporation shall reimburse the fund for the full amount of costs and expenses the commission determined were disallowed pursuant to Section 1701.8.(2) (A) The obligation of an electrical corporation to reimburse the fund shall be the lesser amount of subparagraph (B) or (C).(B) The costs and expenses determined not to be just and reasonable pursuant to Section 1701.8.(C) The amount determined pursuant to clause (i) minus the amount determined pursuant to clause (ii).(i) (I) Except as specified in subclause (II), for each electrical corporation, 20 percent of the electrical corporations total transmission and distribution equity rate base, including, but not limited to, its Federal Energy Regulatory Commission (FERC) assets, as determined by the administrator for the calendar year in which the disallowance occurred.(II) For Golden State Energys first twelve months of participation in the fund, an amount equal to 20 percent of Pacific Gas and Electric Companys total transmission and distribution equity rate base, including, but not limited to, its Federal Energy Regulatory Commission assets, at the time of the closing of the acquisition of Pacific Gas and Electric Company, as determined by the commission. For Golden State Energys subsequent years of participation in the fund, an amount determined by the commission that is equivalent to the amount specified in subclause (I) for electrical corporations with an equity rate base.(ii) The sum of (I) the amounts actually reimbursed to the fund for costs and expenses that were determined not to be just and reasonable pursuant to Section 1701.8 during the measurement period, added to (II) the amount of any reimbursements to the fund owed by the electrical corporation for costs and expenses disallowed during the measurement period that have not yet been paid.(iii) For purposes of this subparagraph, measurement period means the period of three consecutive calendar years ending on December 31 of the year in which the calculation is being performed.(D) The administrator shall publish calculations of the amounts determined pursuant to subparagraphs (B) and (C) on or before January 1 of each calendar year for each electrical corporation.(E) Except as provided in paragraph (3), the electrical corporation shall not be required to reimburse the fund for any additional amounts in any three-calendar-year period.(F) The limitation set forth in this section shall apply only so long as the fund has not been terminated pursuant to subdivision (i).(3) Paragraph (2) does not apply under either of the following circumstances:(A) If the administrator determines that the electrical corporations actions or inactions that resulted in the covered wildfire constituted conscious or willful disregard of the rights and safety of others. For purposes of this subparagraph, evidence that the electrical corporations actions were prudent shall include common sense best practices such as conducting annual audits and replacing equipment that has outlived its usable life pursuant to Section 8386.7, and deenergizing the electrical grid under threatening conditions.(B) If the electrical corporation failed to maintain a valid safety certification on the date of the ignition.(i) (1) The administrator shall, to the extent practicable, manage the fund to prioritize the use of electrical corporation contributions before the use of ratepayer contributions.(2) The fund shall terminate when the administrator determines that the fund resources are exhausted, taking into account the amount of any unpaid liabilities including necessary reserves, any remaining unpaid annual contributions from participating electrical corporations, and the charges authorized pursuant to Section 3289. Upon the determination of the administrator that the fund shall be terminated, the administrator shall pay all remaining eligible claims and fund expenses, and liquidate any remaining assets. The remaining funds shall be transferred to the General Fund. It is the intent of the Legislature that any funds transferred to the General Fund pursuant to this paragraph shall be appropriated to support wildfire mitigation.(j) Notwithstanding subdivision (f), a regional electrical corporations access to the fund to pay eligible claims shall be limited to three times the sum of the regional electrical corporations initial contribution and any funded annual contributions per covered wildfire.SEC. 9. Section 8386.7 is added to the Public Utilities Code, to read:8386.7. (a) Each electrical corporation shall annually contract with an independent and reputable third party to audit all of the electrical corporations equipment and electrical lines and identify any equipment or electrical lines that have outlived their useable life. The audit shall be completed on or before June 30, 2026, and by June 30 of each year thereafter, and submitted to the commission on or before August 31 of each year.(b) (1) An electrical corporation shall replace equipment and electrical lines identified by the independent third-party auditor pursuant to an audit described in subdivision (a) that are located in a high fire risk area within five years of the audit.(2) Equipment and electrical lines that are replaced pursuant to paragraph (1) shall be undergrounded. An electrical corporation shall not pass on the cost of undergrounding equipment pursuant to this paragraph to the ratepayers unless the commission determines that the electrical corporations earnings before interest and taxes for the previous year, multiplied by five as a basis for potential earnings before interest and taxes for the next five years, cannot fund the undergrounding work, in which case the commission shall determine what the minimal passthrough to ratepayers may be.(3) If it is more cost effective and meets the overall electrical grid needs, an electrical corporation may install microgrid technology instead of replacing equipment and electrical lines pursuant to paragraph (1).(c) (1) The commission shall assess a fine on an electrical corporation that fails to comply with this section, as follows:(A) The commission shall assess a fine on an electrical corporation that fails to complete an annual audit pursuant to subdivision (a) in an amount equal to 1 percent of the electrical corporations gross revenue for the preceding year. For each subsequent year that an electrical corporation fails to complete an annual audit the fine amount shall be increased to an amount equal to 3 percent of the electrical corporations gross revenue for the preceding year.(B) The commission shall assess a fine on an electrical corporation that fails to replace equipment pursuant to subdivision (b). The fine shall be, at minimum, the estimated cost of the replacement plus 10 percent, as determined by the third-party auditor. (2) Fines collected pursuant to this subdivision shall be used to finance needed repairs. Any excess funds available after needed repairs may be transferred to a future maintenance and repair budget.SEC. 10. Section 8388.5 of the Public Utilities Code is amended to read:8388.5. (a) The commission shall establish an expedited utility distribution infrastructure undergrounding program consistent with this section.(b) Only a All large electrical corporation may corporations shall participate in the program.(c) In order to participate in the program, a large electrical corporation shall submit to the office a distribution infrastructure undergrounding plan that shall address or include, at minimum, all of the following components:(1) A 10-year plan for undergrounding distribution infrastructure.(2) Identification of the undergrounding projects that will be constructed as part of the program, including a means of prioritizing undergrounding projects based on wildfire risk reduction, public safety, cost efficiency, and reliability benefits. Only undergrounding projects located in tier 2 or 3 high fire-threat districts or rebuild areas may be considered and constructed as part of the program.(3) Timelines for the completion of identified and prioritized undergrounding projects, and unit cost targets and mileage completion targets for each year covered by the plan.(4) A comparison of undergrounding versus aboveground hardening of electrical infrastructure and wildfire mitigation for achieving comparable risk reduction, or any other alternative mitigation strategy, such as covered conductor and rapid earth fault current limiter devices, for those prioritized undergrounding projects, evaluating the scope, cost, extent, and risk reduction of each activity, separately and collectively, over the duration of the plan. The comparison shall emphasize risk reduction and include an analysis of the cost of each activity for reducing wildfire risk, separately and collectively, over the duration of the plan.(5) A plan for utility and contractor workforce development.(6) An evaluation of project costs, projected economic benefits over the life of the assets, and any cost containment assumptions, including the economies of scale necessary to reduce wildfire risk and mitigation costs and establish a sustainable supply chain.(d) Upon a large electrical corporation submitting a plan to the office, the office shall do both of the following:(1) Publish the plan for public comment.(2) Within nine months, review and approve or deny the plan. The office may only approve the plan if the large electrical corporation has shown that the plan will substantially increase electrical reliability by reducing the use of public safety power shutoffs, enhanced powerline safety settings, deenergization events, and any other outage programs, and substantially reduce the risk of wildfire. Before approving the plan, the office may require the large electrical corporation to modify the plan.(e) (1) Upon the office approving a plan pursuant to paragraph (2) of subdivision (d), the large electrical corporation shall, within 60 days, submit to the commission a copy of the plan and an application requesting review and conditional approval of the plans costs and including all of the following:(A) Any substantial improvements in safety risk and reduction in costs compared to other hardening and risk mitigation measures over the duration of the plan.(B) The cost targets, at a minimum, that result in feasible and attainable cost reductions as compared to the large electrical corporations historical undergrounding costs.(C) How the cost targets are expected to decline over time due to cost efficiencies and economies of scale.(D) A strategy for achieving cost reductions over time.(2) The assigned commissioner may waive the requirements of subdivisions (b), (d), (f), and (i) of Section 1701.3 for an application submitted to the commission pursuant to paragraph (1).(3) In reviewing an application submitted to the commission pursuant to paragraph (1), the commission shall consider not revisiting cost or mileage completion targets approved, or pending approval, in the electrical corporations general rate case or a commission-approved balancing account ratemaking mechanism for system hardening.(4) Upon the commission receiving an application pursuant to paragraph (1), the commission shall facilitate a public workshop for presentation of the plan and take public comment for at least 30 days.(5) On or before nine months, the commission shall review and approve or deny the application. Before approving the application, the commission may require the large electrical corporation to modify or modify and resubmit the application.(6) The commission shall consider continuing an existing commission-approved balancing account ratemaking mechanism for system hardening for the duration of a plan, as determined by the commission, and shall authorize recovery of recorded costs that are determined to be just and reasonable.(f) If the plan is approved by the office and commission, the large electrical corporation shall do all of the following:(1) Every six months, file a progress report with the office and the commission. The large electrical corporation and the office shall publish these progress reports on their internet websites.(2) Include ongoing work plans and progress in annual wildfire mitigation plan filings.(3) Hire an independent monitor, selected by the office, to review and assess the large electrical corporations compliance with its plan and submit a report with the office each December 1 over the course of the plan.(g) (1) In reviewing and assessing the large electrical corporations compliance with its plan pursuant to paragraph (3) of subdivision (f), the independent monitor shall assess whether the large electrical corporations progress on undergrounding work has been consistent with the objectives identified in its plan. The independent monitors report shall specify any failure, delays, or shortcomings of the large electrical corporation and provide recommendations for improvements to accomplish the objectives set forth in the plan.(2) The large electrical corporation shall have 180 days to correct and eliminate any deficiency specified in the independent monitors report.(3) On or before December 1 of each year the plan is in effect, the independent monitor shall submit the report to the office.(h) The office shall publish reports received pursuant to paragraph (3) of subdivision (g) on its internet website.(i) (1) The office shall consider the independent monitors report and whether the large electrical corporation has cured any deficiencies, and may recommend penalties to the commission.(2) The commission may assess penalties on a large electrical corporation that fails to substantially comply with a commission decision approving its plan.(j) Each large electrical corporation participating in the program shall apply for available federal, state, and other nonratepayer moneys throughout the duration of its approved undergrounding plan, and any moneys received as a result of those applications shall be used to reduce the programs costs on the large electrical corporations ratepayers.SEC. 11. Section 8388.6 is added to the Public Utilities Code, to read:8388.6. After an emergency or disaster in which an electrical corporations electrical infrastructure was destroyed, the electrical corporation shall rebuild the destroyed electrical infrastructure using undergrounding methods, to the extent applicable. The cost of undergrounding electrical infrastructure pursuant to this section shall not be recovered from ratepayers.SEC. 12. Chapter 10 (commencing with Section 8450) is added to Division 4.1 of the Public Utilities Code, to read: CHAPTER 10. Utility Service Disconnections8450. The Legislature finds and declares all of the following:(a) Access to electricity and heating services is a human right that no one should be deprived of due to an inability to pay.(b) Electricity is essential to the health, safety, and welfare of the people of this state and to the states economy.(c) It is the responsibility of state government to ensure that a reliable supply of electricity is maintained at a level consistent with the need for the electricity to protect public health and safety, promote the general welfare, and protect environmental quality.(d) Gas and electrical service shutoffs threaten the health of infants, children, the elderly, low-income families, communities of color, people for whom English is a second language, physically disabled persons, and persons with life-threatening medical conditions.(e) Section 779.3 of the Public Utilities Code prohibits a gas or electrical corporation from disconnecting service for nonpayment by a residential customer receiving a medical baseline allowance when the customer or a member of the customers household is under hospice care at home, depends upon life-support equipment, or has a life-threatening condition or illness.(f) Public Utilities Commission Decision 20-06-003 (June 16, 2020), Phase I Decision Adopting Rules and Policy Changes to Reduce Residential Customer Disconnections for the Larger California-Jurisdictional Energy Utilities, prohibits large investor-owned utilities from doing both of the following:(1) Disconnecting residential customers when temperatures above 100 degrees or below 32 degrees are forecasted based on a 72-hour look-ahead period.(2) Disconnecting residential customers who currently have Low-Income Home Energy Assistance Program pledges pending.(g) In response to the COVID-19 pandemic, Public Utilities Commission Resolution M-4842 (April 17, 2020), Emergency Authorization and Order Directing Utilities to Implement Emergency Customer Protections to Support California Customers During the COVID-19 Pandemic, required electrical and gas utilities to suspend disconnection for nonpayment, commonly known as the COVID-19 disconnection moratorium.(h) The COVID-19 disconnection moratorium ended in September 2021, but California investor-owned utilities began disconnecting their customers for nonpayment in August 2022.(i) From August 2022 to August 2024, Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas and Electric Company collectively disconnected their customers for nonpayment 412,787 times.(j) From August 2022 to August 2024, Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas and Electric Company also compensated their shareholders with $7,620,000,000 in dividends. During that period, the estimated cost to prevent all residential shutoffs for nonpayment was seventy-seven hundredths of 1 percent of that compensation to shareholders.8451. For purposes of this chapter, the following definitions apply:(a) Adult means a person 18 years of age or older.(b) Economic unit means all adults contributing to and sharing in the income and expenses of a household.(c) Electrical corporation has the same meaning as defined in Section 218.(d) Gas corporation has the same meaning as defined in Section 222.(e) Household means a residential address shared by a group of adults, including the utility customer, and children who are living together at that address as one economic unit. A household may contain related and unrelated persons. If an adult has no, or minimal, income and lives with an adult who provides financial support to that adult, both adults are part of the same household. A child under 18 years of age and living with a parent or guardian is part of the same household as the parent or guardian.(f) Local publicly owned electric utility has the same meaning as defined in Section 224.3.(g) Residential service means the provision of electrical or natural gas service to a residential connection at a single-family residence, a multifamily residence, a mobilehome, including, but not limited to, a mobilehome in a mobilehome park, or farmworker housing.(h) Utility means an electrical corporation, local publicly owned electric utility, gas corporation, or local publicly owned gas utility.8452. (a) A utility shall not disconnect a customers residential service for nonpayment if the customers household is the residence of any of the following persons:(1) A child five years of age or younger, regardless of the customers relationship with the child.(2) A person 65 years of age or older.(3) A person with a disability, consistent with subdivision (d).(4) A person with a medical condition, consistent with subdivision (d).(5) A person who is pregnant or 0 to 12 weeks postpartum, consistent with subdivision (e).(b) (1) A utility shall not disconnect a customers residential service for nonpayment if the customer has a household income at or below 200 percent of the federal poverty line.(2) For purposes of paragraph (1), a utility shall deem a residential customer to have a household income below 200 percent of the federal poverty line if any member of the household is a current recipient of a benefit or discount pursuant to one or more of the following programs, or if the customer declares that the households annual income is less than 200 percent of the federal poverty level:(A) The California Alternative Rates for Energy (CARE) program, as described in Section 739.1.(B) The CalWORKS program, as described in Chapter 2 (commencing with Section 11200) of Part 3 of Division 9 of the Welfare and Institutions Code.(C) CalFresh, as described in Section 18900.2 of the Welfare and Institutions Code.(D) General assistance, as described in Part 5 (commencing with Section 17000) of Division 9 of the Welfare and Institutions Code.(E) Medi-Cal, as described in Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code.(F) Federal Supplemental Security Income, as described in Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.).(G) The State Supplementary Payment Program, as described in Chapter 3 (commencing with Section 12000) of Part 3 of Division 9 of the Welfare and Institutions Code.(H) The California Special Supplemental Nutrition Program for Women, Infants, and Children, as described in Section 123280 of the Health and Safety Code.(c) On and after January 1, 2026, each electrical corporation and gas corporation shall automatically reconnect all households that are eligible for protection under subdivision (a) or (b) that had their residential service disconnected due to nonpayment.(d) (1) In order for the prohibition described in paragraph (3) or (4) of subdivision (a) to apply to a customers residential service, the customer, or a member of the customers household, shall notify the utility that the prohibition applies. The customer, or a member of the customers household, shall verify the prohibitions applicability by submitting to the utility, within three weeks after their latest disconnection notice, a certification from a primary care provider that the discontinuation of residential service will be life threatening to, aggravate an existing medical condition of, or pose a serious threat to the health and safety of, a resident of the household where the residential service is provided. Upon receipt of the certification and while verifying the certification, the utility shall not disconnect the customers service or the service of a member of the customers household.(2) Notwithstanding paragraph (1), the customer, or a member of the customers household, may automatically establish the applicability of the prohibitions described in paragraphs (3) or (4) of subdivision (a) without submitting a certification from a primary care provider if the customer, or member of the customers household, participates in the Medical Baseline Program.(e) If a customer, or a member of the customers household, is protected from disconnections pursuant to paragraph (5) of subdivision (a), the customer or member shall submit to the utility the certification of a primary care provider that the customer or member is pregnant or postpartum.8453. (a) Each utility shall notify its residential customers of the prohibitions described in subdivisions (a) and (b) of Section 8452 by doing all of the following:(1) Posting the prohibitions in a publicly available location on the utilitys internet website, if the utility has an internet website.(2) Providing the prohibitions, in writing, to the utilitys residential customers at least twice per year, including before the onset of the summer and winter seasons.(3) Including the prohibitions on each residential customers utility bill.(4) Including the prohibitions on each new residential customers first utility bill.(b) All written notices required pursuant to subdivision (a) shall be provided in English, the languages listed in Section 1632 of the Civil Code, and any other language spoken by 10 percent or more of the customers in the utilitys service area.(c) Each utility that has an internet website shall create an online reporting system available through its internet website that enables its residential customers to report when their residential service has been disconnected in violation of subdivision (a) or (b) of Section 8452. The utility shall promptly respond to reports filed through its online reporting system and shall disclose a violation to the commission.8454. (a) A utility shall offer a residential customer who meets the requirements of subdivision (a) or (b) of Section 8452 a payment plan for the customers electricity or gas service that is provided by the utility, including a percentage of income payment plan, as authorized by the commission in commission Decision 21-10-012 (October 11, 2021), Decision Authorizing Percentage of Income Payment Plan Pilot Programs, in which customers are subject to a monthly bill cap set at a percentage of household income not to exceed 4 percent of household income or one-twelfth of the combined amount of the customers electricity and gas bills immediately before the customers enrollment in the payment plan required to be offered by the utility pursuant to this section, whichever is lower.(b) A residential customer subject to the payment plan shall not be financially responsible for any costs of providing electrical service or gas service exceeding the customers payment plan amount.(c) A utility subject to the disconnection prohibition described in Section 8452 shall be subject to both of the following provisions:(1) The utility shall not disconnect a residential customer described in subdivision (a) or (b) of Section 8452 due to lack of participation in a payment plan described in subdivision (a).(2) The utility may report to a credit reporting agency that a customers outstanding balances are delinquent only if the customer declines to participate in a payment plan or fails to pay in full the amounts due under a payment plan on three separate occasions during the terms of a payment plan described in this section or another payment plan offered by the utility.8455. (a) The commission shall establish a citation program to impose a penalty on an electrical corporation or gas corporation that violates Section 8452.(b) (1) The commission may bring an action in state court for equitable relief regarding an electrical corporations or gas corporations use of a method, act, or practice inconsistent with this chapter.(2) A customer, or a member of the customers household, may bring an action in state court for equitable relief regarding a utilitys or community choice aggregators use of a method, act, or practice inconsistent with this chapter.8456. (a) (1) Each utility providing electrical service or gas service, or both, to residential customers shall collect and submit to the commission monthly data on electrical and gas service terminations, reconnections, bill assistance and payment agreements, arrears, and created and broken payment plans.(2) When collecting and submitting to the commission the monthly data described in paragraph (1), those utilities shall do both of the following:(A) Use metrics that replicate the data provided in the monthly disconnect data reports authorized by the commission pursuant to commission Decision 18-12-013 (December 13, 2018), Decision Adopting Interim Rules to Reduce Residential Customer Disconnections for California-Jurisdictional Energy Utilities.(B) Aggregate electrical and gas service termination and reconnection data by ZIP Code, similar to the monthly disconnect data reports authorized by the commission pursuant to commission Decision 18-12-013 (December 13, 2018), Decision Adopting Interim Rules to Reduce Residential Customer Disconnections for California-Jurisdictional Energy Utilities.(b) The commission shall either include the data as monthly filings in commission Rulemaking 18-07-005 (July 12, 2018), Order Instituting Rulemaking to Consider New Approaches to Disconnections and Reconnections to Improve Energy Access and Contain Costs, or create a new page on the commissions internet website that clearly collects and presents all of the data submitted to the commission pursuant to this section.8457. (a) This chapter does not apply to utility actions related to wildfire prevention or other safety measures, including public safety power shutoffs or deenergization events.(b) This chapter does not apply to unintentional service disruptions or outages.SEC. 13. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act or because costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution. |
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| 110 | | - | The people of the State of California do enact as follows:SECTION 1. This act shall be known, and may be cited, as the Investor-Owned Utilities Accountability Act.SEC. 2. The Legislature finds and declares all of the following:(a) Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), San Diego Gas and Electric Company (SDG&E), and SoCalGas, which have collectively exercised their monopoly over California ratepayers for over 100 years, have lost the trust of the people of California due to their crushingly high rates, exorbitant payouts to executives and shareholders, reckless endangerment of life and property, and excessive spending with the goal of generating profits rather than providing an essential service.(b) Rates are higher in investor-owned utility (IOU) service territories across California than in not-for-profit utilities, including municipal utilities, rural electric cooperatives, and tribal utilities, which has resulted in working class and low-income people paying higher rates. On average, California IOU electricity rates are more than 50 percent higher than rates charged by publicly owned utilities. For IOU customers in California, rates have increased nearly 50 percent over the past three years.(c) Under the current system, most distribution and transmission infrastructure is financed by IOUs and paid for by utility ratepayers. Ratepayers also pay for a rate of return for the IOUs for each project, which can average close to 10 percent. This guaranteed return on investment rate creates a significant and increasingly unsustainable burden on ratepayers as more unnecessary transmission lines are constructed. This can result in unnecessary rate hikes for consumers, as capital expenses can be overestimated and overspent to increase profits. As an example, in the 2023 General Rate Case, PG&E admitted that they overestimated the actual cost of infrastructure needed by $3 billion. Despite electricity demand remaining stable, executive compensation, infrastructure spending, and customer rates continue to increase. While utilities submit new rate increase proposals on a roughly three- to four-year cycle to the Public Utilities Commission, they can also submit annual increases and emergency supplements. The compounding effect and increased frequency of these rate increases, largely related to wildfire emergencies, have unfairly burdened California residents. Specifically, from January 2021 to October 2024, inclusive, PG&E residential rates increased by 56 percent, SCE rates increased by 48 percent, and SDG&E rates increased by 21 percent.(d) These increasing rate hikes and record profits are a function of the IOUs being unwilling to adequately serve their ratepayers through affordable utility rates. One in five households served by the states largest IOUs are in utility debt. From August 2022 to August 2024, inclusive, PG&E, SCE, and SDG&E also compensated their shareholders with $7.62 billion in dividends. During that period, the estimated cost to prevent all residential shutoffs for nonpayment was seventy-seven one hundredths of 1 percent of that compensation to shareholders.(e) The IOUs have caused some of Californias most destructive wildfires. PG&E is responsible for more than 30 wildfires since 2017 that have destroyed more than 23,000 homes and businesses and killed more than 100 people. These fires include the 2017 Tubbs Fire, the 2018 Camp Fire, the 2019 Kincade Fire, the 2020 Zogg Fire, and the 2021 Dixie Fire. SCE was found responsible for burning more than 385,000 acres, destroying thousands of structures, and causing five deaths in the 2017 Rye Fire, the 2017 Meyers Fire, the 2017 Liberty Fire, the 2017 Thomas Fire, and the 2018 Woolsey Fire. In 2007, SDG&E caused three fires, the Witch Fire, the Guejito Fire, and the Rice Fire, burning 207,000 acres, killing two people, destroying 1,141 homes. Assembly Bill 1054 (Chapter 79 of the Statutes of 2019) established a wildfire insurance fund of $21 billion, all passed onto ratepayer bills, directly and indirectly.(f) Past and present experience demonstrates that the IOUs prioritize profits over the safety and well-being of the ratepayers and residents of California, and thus, to support public necessity and public purpose, must be replaced with a well-researched and structured successor entity that focuses on the needs of ratepayers, workers, fire survivors, and community members instead of shareholders.(g) The State of California created the not-for-profit public benefit corporation, Golden State Energy, designated as a receiver for PG&Es assets, through passing Senate Bill 350 (Chapter 27 of the Statutes of 2020) for the purpose of owning, controlling, operating, or managing electrical and gas services for its ratepayers, for the benefit of all Californians if PG&E were to lose its business license in a six-step accountability process overseen by the Public Utilities Commission. At that time, PG&E was in bankruptcy due to an untenable amount of liabilities for wildfires caused by its equipment. Senate Bill 350 created a successor in name only and was never in a position to receive PG&E assets. This bill builds on Senate Bill 350 by authorizing an in-depth unbiased study by a neutral third party to assess the practical, financial, legal, regulatory, labor, and technical aspects of a smooth and just transition away from the IOU model to one that prioritizes the needs of the people and ecology of the State of California.SEC. 3. Chapter 3.5 (commencing with Section 25250) is added to Division 15 of the Public Resources Code, to read: CHAPTER 3.5. Investor-Owned Utility Transition Feasibility Study25250. For purposes of this chapter, the following definitions apply:(a) Clean energy investments, incentives, and ownership refers to the levels of private investment or public incentives in energy resources eligible under the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code), and the entities that provided the investment or incentives and own the resources.(b) Critical minerals means those minerals specified by the United States Geological Survey as essential to the economic or national security of the United States, have a supply chain that is vulnerable to disruption, and serve an essential function in the manufacturing of a product, the absence of which would have significant consequences for the economic or national security of the United States. Critical minerals do not include fuel minerals, water, ice, or snow, or common varieties of sand, gravel, stone, pumice, cinders, or clay.(c) Disadvantaged communities advisory group means the disadvantaged communities advisory group established pursuant to subdivision (g) of Section 400 of the Public Utilities Code.(d) Disadvantaged community means a community identified pursuant to Section 39711 of the Health and Safety Code.(e) Distributed energy resources means distributed renewable generation resources, energy efficiency, energy storage, electric vehicles, and demand response technologies.(f) Endangered species means a native species or subspecies of a bird, mammal, fish, amphibian, reptile, or plant that is in serious danger of becoming extinct throughout all, or a significant portion, of its range due to one or more causes, including loss of habitat, change in habitat, overexploitation, predation, competition, or disease.(g) Energy burden means the expense of energy expenditures relative to overall household income.(h) Energy justice means the goal of achieving equity in both the social and economic participation in the energy systems, while also remediating social, economic, and health burdens on those historically harmed by the energy system, including disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(i) Equity, just, and justice mean the goal of creating systems, organizations, and societies that are fair and just, recognizing where disadvantages and barriers exist, and allocating resources and support to ensure equal access and opportunity for all populations.(j) Investor-owned utilities or IOUs means all of the following:(1) Pacific Gas and Electric Company, PG&E Corporation, any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within Pacific Gas and Electric Companys service territory, and any successor to any of the foregoing.(2) Southern California Edison, SCE, any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within Southern California Edisons service territory, and any successor to any of the foregoing.(3) Southern California Gas, a subsidiary of Sempra, SoCal Gas, and any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of gas service within Southern California Gas service territory, and any successor to any of the foregoing.(4) San Diego Gas and Electric, a subsidiary of Sempra, SDG&E, and any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within San Diego Gas and Electrics service territory, and any successor to any of the foregoing.(k) Just transition means a framework for a fair shift to an economy that is ecologically sustainable, equitable, and just for all its members.(l) Low-income means at or below 80 percent of the state median income.(m) Microgrid means an interconnected system of loads and energy resources, including, but not limited to, distributed energy resources, energy storage, demand response tools, or other management, forecasting, and analytical tools, appropriately sized to meet customer needs, within a clearly defined electrical boundary that can act as a single, controllable entity, and can connect to, disconnect from, or run in parallel with larger portions of the electrical grid, or can be managed and isolated to withstand larger disturbances and maintain electrical supply to connected critical infrastructure.(n) Study team means one or more qualified organizations, public institutions, or consulting firms that is awarded the request for proposal to develop the study pursuant to Section 25251.(o) Successor entity means a public entity, public benefit corporation, or mutual benefit corporation.25251. (a) The commission, on or before March 31, 2026, based on the scoring evaluation developed and conducted by the Disadvantaged Communities Advisory Group, and in coordination with the public advisor and the Public Utilities Commission, shall issue a request for proposals for a team to develop a study to do all of the following:(1) Consistent with Section 25254, conduct a historical energy justice assessment of the IOUs operations and impacts on California residents, wildlife, and ecologies, with a focus on disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(2) Consistent with Section 25255, complete a comparative analysis of the benefits and challenges of transitioning the IOUs to a successor entity in order to identify a recommended model, assess the feasibility of transitioning the IOUs to a successor entity, and identify priority just design features for the successor entity, with the goal of serving the public interest and necessity of the people and ecologies of California.(3) Consistent with Section 25257, if the study, as approved by the commission, finds that it is in the best long-term interests of the people and ecologies of California to transition away from the investor-owned utility model, create a justice-centered implementation plan for managing the transition, including all appropriate mechanisms and any statutory changes that may be required. (b) The request for proposals shall seek applications that contain one or more organizations, public universities, or consultants with a demonstrated commitment to working with disadvantaged communities, and include partnership with the Disadvantaged Communities Advisory Group, and one or more community-based organizations that have supported the formation of Golden State Energy. (c) Organization qualifications shall include all of the following:(1) An eligible organization or consultant shall not have received more than one-half their income in the last three years from or for investor-owned utilities. An organization or consultant that has more than 10 percent of their work from any investor-owned utilities in California shall be required to set up appropriate safeguards to prevent conflicts of interest in the study analysis. An eligible institution, department, or principle investigator within a university shall not have received more than 10 percent of their funding in the past five years from investor owned utilities.(2) An eligible organization or consultant team shall demonstrate:(A) Through references from at least three jurisdictions, experience in policy, finance, grid design, and structural redesign work performed for jurisdictions with a population size of at least 1,000,000 people or a geographic area of 500 square miles.(B) Through case studies of prior work, demonstrated ability to fairly engage and integrate multiple stakeholder perspectives involved in or impacted by renewable energy generation, distribution, or transmission systems.(C) A clear record of research that indicates knowledge of, and engagement with, multiple utility ownership models, including both municipal and investor owned utilities.(D) A clear record of research that demonstrates an understanding of the energy justice and distributional impacts of current energy systems and protocols across the utility system.(d) On or before June 30, 2026, the commission, based on scoring developed and conducted by the Disadvantaged Communities Advisory Group, and with supporting resources and recommendations from the Public Utilities Commission, shall select the team with the highest score that meets the qualifications outlined in subdivision (c) and demonstrates their ability to meet study objectives outlined in subdivision (a) and Sections 25254, 25255, and 25257 as the study team.(e) The commission shall hold a public proceeding and submit a report of the study teams findings and recommendations, including any statutory changes that may be required, to the Legislature, in compliance with Section 9795 of the Government Code, no later than 24 months after selecting the study team for the feasibility portion of the study, and no later than 36 months after selecting the study team for the implementation plan portion of the study. 25252. (a) The commission shall require the study team to select and convene an advisory council, with recommendations from the Disadvantaged Communities Advisory Group, by December 31, 2026, to participate in the study of the vision for a new energy system as outlined in Section 25255. The advisory council shall review and provide recommendations on the initial scope of the study and implementation plan and on all preliminary and final drafts. Comments and recommendations from the advisory council that are not incorporated by the study team shall be included as an addendum to the study.(b) (1) The advisory council shall be drawn from diverse backgrounds to represent interests of disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes throughout the IOUs service territories and represent geographically diverse areas of California and consist of at least 13 members who collectively represent the following lived experiences and subject matter expertise:(A) Tribal utilities.(B) Community choice aggregation.(C) Low-income residential ratepayer advocacy.(D) Equitable rate design and utility cost allocation.(E) Environmental justice, energy justice, or utility justice issues.(F) Racial and economic justice.(G) Survivors of IOU-caused wildfires.(H) Disability rights.(I) Federally recognized California Indian tribes.(J) Nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(K) Labor unions representing utility workers.(L) Inclusive workforce development.(M) Deep knowledge of distributed energy resources and grid architecture.(2) Members of the advisory council shall not be current or previous employees, or current contractors, of an electrical corporation, as defined in Section 218 of the Public Utilities Code.(c) Members of the advisory council shall be entitled to per diem compensation and reimbursement of expenses for meetings, upon appropriation by the Legislature.25253. (a) For purposes of carrying out this chapter, the study team may do all of the following:(1) Consult with any stakeholders as needed or appropriate.(2) Request the production of books, records, correspondence, figures, charts, memoranda, papers, and documents, and other relevant materials of any nature from the commission, the Public Utilities Commission, and the IOUs.(b) For purposes of carrying out this chapter, the study team shall do all of the following:(1) Collaborate with the advisory council and the commission, through the Public Advocates Office, to host a minimum of four public hearings in geographically diverse regions of the IOUs service territories and during a variety of times to accommodate different work schedules.(2) In its specific findings, clarify all assumptions for findings and include citations to the original data or source for those assumptions.(c) A member of the study team may, if authorized by the prime consultant, take any action that the overall consultant team is authorized to take pursuant to this section.(d) On behalf of the commission, the study team may acquire directly from the head of a state agency available information that they consider useful in fulfilling their deliverables. All state agencies shall cooperate with the commission on behalf of the study team with respect to such information and shall furnish all information requested by the study team to the extent permitted by law. The study team shall keep confidential any information received from a state agency that is confidential or exempt from the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) or subject to a nondisclosure agreement.(e) As consultants to the commission, the study team shall have the administrative, technical, and legal assistance of the Department of Justice, the commission, the Public Utilities Commission, and the State Air Resources Board.(f) The study team may procure supplies and services by contract in accordance with applicable laws and rules.(g) The study team may enter into subcontracts for purposes of conducting research or surveys, preparing reports, and performing other activities necessary for the fulfillment of their research deliverables with state departments, agencies, and other instrumentalities of the state, federal departments, agencies, and other federal instrumentalities, and private entities. Subcontractors shall also meet the qualifications outlined in paragraph (1) of subdivision (c) of Section 25251.(h) For purposes of carrying out this chapter, the commission, through the Public Advocates Office, may do all of the following in service of completion of deliverables for the contract:(1) Hold hearings and sit and act at any time and location in California.(2) Consult with any issueholders as deemed necessary to achieve the objectives of this chapter.(3) Request the attendance and testimony of witnesses.(4) Seek an order from a superior court compelling testimony or compliance with a subpoena, including from the IOUs executive leadership.25254. The historical energy justice assessment component of the study described in Section 25251 shall assess the IOUs historical and ongoing operations and impacts on California residents, wildlife, and ecologies, with a focus on impacts to disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission, broken down by ZIP Code, income, race, age, and other relevant demographics. The assessment shall include, but is not limited to, all of the following:(a) An assessment and quantification of the distribution of health harms and reduced lifespans resulting from wildfires, polluting energy generation facilities, and infrastructure.(b) An assessment and quantification of the economic distribution of clean energy investments, incentives, and ownership.(c) An assessment of the impacts of rate increases and the extent and distribution of energy burdens based on historical rates.(d) An assessment of the distribution and quantity of utility disconnections, including disconnections due to lack of payment and public safety power shutoffs.(e) An assessment of the emotional, economic, ecological, and safety-related impacts from disasters caused by the IOUs, including, but not limited to, wildfires, pipeline explosions, power shutoffs, deenergization events, and the potential health impacts and lifespan reductions from those impacts.(f) An assessment of the pollution and other ecological impacts from energy generating infrastructure and the potential health impacts and lifespan reductions from those impacts.(g) An assessment of the extent and distribution of delayed or lack of provision of electricity and gas service and hookups.(h) An assessment of the liability incurred by, and during, the IOUs ownership, including specifying the portion of risks and liabilities likely to be transferred to a successor entity.(i) A quantification of the IOUs current tax obligations to the state.(j) An assessment of lands taken or received that were previously owned and stewarded by federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(k) An assessment of the IOUs historical and ongoing impacts on California wildlife, endangered species, and ecologies.(l) An assessment and audit of the IOUs capital expenditures and operating expenses to identify the cost-effectiveness of infrastructure investments.25255. (a) The comparative analysis of the benefits and challenges component of transitioning the IOUs to a recommended successor entity portion of the study described in paragraph (2) of subdivision (a) of Section 25251 shall provide a comparative assessment of transitioning the IOUs to either a public entity, nonprofit public benefit corporation, or mutual benefit corporation, assess the overall feasibility of transitioning the IOUs to a successor entity, and identify priority energy just design features for a successor entity.(b) The comparative analysis shall comprise all of the following:(1) An assessment of all legal, economic, financial, governance, and other relevant aspects of the ownership types required to successfully transition the assets and operations of the IOUs to a nonprofit public benefit corporation, such as Golden State Energy, a mutual benefit corporation, or a publicly owned electric utility, which may be in existence or yet to be formed.(2) An assessment of whether there are any structural limitations or advantages of each ownership type relative to the successor entitys ability to serve the people of California and to achieving the following policy objectives:(A) A demonstrable reduction in electricity costs for customers over a 30-year period, with a focus on increasing energy bill affordability for low-income communities, disadvantaged communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes, ensuring electricity costs are less than 3 percent of household income.(B) Increased opportunity for labor benefits through maintaining pensions and increasing benefits for workers, increasing good union jobs and inclusive workforce development in the region.(C) Increased public accountability, trust, and transparency in governing structures, financial spending, maintenance, and infrastructure decisions.(c) The feasibility assessment shall include all of the following:(1) Identification of legal and regulatory issues, and recommendations for addressing these issues, that might arise from transitioning the assets and operations of the IOUs and their respective operations as described in this chapter, and post-transition, in order to do all of the following:(A) Maintain the authority for the establishment of municipal utility districts, rural electric cooperatives, and tribal utilities, and ensure the successor entity cooperates with other public entities.(B) Safeguard or strengthen the worker and labor benefits, including union protections, during and after the transition period, and provide for workers rights and a just transition for workers impacted by the decommissioning of unsafe, polluting infrastructure.(C) By no later than 2032, safely decommission generation, transmission, and piping infrastructure transferred to the successor entity that is unsafe and polluting, prioritizing infrastructure that is causing disproportionate harms in disadvantaged communities, low-income communities, federally recognized California Indian tribes, or nonfederally recognized California Native American tribes.(D) Manage future wildfire liability.(E) Equitably decommission gas infrastructure and transition towards electrification, prioritizing the decommissioning of gas powerplants in disadvantaged communities and replacement with community-owned distributed energy resources without unduly burdening ratepayers, especially low-income or disadvantaged ratepayers, with associated costs.(2) A preliminary evaluation of the long-term costs and benefits over at least a 30-year horizon of a transfer in ownership to a successor entity, including an assumption for clean energy, electrification, and grid investments at a pace in accordance with state climate goals. This evaluation shall incorporate all of the following:(A) The potential for securitization of debt, including consideration of tax-exempt bonding for municipal utilities.(B) Consideration of the portion of utility capital expenses paid for by ratepayer contributions.(C) Application of all legally claimed depreciation of assets by the IOUs.(D) Equitable finance and revenue sources that may be available to the successor entity for its operational needs, including for purchase, maintenance, and upgrades, with information regarding all of the following:(i) Mechanisms to support the creditworthiness of the successor entity during the early years of operation.(ii) Access to bonds.(iii) Long-term opportunities for public financing.(iv) Ability to leverage federal funding in the form of elective pay, as outlined in the Inflation Reduction Act of 2022 (Public Law 117-169).(v) Options for revenue collected from rates and other financial resources.(3) A thorough consideration of which IOU assets should be prioritized for transfer and a timeline for those transfers, including all of the following:(A) The merits or risks of splitting ownership of the IOUs distribution infrastructure, transmission infrastructure, program administration, generation, and retail energy services.(B) The merits or risks of splitting ownership of the IOUs electrical and gas infrastructure.(C) The merits or risks of splitting ownership by geographic territory.(D) A full consideration of which assets to prioritize for transfer and a timeline for those transfers, including consideration of grid architectures that maximize distributed energy resources and future needs for distribution system operator infrastructure.(E) An evaluation of potential benefits, if any, that may be realized by separating the ownership and operation of the electrical distribution system for future distribution system operator models.(d) The identification of just design features for a successor entity and the mechanisms to realize them shall include, but not be limited to, all of the following:(1) The acknowledgment, rectification, and repair of prior harms, as found in the historical energy justice assessment pursuant to Section 25254.(2) Increasing social equity, electrical system reliability and performance, ecological sustainability, and climate resilience, including the ability to adapt to adverse climate-related weather disasters and other economic, social, and infrastructural crises.(3) Minimizing environmental health harms in the region and in homes.(4) Enhancing stewardship of finite resources and fragile ecologies through reducing the need for future large scale buildout, land clearing, or installation of ecologically disruptive energy generation, transmission, and distribution assets, and minimizing extraction of critical minerals.(5) Focusing on disadvantaged communities, low-income communities, federally recognized California Indian tribes, and nonfederally recognized California Native American tribes in decisionmaking processes.(6) Creating innovative participatory governance and accountability structures that enable community members, including low-income members and users with disabilities, to meaningfully impact the priorities of the successor entity.(7) Adopting mechanisms for sustained public engagement and transparency that holds the successor entity accountable to its mission to serve the communitys well-being.(8) Creating alternative mechanisms to utility disconnections to cover nonpayment by customers.(9) Including nonenergy impacts, social costs and benefits, health impacts, and more equitable climate outcomes in evaluating cost-effectiveness and decisionmaking.(10) Creating governance of the successor entity in a manner that maximizes public participation and energy democracy, including all of the following:(A) Whether members of the board of directors of the successor entity should be appointed pursuant to Part 2 (commencing with Section 3420) of Division 1.7 of the Public Utilities Code, elected by the customers of the successor entity, or a combination of appointees and elected members, and what type of expertise or experience should be represented.(B) Term limits for members of the board of directors.(C) Size and representation of the board of directors.(D) Involvement of, and robust funding of, technical assistance mechanisms to support community-based organizations in contributing to the decisions of the board of directors.(E) Adequate full-time staffing needs for the board of directors.(11) Requirements on the operations of the successor entity, including on all of the following:(A) Data collection by the successor entity and the public availability of collected data.(B) Public engagement and transparency, including all of the following:(i) Public engagement timelines and processes for rate cases, budget planning, and other policy and program approvals.(ii) Public meetings, notices, and comment periods.(iii) Relationships with local government, including reporting and communication requirements on projects undertaken by the successor entity with defined local economic benefits.25256. (a) Upon completion of the study components described in Sections 25254 and 25255, the study team, in consultation with the advisory council, consistent with Section 25252, shall recommend a particular successor entity ownership type to the commission for further feasibility review and implementation considerations.(b) On or before September 30, 2028, the commission, through a public process, shall vote to approve the study and recommended a particular successor entity ownership type based on a rubric comparing each of the successor entity ownership types to the incumbent IOU model using the following criteria:(1) Long-term affordability for the state and for ratepayers.(2) Safety.(3) Reliability.(4) Climate resilience.(5) Local economic benefits.(6) Health impacts.(7) Energy justice. 25257. (a) If the study, as approved by the commission, finds that it is in the best long-term interests of the people and ecologies of California to transition away from the investor-owned utility model, the study team shall begin work to create a justice-centered implementation plan, as described in paragraph (3) of subdivision (a) of Section 25251, to outline a timeline and transition process to the successor entity, including recommendations for which branches of government or agencies should be responsible and coordinate with which portions of the public to ensure the transition fairly minimizes burdens and unintended consequences and fairly maximizes benefits in service of the public interest and necessity.(b) The implementation plan shall identify all appropriate implementation mechanisms, including statutory changes that may be required, recommendations for specific bylaws, operating procedures, governance structures, or otherwise to ensure the successor entity is structured, operationalized, and has the proper authority and mandate to ensure more just outcomes, based in part on findings pursuant to Sections 25254 and 25255.(c) The implementation plan shall additionally do all of the following:(1) Recommend mechanisms to fairly set the acquisition cost and valuation in as legally defensible and timely manner as possible, with the goal of avoiding lengthy periods of litigation over the acquisition cost.(2) Recommend an appropriate regulatory structure to clearly delineate the relationship between the Public Utilities Commission and the successor entity, including consideration of an independent oversight body for the successor entity.(3) Provide for community benefit agreements and other local economic benefit and cost savings to the maximum extent possible for new infrastructure investments and maintenance, prioritizing clean distributed energy resources.(d) The commission, through a public process, shall vote to approve the implementation plan on or before October 31, 2029.SEC. 4. Article 4.5 (commencing with Section 570) is added to Chapter 3 of Part 1 of Division 1 of the Public Utilities Code, to read: Article 4.5. Infrastructure Project Procurement570. For purposes of this article, all of the following definitions apply:(a) Best value means a procurement process whereby the selected bidder is selected on the basis of objective criteria for evaluating the qualifications of bidders with the resulting selection representing the best combination of price and qualifications.(b) Best value contract means a competitively bid contract entered into pursuant to this article.(c) Best value contractor means a properly licensed person, firm, or corporation that submits a bid for, or is awarded, a best value contract.(d) Demonstrated management competency means the experience, competency, capability, and capacity of the proposed management staff to complete projects of similar size, scope, or complexity.(e) Financial condition means the financial resources needed to perform the contract. The criteria used to evaluate a bidders financial condition shall include, at a minimum, capacity to obtain all required payment bonds, performance bonds, and liability insurance.(f) Labor compliance means the ability to comply with, and past performance with, contract and statutory requirements for the payment of wages and qualifications of the workforce. The criteria used to evaluate a bidders labor compliance shall include, at a minimum, the bidders ability to comply with the apprenticeship requirements of the California Apprenticeship Council and the Department of Industrial Relations, its past conformance with those requirements, and its past conformance with requirements to pay prevailing wages on public works projects.(g) Qualifications means the financial condition, relevant experience, demonstrated management competency, labor compliance, and safety record of the bidder, and, if required by the bidding documents, some or all of the preceding qualifications as they pertain to subcontractors proposed to be used by the bidder for designated portions of the work. The commission shall evaluate financial condition, relevant experience, demonstrated management competency, labor compliance, and safety record, using, to the maximum extent possible, quantifiable measurements.(h) Relevant experience means the experience, competency, capability, and capacity to complete projects of similar size, scope, or complexity.(i) Safety record means the prior history concerning the safe performance of construction contracts. The criteria used to evaluate a bidders safety record shall include, at a minimum, its experience modification rate for the most recent three-year period and its average total recordable injury or illness rate and average lost work rate for the most recent three-year period.571. (a) The Office of Energy Infrastructure Safety shall develop a best value procurement model for all electrical corporation infrastructure projects. The best value procurement model shall consider all of the following:(1) Demonstrated management competency.(2) Financial condition.(3) Labor compliance.(4) Relevant experience.(5) Safety records.(b) For all infrastructure projects, each electrical corporation shall demonstrate to the commission that the selected contractor is the best value contractor and shall include all bids received in its submission to the commission.SEC. 4.SEC. 5. Section 706.5 is added to the Public Utilities Code, to read:706.5. (a) On or before April 1, 2026, each electrical corporation shall submit a proposed executive compensation structure to the commission that is structured to promote safety as a priority and to ensure public safety through performance metrics.(b) The performance metrics shall include, but not be limited to, all of the following:(1) Successful completion of vegetation management and wildfire mitigation plans.(2) Decommissioning and removing risky electrical lines.(3) Building self-generation supported microgrids throughout the state, including in rural and remote areas of the state.(c) The commission shall approve the compensation structure if it meets the requirements of subdivision (b).SEC. 5.Section 748.3 is added to the Public Utilities Code, to read:748.3.SEC. 6. Section 748.7 is added to the Public Utilities Code, to read:748.7. (a) For a proposed rate increase subject to commission approval and a finding that the new rate is just and reasonable, an electrical corporation shall not propose a compounded annual rate increase on residential customers above the increase in the Consumer Price Index.(b) For proposed rate increases not subject to commission approval and a finding that the new rate is just and reasonable, an electrical corporation shall not propose more than one rate increase per year, and the rate increase shall not apply to California Alternate Rates for Energy program or Family Electric Rate Assistance program customers.(c) For purposes of this section, Consumer Price Index means the greater of the Consumer Price Index for the West Region, the Consumer Price Index for major cities, or the United States Consumer Price Index.SEC. 6.Section 748.5 of the Public Utilities Code is amended to read:748.5.(a)Except as provided in subdivisions (c) and (d), the commission shall require revenues, including any accrued interest, received by an electrical corporation as a result of the direct allocation of greenhouse gas allowances to electric utilities pursuant to subdivision (b) of Section 95890 of Title 17 of the California Code of Regulations to be credited directly to the residential, small business, and emissions-intensive trade-exposed retail customers of the electrical corporation.(b)Not later than January 1, 2013, the commission shall require the adoption and implementation of a customer outreach plan for each electrical corporation, including, but not limited to, such measures as notices in bills and through media outlets, for purposes of obtaining the maximum feasible public awareness of the crediting of greenhouse gas allowance revenues. Costs associated with the implementation of this plan are subject to recovery in rates pursuant to Section 454.(c)The commission may allocate up to 15 percent of the revenues, including any accrued interest, received by an electrical corporation as a result of the direct allocation of greenhouse gas allowances to electrical distribution utilities pursuant to subdivision (b) of Section 95890 of Title 17 of the California Code of Regulations, for clean energy and energy efficiency projects established pursuant to statute that are administered by the electrical corporation, or a qualified third-party administrator as approved by the commission, and that are not otherwise funded by another funding source.(d)(1)Beginning with the fiscal year commencing July 1, 2026, and ending with the fiscal year ending June 30, 2036, from the revenues, including any accrued interest, received by an electrical corporation as a result of the direct allocation of greenhouse gas allowances to electrical distribution utilities pursuant to subdivision (b) of Section 95890 of Title 17 of the California Code of Regulations, the commission shall annually allocate one hundred million dollars ($100,000,000) to the Transformative Climate Communities Program (Part 4 (commencing with Section 75240) of Division 44 of the Public Resources Code) and annually allocate one hundred million dollars ($100,000,000) to the Community Resilience Center Program (Part 5 (commencing with Section 75250) of Division 44 of the Public Resources Code).(2)All moneys allocated for the Transformative Climate Communities Program and Community Resilience Center Program pursuant to this subdivision shall benefit disadvantaged communities in census tracts that are the most vulnerable to climate disaster, including, high wildfire risk areas and areas with power shutoff, flooding, and climate vulnerabilities.SEC. 7. Section 3289 of the Public Utilities Code is amended to read:3289. (a) (1) No later than July 26, 2019, the commission shall initiate a rulemaking proceeding to consider using its authority pursuant to Section 701 to require each electrical corporation, except a regional electrical corporation that chooses not to participate in any fund pursuant to Chapter 3 (commencing with Section 3291), to collect a nonbypassable charge from ratepayers of the electrical corporation to support the fund, including the payment of any bonds issued pursuant to Division 28 (commencing with Section 80500) of the Water Code, as follows:(A) For a large electrical corporation, a charge in an amount sufficient to fund the revenue requirement, as established pursuant to Section 80524 of the Water Code.(B) For a regional electrical corporation, the amount equal to one-half cent per kilowatt-hour ($0.005/kWh).(2) If the commission determines that the imposition of the charge described in paragraph (1) is just and reasonable, and that it is appropriate to exercise its authority pursuant to Section 701 to do so, the commission shall direct each electrical corporation to impose and collect that charge commencing in the month immediately following the month in which the final imposition of the revenue requirement with respect to bonds previously issued pursuant to Division 27 (commencing with Section 80000) of the Water Code is made. The charge shall be collected in the same manner as that for the payments made to reimburse the Department of Water Resources pursuant to Division 27 (commencing with Section 80000) of the Water Code.(b) Notwithstanding any other law, no later than 90 days after the initiation of the rulemaking proceeding, the commission shall adopt a decision regarding the imposition of the charge.(c) (1) Notwithstanding Section 455.5 or 1708, or any other law, the commission shall not revise, amend, or otherwise modify a decision to impose a charge made pursuant to this section at any time before January 1, 2036.(2) Notwithstanding paragraph (1), the commission shall revise the decision adopted pursuant to subdivision (b) to reduce the charge imposed on ratepayers pursuant to subdivision (a) to an amount equal to 5 percent of the costs to support the fund, and require each electrical corporation to contribute the remaining 95 percent of the costs to support the fund.(d) If the administrator authorizes Golden State Energy to participate in the fund pursuant to subdivision (d) of Section 3292, Golden State Energys ratepayers shall be subject to the nonbypassable charge previously imposed by the commission pursuant to this section.SEC. 8. Section 3292 of the Public Utilities Code is amended to read:3292. (a) If, no later than July 27, 2019, each large electrical corporation not subject to an insolvency proceeding on July 12, 2019, notifies the commission of its commitment to provide the initial contribution and the annual contributions, and subsequently provides its initial contribution as set forth in paragraph (3) of subdivision (b), the fund shall be established to pay eligible claims as set forth in subdivision (f) and obtain reimbursement from electrical corporations as set forth in subdivision (h).(b) Except as provided in subdivision (d), to participate in the fund established pursuant to subdivision (a), an electrical corporation shall satisfy the following conditions by no later than June 30, 2020:(1) The electrical corporation is not, and has not been since July 12, 2019, the subject of an insolvency proceeding or on criminal probation unless the electrical corporation meets the following conditions:(A) The electrical corporations insolvency proceeding has been resolved pursuant to a plan or similar document not subject to a stay.(B) The bankruptcy court or a court of competent jurisdiction, in the insolvency proceeding, has determined that the resolution of the insolvency proceeding provides funding or establishes reserves for, provides for assumption of, or otherwise provides for satisfying any prepetition wildfire claims asserted against the electrical corporation in the insolvency proceeding in the amounts agreed upon in any pre-insolvency proceeding settlement agreements or any post-insolvency settlement agreements, authorized by the court through an estimation process or otherwise allowed by the court.(C) The commission has approved the reorganization plan and other documents resolving the insolvency proceeding, including the electrical corporations resulting governance structure as being acceptable in light of the electrical corporations safety history, criminal probation, recent financial condition, and other factors deemed relevant by the commission.(D) The commission has determined that the reorganization plan and other documents resolving the insolvency proceeding are (i) consistent with the states climate goals as required pursuant to the California Renewables Portfolio Standard Program and related procurement requirements of the state and (ii) neutral, on average, to the ratepayers of the electrical corporation.(E) The commission has determined that the reorganization plan and other documents resolving the insolvency proceeding recognize the contributions of ratepayers, if any, and compensate them accordingly through mechanisms approved by the commission, which may include sharing of value appreciation.(2) For a regional electrical corporation, it has voluntarily established a charge required by the commission pursuant to Section 3289. This charge shall be included on monthly bills for customers. Collections on that charge shall be remitted, on a monthly basis, to the administrator for deposit into the fund.(3) Except as provided in subdivision (e), the electrical corporation has provided its initial contribution to the fund no later than September 10, 2019. Initial contributions shall not be recovered from the ratepayers of an electrical corporation, except Golden State Energy.(c) Each participating electrical corporation shall make its annual contribution by January 1 of each calendar year, including, without limitation, any annual contributions for calendar years in which the electrical corporation, or another electrical corporation to which the electrical corporation is the successor, was not a participating electrical corporation. Annual contributions shall not be recovered from the ratepayers of an electrical corporation, except Golden State Energy.(d) (1) The administrator may, and in the case of Golden State Energy shall, authorize an electrical corporation that is formed after July 12, 2019, to participate in the fund if the administrator determines that the electrical corporation meets the requirements of this section. Authorization of an electrical corporation that is formed after July 12, 2019, shall be effective as of a date determined by the administrator and shall apply to covered wildfires after the date of authorization.(2) If Golden State Energy is the successor to Pacific Gas and Electric Company and Pacific Gas and Electric Company made its initial contribution and, if applicable, annual contributions to the fund, the administrator shall not require Golden State Energy to commit to making, or make, its own initial contribution, or annual contributions for a period for which Pacific Gas and Electric Company already made its annual contributions, in order to participate in the fund and the administrator shall authorize Golden State Energy to participate in the fund if Golden State Energy, within 15 days of closing of the acquisition of Pacific Gas and Electric Company, notifies the commission of its commitment to make annual contributions to the fund.(e) An electrical corporation that is the subject of an insolvency proceeding on July 12, 2019, that wishes to participate in the fund shall (1) no later than July 27, 2019, provide written notification to the commission of its election to participate in the fund, and (2) no later than September 10, 2019, obtain approval from the bankruptcy court or a court of competent jurisdiction of its determination to pay, and approval of its payment of, the initial contribution and, as they become due, annual contributions to the fund, provided that the contributions shall not be due to the fund until the date the electrical corporation exits the insolvency proceeding. The electrical corporation shall not be entitled to seek payments from the fund pursuant to subdivision (f) until it has funded its initial contribution and has met the other conditions provided in subdivision (b). Participation of an electrical corporation that is the subject of an insolvency proceeding that satisfies the requirements of this subdivision shall be effective as of July 12, 2019, and shall apply to covered wildfires, provided that the fund shall not pay more than 40 percent of the allowed amount of a claim arising between July 12, 2019, and the date the electrical corporation exits bankruptcy, with the balance of those claims being addressed through the insolvency proceeding.(f) (1) An electrical corporation meeting the applicable requirements of subdivision (b) may seek payment from the fund to satisfy settled or finally adjudicated eligible claims. Only eligible claims shall be made against or paid by the fund. In accordance with the procedures established by the administrator, the administrator shall review and approve any settlement of an eligible claim as being in the reasonable business judgment of the electrical corporation before releasing funds to the electrical corporation for payment. Settlements of subrogation claims that are less than or equal to 40 percent of total asserted claim value as determined by the administrator shall be paid unless the administrator finds that the exceptional facts and circumstances surrounding the underlying claim do not justify the electrical corporations exercise of such business judgment. To the extent approved by the administrator, a settlement shall not be subject to further review by the commission.(2) The administrator shall approve a settlement of an eligible claim that is a subrogation claim if the settlement exceeds 40 percent of the total asserted claim value, as determined by the administrator, and includes a full release of the balance of the asserted claim so long as the administrator finds that the electrical corporation exercised its reasonable business judgment in determining to settle for a higher percentage or on different terms based on a determination that the specific facts and circumstances surrounding the underlying claim justify a higher settlement percentage or different terms. A subrogation claim that is finally adjudicated shall be paid in the full judgment amount.(g) Except for Golden State Energy, all initial and annual contributions shall be excluded from the measurement of the authorized capital structure.(h) (1) Except as provided in paragraph (2), within six months after the commission adopts a decision in an application filed pursuant to Section 1701.8, the electrical corporation shall reimburse the fund for the full amount of costs and expenses the commission determined were disallowed pursuant to Section 1701.8.(2) (A) The obligation of an electrical corporation to reimburse the fund shall be the lesser amount of subparagraph (B) or (C).(B) The costs and expenses determined not to be just and reasonable pursuant to Section 1701.8.(C) The amount determined pursuant to clause (i) minus the amount determined pursuant to clause (ii).(i) (I) Except as specified in subclause (II), for each electrical corporation, 20 percent of the electrical corporations total transmission and distribution equity rate base, including, but not limited to, its Federal Energy Regulatory Commission (FERC) assets, as determined by the administrator for the calendar year in which the disallowance occurred.(II) For Golden State Energys first twelve months of participation in the fund, an amount equal to 20 percent of Pacific Gas and Electric Companys total transmission and distribution equity rate base, including, but not limited to, its Federal Energy Regulatory Commission assets, at the time of the closing of the acquisition of Pacific Gas and Electric Company, as determined by the commission. For Golden State Energys subsequent years of participation in the fund, an amount determined by the commission that is equivalent to the amount specified in subclause (I) for electrical corporations with an equity rate base.(ii) The sum of (I) the amounts actually reimbursed to the fund for costs and expenses that were determined not to be just and reasonable pursuant to Section 1701.8 during the measurement period, added to (II) the amount of any reimbursements to the fund owed by the electrical corporation for costs and expenses disallowed during the measurement period that have not yet been paid.(iii) For purposes of this subparagraph, measurement period means the period of three consecutive calendar years ending on December 31 of the year in which the calculation is being performed.(D) The administrator shall publish calculations of the amounts determined pursuant to subparagraphs (B) and (C) on or before January 1 of each calendar year for each electrical corporation.(E) Except as provided in paragraph (3), the electrical corporation shall not be required to reimburse the fund for any additional amounts in any three-calendar-year period.(F) The limitation set forth in this section shall apply only so long as the fund has not been terminated pursuant to subdivision (i).(3) Paragraph (2) does not apply under either of the following circumstances:(A) If the administrator determines that the electrical corporations actions or inactions that resulted in the covered wildfire constituted conscious or willful disregard of the rights and safety of others. For purposes of this subparagraph, evidence that the electrical corporations actions were prudent shall include common sense best practices such as conducting annual audits and replacing equipment that has outlived its usable life pursuant to Section 8386.7, 8386.8, and deenergizing the electrical grid under threatening conditions.(B) If the electrical corporation failed to maintain a valid safety certification on the date of the ignition.(i) (1) The administrator shall, to the extent practicable, manage the fund to prioritize the use of electrical corporation contributions before the use of ratepayer contributions.(2) The fund shall terminate when the administrator determines that the fund resources are exhausted, taking into account the amount of any unpaid liabilities including necessary reserves, any remaining unpaid annual contributions from participating electrical corporations, and the charges authorized pursuant to Section 3289. Upon the determination of the administrator that the fund shall be terminated, the administrator shall pay all remaining eligible claims and fund expenses, and liquidate any remaining assets. The remaining funds shall be transferred to the General Fund. It is the intent of the Legislature that any funds transferred to the General Fund pursuant to this paragraph shall be appropriated to support wildfire mitigation.(j) Notwithstanding subdivision (f), a regional electrical corporations access to the fund to pay eligible claims shall be limited to three times the sum of the regional electrical corporations initial contribution and any funded annual contributions per covered wildfire.SEC. 9.Section 8386.7 is added to the Public Utilities Code, to read:8386.7.SEC. 9. Section 8386.8 is added to the Public Utilities Code, to read:8386.8. (a) Each electrical corporation shall annually triennially contract with an independent and reputable third party to audit all of the electrical corporations equipment and electrical lines and identify any equipment or electrical lines that have outlived their useable life. reached their end-of-life. The audit shall be completed on or before June 30, 2026, and by June 30 of each year thereafter, and submitted to the commission on or before August 31 of each year. in alignment with the wildfire mitigation plan cycle described in subdivision (b) of Section 8386.(b) (1) An electrical corporation shall replace equipment and electrical lines identified by the independent third-party auditor pursuant to an audit described in subdivision (a) that are located in a high fire risk area fire-threat district within five years of the audit.(2) Equipment and electrical lines that are replaced pursuant to paragraph (1) shall be undergrounded. An electrical corporation shall not pass on the cost of undergrounding equipment pursuant to this paragraph to the ratepayers unless the commission determines that the electrical corporations earnings before interest and taxes for the previous year, multiplied by five as a basis for potential earnings before interest and taxes for the next five years, cannot fund the undergrounding work, in which case the commission shall determine what the minimal passthrough to ratepayers may be. ratepayers.(3) If it is more cost effective effective, considering the need to minimize the risk of catastrophic wildfire as quickly as possible, and meets the overall electrical grid needs, an electrical corporation may shall install microgrid technology technology, or other wildfire mitigation alternatives, including covered conductors that conform to state and industry safety standards for electrical equipment, instead of replacing equipment and electrical lines pursuant to paragraph (1). An electrical corporation shall not pass on the costs of wildfire mitigation pursuant to this paragraph to ratepayers.(c) (1) The commission shall assess a fine on an electrical corporation that fails to comply with this section, as follows:(A) The commission shall assess a fine on an electrical corporation that fails to complete an annual audit pursuant to subdivision (a) in an amount equal to 1 percent of the electrical corporations gross revenue for the preceding year. For each subsequent year that an electrical corporation fails to complete an annual audit the fine amount shall be increased to an amount equal to 3 percent of the electrical corporations gross revenue for the preceding year.(B) The commission shall assess a fine on an electrical corporation that fails to replace equipment pursuant to subdivision (b). The fine shall be, at minimum, the estimated cost of the replacement plus 10 percent, as determined by the third-party auditor. (2) Fines collected pursuant to this subdivision shall be used to finance needed repairs. Any excess funds available after needed repairs may be transferred to a future maintenance and repair budget.(d) For purposes of this section, the following definitions apply:(1) End-of-life means the point when the equipment is no longer safe, reliable for use, or performing its intended function within established standards and specifications, and should be decommissioned or replaced.(2) High fire-threat district has the same meaning as defined in Section 3280.SEC. 10.Section 8388.5 of the Public Utilities Code is amended to read:8388.5.(a)The commission shall establish an expedited utility distribution infrastructure undergrounding program consistent with this section.(b)All large electrical corporations shall participate in the program.(c)In order to participate in the program, a large electrical corporation shall submit to the office a distribution infrastructure undergrounding plan that shall address or include, at minimum, all of the following components:(1)A 10-year plan for undergrounding distribution infrastructure.(2)Identification of the undergrounding projects that will be constructed as part of the program, including a means of prioritizing undergrounding projects based on wildfire risk reduction, public safety, cost efficiency, and reliability benefits. Only undergrounding projects located in tier 2 or 3 high fire-threat districts or rebuild areas may be considered and constructed as part of the program.(3)Timelines for the completion of identified and prioritized undergrounding projects, and unit cost targets and mileage completion targets for each year covered by the plan.(4)A comparison of undergrounding versus aboveground hardening of electrical infrastructure and wildfire mitigation for achieving comparable risk reduction, or any other alternative mitigation strategy, such as covered conductor and rapid earth fault current limiter devices, for those prioritized undergrounding projects, evaluating the scope, cost, extent, and risk reduction of each activity, separately and collectively, over the duration of the plan. The comparison shall emphasize risk reduction and include an analysis of the cost of each activity for reducing wildfire risk, separately and collectively, over the duration of the plan.(5)A plan for utility and contractor workforce development.(6)An evaluation of project costs, projected economic benefits over the life of the assets, and any cost containment assumptions, including the economies of scale necessary to reduce wildfire risk and mitigation costs and establish a sustainable supply chain.(d)Upon a large electrical corporation submitting a plan to the office, the office shall do both of the following:(1)Publish the plan for public comment.(2)Within nine months, review and approve or deny the plan. The office may only approve the plan if the large electrical corporation has shown that the plan will substantially increase electrical reliability by reducing the use of public safety power shutoffs, enhanced powerline safety settings, deenergization events, and any other outage programs, and substantially reduce the risk of wildfire. Before approving the plan, the office may require the large electrical corporation to modify the plan.(e)(1)Upon the office approving a plan pursuant to paragraph (2) of subdivision (d), the large electrical corporation shall, within 60 days, submit to the commission a copy of the plan and an application requesting review and conditional approval of the plans costs and including all of the following:(A)Any substantial improvements in safety risk and reduction in costs compared to other hardening and risk mitigation measures over the duration of the plan.(B)The cost targets, at a minimum, that result in feasible and attainable cost reductions as compared to the large electrical corporations historical undergrounding costs.(C)How the cost targets are expected to decline over time due to cost efficiencies and economies of scale.(D)A strategy for achieving cost reductions over time.(2)The assigned commissioner may waive the requirements of subdivisions (b), (d), (f), and (i) of Section 1701.3 for an application submitted to the commission pursuant to paragraph (1).(3)In reviewing an application submitted to the commission pursuant to paragraph (1), the commission shall consider not revisiting cost or mileage completion targets approved, or pending approval, in the electrical corporations general rate case or a commission-approved balancing account ratemaking mechanism for system hardening.(4)Upon the commission receiving an application pursuant to paragraph (1), the commission shall facilitate a public workshop for presentation of the plan and take public comment for at least 30 days.(5)On or before nine months, the commission shall review and approve or deny the application. Before approving the application, the commission may require the large electrical corporation to modify or modify and resubmit the application.(6)The commission shall consider continuing an existing commission-approved balancing account ratemaking mechanism for system hardening for the duration of a plan, as determined by the commission, and shall authorize recovery of recorded costs that are determined to be just and reasonable.(f)If the plan is approved by the office and commission, the large electrical corporation shall do all of the following:(1)Every six months, file a progress report with the office and the commission. The large electrical corporation and the office shall publish these progress reports on their internet websites.(2)Include ongoing work plans and progress in annual wildfire mitigation plan filings.(3)Hire an independent monitor, selected by the office, to review and assess the large electrical corporations compliance with its plan and submit a report with the office each December 1 over the course of the plan.(g)(1)In reviewing and assessing the large electrical corporations compliance with its plan pursuant to paragraph (3) of subdivision (f), the independent monitor shall assess whether the large electrical corporations progress on undergrounding work has been consistent with the objectives identified in its plan. The independent monitors report shall specify any failure, delays, or shortcomings of the large electrical corporation and provide recommendations for improvements to accomplish the objectives set forth in the plan.(2)The large electrical corporation shall have 180 days to correct and eliminate any deficiency specified in the independent monitors report.(3)On or before December 1 of each year the plan is in effect, the independent monitor shall submit the report to the office.(h)The office shall publish reports received pursuant to paragraph (3) of subdivision (g) on its internet website.(i)(1)The office shall consider the independent monitors report and whether the large electrical corporation has cured any deficiencies, and may recommend penalties to the commission.(2)The commission may assess penalties on a large electrical corporation that fails to substantially comply with a commission decision approving its plan.(j)Each large electrical corporation participating in the program shall apply for available federal, state, and other nonratepayer moneys throughout the duration of its approved undergrounding plan, and any moneys received as a result of those applications shall be used to reduce the programs costs on the large electrical corporations ratepayers.SEC. 11.SEC. 10. Section 8388.6 is added to the Public Utilities Code, to read:8388.6. After an emergency or disaster in which an electrical corporations electrical infrastructure was destroyed, if the electrical corporation shall rebuild rebuilds the destroyed electrical infrastructure using infrastructure, it shall use the most cost-effective wildfire mitigation strategies that conform to state and industry safety standards for electrical equipment and that minimize the risk of catastrophic wildfire as quickly as possible, including consideration of undergrounding and covered conductor methods, to the extent applicable. The cost of undergrounding undergrounding, installing covered conductors, or other more cost-effective wildfire mitigation strategies for electrical infrastructure pursuant to this section shall not be recovered from ratepayers.SEC. 12.SEC. 11. Chapter 10 (commencing with Section 8450) is added to Division 4.1 of the Public Utilities Code, to read: CHAPTER 10. Utility Service Disconnections8450. The Legislature finds and declares all of the following:(a) Access to electricity and heating services is a human right that no one should be deprived of due to an inability to pay.(b) Electricity is essential to the health, safety, and welfare of the people of this state and to the states economy.(c) It is the responsibility of state government to ensure that a reliable supply of electricity is maintained at a level consistent with the need for the electricity to protect public health and safety, promote the general welfare, and protect environmental quality.(d) Gas and electrical service shutoffs threaten the health of infants, children, the elderly, low-income families, communities of color, people for whom English is a second language, physically disabled persons, and persons with life-threatening medical conditions.(e) Section 779.3 of the Public Utilities Code prohibits a gas or electrical corporation from disconnecting service for nonpayment by a residential customer receiving a medical baseline allowance when the customer or a member of the customers household is under hospice care at home, depends upon life-support equipment, or has a life-threatening condition or illness.(f) Public Utilities Commission Decision 20-06-003 (June 16, 2020), Phase I Decision Adopting Rules and Policy Changes to Reduce Residential Customer Disconnections for the Larger California-Jurisdictional Energy Utilities, prohibits large investor-owned utilities from doing both of the following:(1) Disconnecting residential customers when temperatures above 100 degrees or below 32 degrees are forecasted based on a 72-hour look-ahead period.(2) Disconnecting residential customers who currently have Low-Income Home Energy Assistance Program pledges pending.(g) In response to the COVID-19 pandemic, Public Utilities Commission Resolution M-4842 (April 17, 2020), Emergency Authorization and Order Directing Utilities to Implement Emergency Customer Protections to Support California Customers During the COVID-19 Pandemic, required electrical and gas utilities to suspend disconnection for nonpayment, commonly known as the COVID-19 disconnection moratorium.(h) The COVID-19 disconnection moratorium ended in September 2021, but California investor-owned utilities began disconnecting their customers for nonpayment in August 2022.(i) From August 2022 to August 2024, Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas and Electric Company collectively disconnected their customers for nonpayment 412,787 times.(j) From August 2022 to August 2024, Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas and Electric Company also compensated their shareholders with $7,620,000,000 in dividends. During that period, the estimated cost to prevent all residential shutoffs for nonpayment was seventy-seven hundredths of 1 percent of that compensation to shareholders.8451. For purposes of this chapter, the following definitions apply:(a) Adult means a person 18 years of age or older.(b) Economic unit means all adults contributing to and sharing in the income and expenses of a household.(c) Electrical corporation has the same meaning as defined in Section 218.(d) Gas corporation has the same meaning as defined in Section 222.(e) Household means a residential address shared by a group of adults, including the utility customer, and children who are living together at that address as one economic unit. A household may contain related and unrelated persons. If an adult has no, or minimal, income and lives with an adult who provides financial support to that adult, both adults are part of the same household. A child under 18 years of age and living with a parent or guardian is part of the same household as the parent or guardian.(f) Local publicly owned electric utility has the same meaning as defined in Section 224.3.(g) Residential service means the provision of electrical or natural gas service to a residential connection at a single-family residence, a multifamily residence, a mobilehome, including, but not limited to, a mobilehome in a mobilehome park, or farmworker housing.(h) Utility means an electrical corporation, local publicly owned electric utility, gas corporation, or local publicly owned gas utility.8452. (a) A utility shall not disconnect a customers residential service for nonpayment if the customers household is the residence of any of the following persons:(1) A child five years of age or younger, regardless of the customers relationship with the child.(2) A person 65 years of age or older.(3) A person with a disability, consistent with subdivision (d).(4) A person with a medical condition, consistent with subdivision (d).(5) A person who is pregnant or 0 to 12 weeks postpartum, consistent with subdivision (e).(b) (1) A utility shall not disconnect a customers residential service for nonpayment if the customer has a household income at or below 200 percent of the federal poverty line.(2) For purposes of paragraph (1), a utility shall deem a residential customer to have a household income below 200 percent of the federal poverty line if any member of the household is a current recipient of a benefit or discount pursuant to one or more of the following programs, or if the customer declares that the households annual income is less than 200 percent of the federal poverty level:(A) The California Alternative Rates for Energy (CARE) program, as described in Section 739.1.(B) The CalWORKS program, as described in Chapter 2 (commencing with Section 11200) of Part 3 of Division 9 of the Welfare and Institutions Code.(C) CalFresh, as described in Section 18900.2 of the Welfare and Institutions Code.(D) General assistance, as described in Part 5 (commencing with Section 17000) of Division 9 of the Welfare and Institutions Code.(E) Medi-Cal, as described in Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code.(F) Federal Supplemental Security Income, as described in Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.).(G) The State Supplementary Payment Program, as described in Chapter 3 (commencing with Section 12000) of Part 3 of Division 9 of the Welfare and Institutions Code.(H) The California Special Supplemental Nutrition Program for Women, Infants, and Children, as described in Section 123280 of the Health and Safety Code.(3) For purposes of paragraph (2), a utility shall provide a customer with the ability to confirm eligibility for enrollment through a request for self-certification of eligibility under penalty of perjury.(c) On and after January 1, 2026, each electrical corporation and gas corporation shall automatically reconnect all households that are eligible for protection under subdivision (a) or (b) that had their residential service disconnected due to nonpayment.(d) (1) (A) In order for the prohibition described in paragraph (3) or (4) of subdivision (a) to apply to a customers residential service, the customer, or a member of the customers household, shall notify the utility that the prohibition applies. The customer, or a member of the customers household, shall verify the prohibitions applicability by submitting to the utility, within three weeks after their latest disconnection notice, a certification from a primary care provider that the discontinuation of residential service will be life threatening to, aggravate an existing medical condition of, or pose a serious threat to the health and safety of, a resident of the household where the residential service is provided. Upon receipt of the certification and while verifying the certification, the utility shall not disconnect the customers service or the service of a member of the customers household.(B) Each electrical corporation and gas corporation shall create a certification form that states the eligibility requirements that apply to this chapter and that does not request the identification of the specific category that applies.(2) Notwithstanding paragraph (1), the customer, or a member of the customers household, may automatically establish the applicability of the prohibitions described in paragraphs (3) or (4) of subdivision (a) without submitting a certification from a primary care provider if the customer, or member of the customers household, participates in the Medical Baseline Program.(e) If a customer, or a member of the customers household, is protected from disconnections pursuant to paragraph (5) of subdivision (a), the customer or member shall submit to the utility the certification of a primary care provider that the customer or member is pregnant or postpartum.(f) Local publicly owned electric or gas utilities shall revise their policies that mitigate utility shutoffs for nonpayment to be at least as protective of the vulnerable customer groups listed in subdivision (a) as required by this section. If the local publicly owned electric or gas utility does not have an policy that mitigates shutoffs for nonpayment for a vulnerable customer group listed in subdivision (a), the local publicly owned electric or gas utility shall establish a policy for that vulnerable customer group as required by this section.8453. (a) Each utility shall notify its residential customers of the prohibitions described in subdivisions (a) and (b) of Section 8452 by doing all of the following:(1) Posting the prohibitions in a publicly available location on the utilitys internet website, if the utility has an internet website.(2) Providing the prohibitions, in writing, to the utilitys residential customers at least twice per year, including before the onset of the summer and winter seasons.(3) Including the prohibitions on each residential customers utility bill.(4) Including the prohibitions on each new residential customers first utility bill.(b) All written notices required pursuant to subdivision (a) shall be provided in English, the languages listed in Section 1632 of the Civil Code, and any other language spoken by 10 percent or more of the customers in the utilitys service area.(c) Each utility that has an internet website shall create an online reporting system available through its internet website that enables its residential customers to report when their residential service has been disconnected in violation of subdivision (a) or (b) of Section 8452. The utility shall promptly respond to reports filed through its online reporting system and shall disclose a violation to the commission.8454. (a) A utility shall offer a residential customer who meets the requirements of subdivision (a) or (b) of Section 8452 a payment plan for the customers electricity or gas service that is provided by the utility, including a percentage of income payment plan, as authorized by the commission in commission Decision 21-10-012 (October 11, 2021), Decision Authorizing Percentage of Income Payment Plan Pilot Programs, in which customers are subject to a monthly bill cap set at a percentage of household income not to exceed 4 percent of household income or one-twelfth of the combined amount of the customers electricity and gas bills immediately before the customers enrollment in the payment plan required to be offered by the utility pursuant to this section, whichever is lower.(b) A residential customer subject to the payment plan shall not be financially responsible for any costs of providing electrical service or gas service exceeding the customers payment plan amount.(c) A utility subject to the disconnection prohibition described in Section 8452 shall be subject to both of the following provisions:(1) The utility shall not disconnect a residential customer described in subdivision (a) or (b) of Section 8452 due to lack of participation in a payment plan described in subdivision (a).(2) The utility may report to a credit reporting agency that a customers outstanding balances are delinquent only if the customer declines to participate in a payment plan or fails to pay in full the amounts due under a payment plan on three separate occasions during the terms of a payment plan described in this section or another payment plan offered by the utility.8455. (a) The commission shall establish a citation program to impose a penalty on an electrical corporation or gas corporation that violates Section 8452.(b) (1) The commission may bring an action in state court for equitable relief regarding an electrical corporations or gas corporations use of a method, act, or practice inconsistent with this chapter.(2) A customer, or a member of the customers household, may bring an action in state court for equitable relief regarding a utilitys or community choice aggregators use of a method, act, or practice inconsistent with this chapter.8456. (a) (1) Each utility providing electrical service or gas service, or both, to residential customers shall collect and submit to the commission monthly data on electrical and gas service terminations, reconnections, bill assistance and payment agreements, arrears, and created and broken payment plans.(2) When collecting and submitting to the commission the monthly data described in paragraph (1), those utilities shall do both of the following:(A) Use metrics that replicate the data provided in the monthly disconnect data reports authorized by the commission pursuant to commission Decision 18-12-013 (December 13, 2018), Decision Adopting Interim Rules to Reduce Residential Customer Disconnections for California-Jurisdictional Energy Utilities.(B) Aggregate electrical and gas service termination and reconnection data by ZIP Code, similar to the monthly disconnect data reports authorized by the commission pursuant to commission Decision 18-12-013 (December 13, 2018), Decision Adopting Interim Rules to Reduce Residential Customer Disconnections for California-Jurisdictional Energy Utilities.(b) The commission shall either include the data as monthly filings in commission Rulemaking 18-07-005 (July 12, 2018), Order Instituting Rulemaking to Consider New Approaches to Disconnections and Reconnections to Improve Energy Access and Contain Costs, or create a new page on the commissions internet website that clearly collects and presents all of the data submitted to the commission pursuant to this section.8457. (a) This chapter does not apply to utility actions related to wildfire prevention or other safety measures, including public safety power shutoffs or deenergization events.(b) This chapter does not apply to unintentional service disruptions or outages.SEC. 13.SEC. 12. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act or because costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution. |
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| 86 | + | The people of the State of California do enact as follows:SECTION 1. This act shall be known, and may be cited, as the Investor-Owned Utilities Accountability Act.SEC. 2. The Legislature finds and declares all of the following:(a) Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), San Diego Gas and Electric Company (SDG&E), and SoCalGas, which have collectively exercised their monopoly over California ratepayers for over 100 years, have lost the trust of the people of California due to their crushingly high rates, exorbitant payouts to executives and shareholders, reckless endangerment of life and property, and excessive spending with the goal of generating profits rather than providing an essential service.(b) Rates are higher in investor-owned utility (IOU) service territories across California than in not-for-profit utilities, including municipal utilities, rural electric cooperatives, and tribal utilities, which has resulted in working class and low-income people paying higher rates. On average, California IOU electricity rates are more than 50 percent higher than rates charged by publicly owned utilities. For IOU customers in California, rates have increased nearly 50 percent over the past three years.(c) Under the current system, most distribution and transmission infrastructure is financed by IOUs and paid for by utility ratepayers. Ratepayers also pay for a rate of return for the IOUs for each project, which can average close to 10 percent. This guaranteed return on investment rate creates a significant and increasingly unsustainable burden on ratepayers as more unnecessary transmission lines are constructed. This can result in unnecessary rate hikes for consumers, as capital expenses can be overestimated and overspent to increase profits. As an example, in the 2023 General Rate Case, PG&E admitted that they overestimated the actual cost of infrastructure needed by $3 billion. Despite electricity demand remaining stable, executive compensation, infrastructure spending, and customer rates continue to increase. While utilities submit new rate increase proposals on a roughly three- to four-year cycle to the Public Utilities Commission, they can also submit annual increases and emergency supplements. The compounding effect and increased frequency of these rate increases, largely related to wildfire emergencies, have unfairly burdened California residents. Specifically, from January 2021 to October 2024, inclusive, PG&E residential rates increased by 56 percent, SCE rates increased by 48 percent, and SDG&E rates increased by 21 percent.(d) These increasing rate hikes and record profits are a function of the IOUs being unwilling to adequately serve their ratepayers through affordable utility rates. One in five households served by the states largest IOUs are in utility debt. From August 2022 to August 2024, inclusive, PG&E, SCE, and SDG&E also compensated their shareholders with $7.62 billion in dividends. During that period, the estimated cost to prevent all residential shutoffs for nonpayment was seventy-seven one hundredths of 1 percent of that compensation to shareholders.(e) The IOUs have caused some of Californias most destructive wildfires. PG&E is responsible for more than 30 wildfires since 2017 that have destroyed more than 23,000 homes and businesses and killed more than 100 people. These fires include the 2017 Tubbs Fire, the 2018 Camp Fire, the 2019 Kincade Fire, the 2020 Zogg Fire, and the 2021 Dixie Fire. SCE was found responsible for burning more than 385,000 acres, destroying thousands of structures, and causing five deaths in the 2017 Rye Fire, the 2017 Meyers Fire, the 2017 Liberty Fire, the 2017 Thomas Fire, and the 2018 Woolsey Fire. In 2007, SDG&E caused three fires, the Witch Fire, the Guejito Fire, and the Rice Fire, burning 207,000 acres, killing two people, destroying 1,141 homes. Assembly Bill 1054 (Chapter 79 of the Statutes of 2019) established a wildfire insurance fund of $21 billion, all passed onto ratepayer bills, directly and indirectly.(f) Past and present experience demonstrates that the IOUs prioritize profits over the safety and well-being of the ratepayers and residents of California, and thus, to support public necessity and public purpose, must be replaced with a well-researched and structured successor entity that focuses on the needs of ratepayers, workers, fire survivors, and community members instead of shareholders.(g) The State of California created the not-for-profit public benefit corporation, Golden State Energy, designated as a receiver for PG&Es assets, through passing Senate Bill 350 (Chapter 27 of the Statutes of 2020) for the purpose of owning, controlling, operating, or managing electrical and gas services for its ratepayers, for the benefit of all Californians if PG&E were to lose its business license in a six-step accountability process overseen by the Public Utilities Commission. At that time, PG&E was in bankruptcy due to an untenable amount of liabilities for wildfires caused by its equipment. Senate Bill 350 created a successor in name only and was never in a position to receive PG&E assets. This bill builds on Senate Bill 350 by authorizing an in-depth unbiased study by a neutral third party to assess the practical, financial, legal, regulatory, labor, and technical aspects of a smooth and just transition away from the IOU model to one that prioritizes the needs of the people and ecology of the State of California.SEC. 3. Chapter 3.5 (commencing with Section 25250) is added to Division 15 of the Public Resources Code, to read: CHAPTER 3.5. Investor-Owned Utility Transition Feasibility Study25250. For purposes of this chapter, the following definitions apply:(a) Clean energy investments, incentives, and ownership refers to the levels of private investment or public incentives in energy resources eligible under the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code), and the entities that provided the investment or incentives and own the resources.(b) Critical minerals means those minerals specified by the United States Geological Survey as essential to the economic or national security of the United States, have a supply chain that is vulnerable to disruption, and serve an essential function in the manufacturing of a product, the absence of which would have significant consequences for the economic or national security of the United States. Critical minerals do not include fuel minerals, water, ice, or snow, or common varieties of sand, gravel, stone, pumice, cinders, or clay.(c) Disadvantaged communities advisory group means the disadvantaged communities advisory group established pursuant to subdivision (g) of Section 400 of the Public Utilities Code.(d) Disadvantaged community means a community identified pursuant to Section 39711 of the Health and Safety Code.(e) Distributed energy resources means distributed renewable generation resources, energy efficiency, energy storage, electric vehicles, and demand response technologies.(f) Endangered species means a native species or subspecies of a bird, mammal, fish, amphibian, reptile, or plant that is in serious danger of becoming extinct throughout all, or a significant portion, of its range due to one or more causes, including loss of habitat, change in habitat, overexploitation, predation, competition, or disease.(g) Energy burden means the expense of energy expenditures relative to overall household income.(h) Energy justice means the goal of achieving equity in both the social and economic participation in the energy systems, while also remediating social, economic, and health burdens on those historically harmed by the energy system, including disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(i) Equity, just, and justice mean the goal of creating systems, organizations, and societies that are fair and just, recognizing where disadvantages and barriers exist, and allocating resources and support to ensure equal access and opportunity for all populations.(j) Investor-owned utilities or IOUs means all of the following:(1) Pacific Gas and Electric Company, PG&E Corporation, any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within Pacific Gas and Electric Companys service territory, and any successor to any of the foregoing.(2) Southern California Edison, SCE, any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within Southern California Edisons service territory, and any successor to any of the foregoing.(3) Southern California Gas, a subsidiary of Sempra, SoCal Gas, and any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of gas service within Southern California Gas service territory, and any successor to any of the foregoing.(4) San Diego Gas and Electric, a subsidiary of Sempra, SDG&E, and any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within San Diego Gas and Electrics service territory, and any successor to any of the foregoing.(k) Just transition means a framework for a fair shift to an economy that is ecologically sustainable, equitable, and just for all its members.(l) Low-income means at or below 80 percent of the state median income.(m) Microgrid means an interconnected system of loads and energy resources, including, but not limited to, distributed energy resources, energy storage, demand response tools, or other management, forecasting, and analytical tools, appropriately sized to meet customer needs, within a clearly defined electrical boundary that can act as a single, controllable entity, and can connect to, disconnect from, or run in parallel with larger portions of the electrical grid, or can be managed and isolated to withstand larger disturbances and maintain electrical supply to connected critical infrastructure.(n) Study team means one or more qualified organizations, public institutions, or consulting firms that is awarded the request for proposal to develop the study pursuant to Section 25251.(o) Successor entity means a public entity, public benefit corporation, or mutual benefit corporation.25251. (a) The commission, on or before March 31, 2026, based on the scoring evaluation developed and conducted by the Disadvantaged Communities Advisory Group, and in coordination with the public advisor and the Public Utilities Commission, shall issue a request for proposals for a team to develop a study to do all of the following:(1) Consistent with Section 25254, conduct a historical energy justice assessment of the IOUs operations and impacts on California residents, wildlife, and ecologies, with a focus on disadvantaged communities, low-income communities, andfederally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(2) Consistent with Section 25255, complete a comparative analysis of the benefits and challenges of transitioning the IOUs to a successor entity in order to identify a recommended model, assess the feasibility of transitioning the IOUs to a successor entity, and identify priority just design features for the successor entity, with the goal of serving the public interest and necessity of the people and ecologies of California.(3) Consistent with Section 25257, if the study, as approved by the commission, finds that it is in the best long-term interests of the people and ecologies of California to transition away from the investor-owned utility model, create a justice-centered implementation plan for managing the transition, including all appropriate mechanisms and any statutory changes that may be required. (b) The request for proposals shall seek applications that contain one or more organizations, public universities, or consultants with a demonstrated commitment to working with disadvantaged communities, and include partnership with the Disadvantaged Communities Advisory Group, and one or more community-based organizations that have supported the formation of Golden State Energy. (c) Organization qualifications shall include all of the following:(1) An eligible organization or consultant shall not have received more than one-half their income in the last three years from or for investor-owned utilities. An organization or consultant that has more than 10 percent of their work from any investor-owned utilities in California shall be required to set up appropriate safeguards to prevent conflicts of interest in the study analysis. An eligible institution, department, or principle investigator within a university shall not have received more than 10 percent of their funding in the past five years from investor owned utilities.(2) An eligible organization or consultant team shall demonstrate:(A) Through references from at least three jurisdictions, experience in policy, finance, grid design, and structural redesign work performed for jurisdictions with a population size of at least 1,000,000 people or a geographic area of 500 square miles.(B) Through case studies of prior work, demonstrated ability to fairly engage and integrate multiple stakeholder perspectives involved in or impacted by renewable energy generation, distribution, or transmission systems.(C) A clear record of research that indicates knowledge of, and engagement with, multiple utility ownership models, including both municipal and investor owned utilities.(D) A clear record of research that demonstrates an understanding of the energy justice and distributional impacts of current energy systems and protocols across the utility system.(d) On or before June 30, 2026, the commission, based on scoring developed and conducted by the Disadvantaged Communities Advisory Group, and with supporting resources and recommendations from the Public Utilities Commission, shall select the team with the highest score that meets the qualifications outlined in subdivision (c) and demonstrates their ability to meet study objectives outlined in subdivision (a) and Sections 25254, 25255, and 25257 as the study team.(e) The commission shall hold a public proceeding and submit a report of the study teams findings and recommendations, including any statutory changes that may be required, to the Legislature, in compliance with Section 9795 of the Government Code, no later than 24 months after selecting the study team for the feasibility portion of the study, and no later than 36 months after selecting the study team for the implementation plan portion of the study. 25252. (a) The commission shall require the study team to select and convene an advisory council, with recommendations from the Disadvantaged Communities Advisory Group, by December 31, 2026, to participate in the study of the vision for a new energy system as outlined in Section 25255. The advisory council shall review and provide recommendations on the initial scope of the study and implementation plan and on all preliminary and final drafts. Comments and recommendations from the advisory council that are not incorporated by the study team shall be included as an addendum to the study.(b) (1) The advisory council shall be drawn from diverse backgrounds to represent interests of disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes throughout the IOUs service territories and represent geographically diverse areas of California and consist of at least 13 members who collectively represent the following lived experiences and subject matter expertise:(A) Tribal utilities.(B) Community choice aggregation.(C) Low-income residential ratepayer advocacy.(D) Equitable rate design and utility cost allocation.(E) Environmental justice, energy justice, or utility justice issues.(F) Racial and economic justice.(G) Survivors of IOU-caused wildfires.(H) Disability rights.(I) Federally recognized California Indian tribes.(J) Nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(K) Labor unions representing utility workers.(L) Inclusive workforce development.(M) Deep knowledge of distributed energy resources and grid architecture.(2) Members of the advisory council shall not be current or previous employees, or current contractors, of an electrical corporation, as defined in Section 218 of the Public Utilities Code.(c) Members of the advisory council shall be entitled to per diem compensation and reimbursement of expenses for meetings, upon appropriation by the Legislature.25253. (a) For purposes of carrying out this chapter, the study team may do all of the following:(1) Consult with any stakeholders as needed or appropriate.(2) Request the production of books, records, correspondence, figures, charts, memoranda, papers, and documents, and other relevant materials of any nature from the commission, the Public Utilities Commission, and the IOUs.(b) For purposes of carrying out this chapter, the study team shall do all of the following:(1) Collaborate with the advisory council and the commission, through the Public Advocates Office, to host a minimum of four public hearings in geographically diverse regions of the IOUs service territories and during a variety of times to accommodate different work schedules.(2) In its specific findings, clarify all assumptions for findings and include citations to the original data or source for those assumptions.(c) A member of the study team may, if authorized by the prime consultant, take any action that the overall consultant team is authorized to take pursuant to this section.(d) On behalf of the commission, the study team may acquire directly from the head of a state agency available information that they consider useful in fulfilling their deliverables. All state agencies shall cooperate with the commission on behalf of the study team with respect to such information and shall furnish all information requested by the study team to the extent permitted by law. The study team shall keep confidential any information received from a state agency that is confidential or exempt from the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) or subject to a nondisclosure agreement.(e) As consultants to the commission, the study team shall have the administrative, technical, and legal assistance of the Department of Justice, the commission, the Public Utilities Commission, and the State Air Resources Board.(f) The study team may procure supplies and services by contract in accordance with applicable laws and rules.(g) The study team may enter into subcontracts for purposes of conducting research or surveys, preparing reports, and performing other activities necessary for the fulfillment of their research deliverables with state departments, agencies, and other instrumentalities of the state, federal departments, agencies, and other federal instrumentalities, and private entities. Subcontractors shall also meet the qualifications outlined in paragraph (1) of subdivision (c) of Section 25251.(h) For purposes of carrying out this chapter, the commission, through the Public Advocates Office, may do all of the following in service of completion of deliverables for the contract:(1) Hold hearings and sit and act at any time and location in California.(2) Consult with any issueholders as deemed necessary to achieve the objectives of this chapter.(3) Request the attendance and testimony of witnesses.(4) Seek an order from a superior court compelling testimony or compliance with a subpoena, including from the IOUs executive leadership.25254. The historical energy justice assessment component of the study described in Section 25251 shall assess the IOUs historical and ongoing operations and impacts on California residents, wildlife, and ecologies, with a focus on impacts to disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission, broken down by ZIP Code, income, race, age, and other relevant demographics. The assessment shall include, but is not limited to, all of the following:(a) An assessment and quantification of the distribution of health harms and reduced lifespans resulting from wildfires, polluting energy generation facilities, and infrastructure.(b) An assessment and quantification of the economic distribution of clean energy investments, incentives, and ownership.(c) An assessment of the impacts of rate increases and the extent and distribution of energy burdens based on historical rates.(d) An assessment of the distribution and quantity of utility disconnections, including disconnections due to lack of payment and public safety power shutoffs.(e) An assessment of the emotional, economic, ecological, and safety-related impacts from disasters caused by the IOUs, including, but not limited to, wildfires, pipeline explosions, power shutoffs, deenergization events, and the potential health impacts and lifespan reductions from those impacts.(f) An assessment of the pollution and other ecological impacts from energy generating infrastructure and the potential health impacts and lifespan reductions from those impacts.(g) An assessment of the extent and distribution of delayed or lack of provision of electricity and gas service and hookups.(h) An assessment of the liability incurred by, and during, the IOUs ownership, including specifying the portion of risks and liabilities likely to be transferred to a successor entity.(i) A quantification of the IOUs current tax obligations to the state.(j) An assessment of lands taken or received that were previously owned and stewarded by federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(k) An assessment of the IOUs historical and ongoing impacts on California wildlife, endangered species, and ecologies.(l) An assessment and audit of the IOUs capital expenditures and operating expenses to identify the cost-effectiveness of infrastructure investments.25255. (a) The comparative analysis of the benefits and challenges component of transitioning the IOUs to a recommended successor entity portion of the study described in paragraph (2) of subdivision (a) of Section 25251 shall provide a comparative assessment of transitioning the IOUs to either a public entity, nonprofit public benefit corporation, or mutual benefit corporation, assess the overall feasibility of transitioning the IOUs to a successor entity, and identify priority energy just design features for a successor entity.(b) The comparative analysis shall comprise all of the following:(1) An assessment of all legal, economic, financial, governance, and other relevant aspects of the ownership types required to successfully transition the assets and operations of the IOUs to a nonprofit public benefit corporation, such as Golden State Energy, a mutual benefit corporation, or a publicly owned electric utility, which may be in existence or yet to be formed.(2) An assessment of whether there are any structural limitations or advantages of each ownership type relative to the successor entitys ability to serve the people of California and to achieving the following policy objectives:(A) A demonstrable reduction in electricity costs for customers over a 30-year period, with a focus on increasing energy bill affordability for low-income communities, disadvantaged communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes, ensuring electricity costs are less than 3 percent of household income.(B) Increased opportunity for labor benefits through maintaining pensions and increasing benefits for workers, increasing good union jobs and inclusive workforce development in the region.(C) Increased public accountability, trust, and transparency in governing structures, financial spending, maintenance, and infrastructure decisions.(c) The feasibility assessment shall include all of the following:(1) Identification of legal and regulatory issues, and recommendations for addressing these issues, that might arise from transitioning the assets and operations of the IOUs and their respective operations as described in this chapter, and post-transition, in order to do all of the following:(A) Maintain the authority for the establishment of municipal utility districts, rural electric cooperatives, and tribal utilities, and ensure the successor entity cooperates with other public entities.(B) Safeguard or strengthen the worker and labor benefits, including union protections, during and after the transition period, and provide for workers rights and a just transition for workers impacted by the decommissioning of unsafe, polluting infrastructure.(C) By no later than 2032, safely decommission generation, transmission, and piping infrastructure transferred to the successor entity that is unsafe and polluting, prioritizing infrastructure that is causing disproportionate harms in disadvantaged communities, low-income communities, federally recognized California Indian tribes, or nonfederally recognized California Native American tribes.(D) Manage future wildfire liability.(E) Equitably decommission gas infrastructure and transition towards electrification, prioritizing the decommissioning of gas powerplants in disadvantaged communities and replacement with community-owned distributed energy resources without unduly burdening ratepayers, especially low-income or disadvantaged ratepayers, with associated costs.(2) A preliminary evaluation of the long-term costs and benefits over at least a 30-year horizon of a transfer in ownership to a successor entity, including an assumption for clean energy, electrification, and grid investments at a pace in accordance with state climate goals. This evaluation shall incorporate all of the following:(A) The potential for securitization of debt, including consideration of tax-exempt bonding for municipal utilities.(B) Consideration of the portion of utility capital expenses paid for by ratepayer contributions.(C) Application of all legally claimed depreciation of assets by the IOUs.(D) Equitable finance and revenue sources that may be available to the successor entity for its operational needs, including for purchase, maintenance, and upgrades, with information regarding all of the following:(i) Mechanisms to support the creditworthiness of the successor entity during the early years of operation.(ii) Access to bonds.(iii) Long-term opportunities for public financing.(iv) Ability to leverage federal funding in the form of elective pay, as outlined in the Inflation Reduction Act of 2022 (Public Law 117-169).(v) Options for revenue collected from rates and other financial resources.(3) A thorough consideration of which IOU assets should be prioritized for transfer and a timeline for those transfers, including all of the following:(A) The merits or risks of splitting ownership of the IOUs distribution infrastructure, transmission infrastructure, program administration, generation, and retail energy services.(B) The merits or risks of splitting ownership of the IOUs electrical and gas infrastructure.(C) The merits or risks of splitting ownership by geographic territory.(D) A full consideration of which assets to prioritize for transfer and a timeline for those transfers, including consideration of grid architectures that maximize distributed energy resources and future needs for distribution system operator infrastructure.(E) An evaluation of potential benefits, if any, that may be realized by separating the ownership and operation of the electrical distribution system for future distribution system operator models.(d) The identification of just design features for a successor entity and the mechanisms to realize them shall include, but not be limited to, all of the following:(1) The acknowledgment, rectification, and repair of prior harms, as found in the historical energy justice assessment pursuant to Section 25254.(2) Increasing social equity, electrical system reliability and performance, ecological sustainability, and climate resilience, including the ability to adapt to adverse climate-related weather disasters and other economic, social, and infrastructural crises.(3) Minimizing environmental health harms in the region and in homes.(4) Enhancing stewardship of finite resources and fragile ecologies through reducing the need for future large scale buildout, land clearing, or installation of ecologically disruptive energy generation, transmission, and distribution assets, and minimizing extraction of critical minerals.(5) Focusing on disadvantaged communities, low-income communities, federally recognized California Indian tribes, and nonfederally recognized California Native American tribes in decisionmaking processes.(6) Creating innovative participatory governance and accountability structures that enable community members, including low-income members and users with disabilities, to meaningfully impact the priorities of the successor entity.(7) Adopting mechanisms for sustained public engagement and transparency that holds the successor entity accountable to its mission to serve the communitys well-being.(8) Creating alternative mechanisms to utility disconnections to cover nonpayment by customers.(9) Including nonenergy impacts, social costs and benefits, health impacts, and more equitable climate outcomes in evaluating cost-effectiveness and decisionmaking.(10) Creating governance of the successor entity in a manner that maximizes public participation and energy democracy, including all of the following:(A) Whether members of the board of directors of the successor entity should be appointed pursuant to Part 2 (commencing with Section 3420) of Division 1.7 of the Public Utilities Code, elected by the customers of the successor entity, or a combination of appointees and elected members, and what type of expertise or experience should be represented.(B) Term limits for members of the board of directors.(C) Size and representation of the board of directors.(D) Involvement of, and robust funding of, technical assistance mechanisms to support community-based organizations in contributing to the decisions of the board of directors.(E) Adequate full-time staffing needs for the board of directors.(11) Requirements on the operations of the successor entity, including on all of the following:(A) Data collection by the successor entity and the public availability of collected data.(B) Public engagement and transparency, including all of the following:(i) Public engagement timelines and processes for rate cases, budget planning, and other policy and program approvals.(ii) Public meetings, notices, and comment periods.(iii) Relationships with local government, including reporting and communication requirements on projects undertaken by the successor entity with defined local economic benefits.25256. (a) Upon completion of the study components described in Sections 25254 and 25255, the study team, in consultation with the advisory council, consistent with Section 25252, shall recommend a particular successor entity ownership type to the commission for further feasibility review and implementation considerations.(b) On or before September 30, 2028, the commission, through a public process, shall vote to approve the study and recommended a particular successor entity ownership type based on a rubric comparing each of the successor entity ownership types to the incumbent IOU model using the following criteria:(1) Long-term affordability for the state and for ratepayers.(2) Safety.(3) Reliability.(4) Climate resilience.(5) Local economic benefits.(6) Health impacts.(7) Energy justice. 25257. (a) If the study, as approved by the commission, finds that it is in the best long-term interests of the people and ecologies of California to transition away from the investor-owned utility model, the study team shall begin work to create a justice-centered implementation plan, as described in paragraph (3) of subdivision (a) of Section 25251, to outline a timeline and transition process to the successor entity, including recommendations for which branches of government or agencies should be responsible and coordinate with which portions of the public to ensure the transition fairly minimizes burdens and unintended consequences and fairly maximizes benefits in service of the public interest and necessity.(b) The implementation plan shall identify all appropriate implementation mechanisms, including statutory changes that may be required, recommendations for specific bylaws, operating procedures, governance structures, or otherwise to ensure the successor entity is structured, operationalized, and has the proper authority and mandate to ensure more just outcomes, based in part on findings pursuant to Sections 25254 and 25255.(c) The implementation plan shall additionally do all of the following:(1) Recommend mechanisms to fairly set the acquisition cost and valuation in as legally defensible and timely manner as possible, with the goal of avoiding lengthy periods of litigation over the acquisition cost.(2) Recommend an appropriate regulatory structure to clearly delineate the relationship between the Public Utilities Commission and the successor entity, including consideration of an independent oversight body for the successor entity.(3) Provide for community benefit agreements and other local economic benefit and cost savings to the maximum extent possible for new infrastructure investments and maintenance, prioritizing clean distributed energy resources.(d) The commission, through a public process, shall vote to approve the implementation plan on or before October 31, 2029.SEC. 4. Section 706.5 is added to the Public Utilities Code, to read:706.5. (a) On or before April 1, 2026, each electrical corporation shall submit a proposed executive compensation structure to the commission that is structured to promote safety as a priority and to ensure public safety through performance metrics.(b) The performance metrics shall include, but not be limited to, all of the following:(1) Successful completion of vegetation management and wildfire mitigation plans.(2) Decommissioning risky electrical lines.(3) Building self-generation supported microgrids throughout the state, including in rural and remote areas of the state.(c) The commission shall approve the compensation structure if it meets the requirements of subdivision (b).SEC. 5. Section 748.3 is added to the Public Utilities Code, to read:748.3. (a) For a proposed rate increase subject to commission approval and a finding that the new rate is just and reasonable, an electrical corporation shall not propose a compounded annual rate increase on residential customers above the increase in the Consumer Price Index.(b) For proposed rate increases not subject to commission approval and a finding that the new rate is just and reasonable, an electrical corporation shall not propose more than one rate increase per year, and the rate increase shall not apply to California Alternate Rates for Energy program or Family Electric Rate Assistance program customers.(c) For purposes of this section, Consumer Price Index means the greater of the Consumer Price Index for the West Region, the Consumer Price Index for major cities, or the United States Consumer Price Index.SEC. 6. Section 748.5 of the Public Utilities Code is amended to read:748.5. (a) Except as provided in subdivision (c), subdivisions (c) and (d), the commission shall require revenues, including any accrued interest, received by an electrical corporation as a result of the direct allocation of greenhouse gas allowances to electric utilities pursuant to subdivision (b) of Section 95890 of Title 17 of the California Code of Regulations to be credited directly to the residential, small business, and emissions-intensive trade-exposed retail customers of the electrical corporation.(b) Not later than January 1, 2013, the commission shall require the adoption and implementation of a customer outreach plan for each electrical corporation, including, but not limited to, such measures as notices in bills and through media outlets, for purposes of obtaining the maximum feasible public awareness of the crediting of greenhouse gas allowance revenues. Costs associated with the implementation of this plan are subject to recovery in rates pursuant to Section 454.(c) The commission may allocate up to 15 percent of the revenues, including any accrued interest, received by an electrical corporation as a result of the direct allocation of greenhouse gas allowances to electrical distribution utilities pursuant to subdivision (b) of Section 95890 of Title 17 of the California Code of Regulations, for clean energy and energy efficiency projects established pursuant to statute that are administered by the electrical corporation, or a qualified third-party administrator as approved by the commission, and that are not otherwise funded by another funding source.(d) (1) Beginning with the fiscal year commencing July 1, 2026, and ending with the fiscal year ending June 30, 2036, from the revenues, including any accrued interest, received by an electrical corporation as a result of the direct allocation of greenhouse gas allowances to electrical distribution utilities pursuant to subdivision (b) of Section 95890 of Title 17 of the California Code of Regulations, the commission shall annually allocate one hundred million dollars ($100,000,000) to the Transformative Climate Communities Program (Part 4 (commencing with Section 75240) of Division 44 of the Public Resources Code) and annually allocate one hundred million dollars ($100,000,000) to the Community Resilience Center Program (Part 5 (commencing with Section 75250) of Division 44 of the Public Resources Code).(2) All moneys allocated for the Transformative Climate Communities Program and Community Resilience Center Program pursuant to this subdivision shall benefit disadvantaged communities in census tracts that are the most vulnerable to climate disaster, including, high wildfire risk areas and areas with power shutoff, flooding, and climate vulnerabilities.SEC. 7. Section 3289 of the Public Utilities Code is amended to read:3289. (a) (1) No later than July 26, 2019, the commission shall initiate a rulemaking proceeding to consider using its authority pursuant to Section 701 to require each electrical corporation, except a regional electrical corporation that chooses not to participate in any fund pursuant to Chapter 3 (commencing with Section 3291), to collect a nonbypassable charge from ratepayers of the electrical corporation to support the fund, including the payment of any bonds issued pursuant to Division 28 (commencing with Section 80500) of the Water Code, as follows:(A) For a large electrical corporation, a charge in an amount sufficient to fund the revenue requirement, as established pursuant to Section 80524 of the Water Code.(B) For a regional electrical corporation, the amount equal to one-half cent per kilowatt-hour ($0.005/kWh).(2) If the commission determines that the imposition of the charge described in paragraph (1) is just and reasonable, and that it is appropriate to exercise its authority pursuant to Section 701 to do so, the commission shall direct each electrical corporation to impose and collect that charge commencing in the month immediately following the month in which the final imposition of the revenue requirement with respect to bonds previously issued pursuant to Division 27 (commencing with Section 80000) of the Water Code is made. The charge shall be collected in the same manner as that for the payments made to reimburse the Department of Water Resources pursuant to Division 27 (commencing with Section 80000) of the Water Code.(b) Notwithstanding any other law, no later than 90 days after the initiation of the rulemaking proceeding, the commission shall adopt a decision regarding the imposition of the charge.(c) (1) Notwithstanding Section 455.5 or 1708, or any other law, the commission shall not revise, amend, or otherwise modify a decision to impose a charge made pursuant to this section at any time before January 1, 2036.(2) Notwithstanding paragraph (1), the commission shall revise the decision adopted pursuant to subdivision (b) to reduce the charge imposed on ratepayers pursuant to subdivision (a) to an amount equal to 5 percent of the costs to support the fund, and require each electrical corporation to contribute the remaining 95 percent of the costs to support the fund.(d) If the administrator authorizes Golden State Energy to participate in the fund pursuant to subdivision (d) of Section 3292, Golden State Energys ratepayers shall be subject to the nonbypassable charge previously imposed by the commission pursuant to this section.SEC. 8. Section 3292 of the Public Utilities Code is amended to read:3292. (a) If, no later than July 27, 2019, each large electrical corporation not subject to an insolvency proceeding on July 12, 2019, notifies the commission of its commitment to provide the initial contribution and the annual contributions, and subsequently provides its initial contribution as set forth in paragraph (3) of subdivision (b), the fund shall be established to pay eligible claims as set forth in subdivision (f) and obtain reimbursement from electrical corporations as set forth in subdivision (h).(b) Except as provided in subdivision (d), to participate in the fund established pursuant to subdivision (a), an electrical corporation shall satisfy the following conditions by no later than June 30, 2020:(1) The electrical corporation is not, and has not been since July 12, 2019, the subject of an insolvency proceeding or on criminal probation unless the electrical corporation meets the following conditions:(A) The electrical corporations insolvency proceeding has been resolved pursuant to a plan or similar document not subject to a stay.(B) The bankruptcy court or a court of competent jurisdiction, in the insolvency proceeding, has determined that the resolution of the insolvency proceeding provides funding or establishes reserves for, provides for assumption of, or otherwise provides for satisfying any prepetition wildfire claims asserted against the electrical corporation in the insolvency proceeding in the amounts agreed upon in any pre-insolvency proceeding settlement agreements or any post-insolvency settlement agreements, authorized by the court through an estimation process or otherwise allowed by the court.(C) The commission has approved the reorganization plan and other documents resolving the insolvency proceeding, including the electrical corporations resulting governance structure as being acceptable in light of the electrical corporations safety history, criminal probation, recent financial condition, and other factors deemed relevant by the commission.(D) The commission has determined that the reorganization plan and other documents resolving the insolvency proceeding are (i) consistent with the states climate goals as required pursuant to the California Renewables Portfolio Standard Program and related procurement requirements of the state and (ii) neutral, on average, to the ratepayers of the electrical corporation.(E) The commission has determined that the reorganization plan and other documents resolving the insolvency proceeding recognize the contributions of ratepayers, if any, and compensate them accordingly through mechanisms approved by the commission, which may include sharing of value appreciation.(2) For a regional electrical corporation, it has voluntarily established a charge required by the commission pursuant to Section 3289. This charge shall be included on monthly bills for customers. Collections on that charge shall be remitted, on a monthly basis, to the administrator for deposit into the fund.(3) Except as provided in subdivision (e), the electrical corporation has provided its initial contribution to the fund no later than September 10, 2019. Initial contributions shall not be recovered from the ratepayers of an electrical corporation, except Golden State Energy.(c) Each participating electrical corporation shall make its annual contribution by January 1 of each calendar year, including, without limitation, any annual contributions for calendar years in which the electrical corporation, or another electrical corporation to which the electrical corporation is the successor, was not a participating electrical corporation. Annual contributions shall not be recovered from the ratepayers of an electrical corporation, except Golden State Energy.(d) (1) The administrator may, and in the case of Golden State Energy shall, authorize an electrical corporation that is formed after July 12, 2019, to participate in the fund if the administrator determines that the electrical corporation meets the requirements of this section. Authorization of an electrical corporation that is formed after July 12, 2019, shall be effective as of a date determined by the administrator and shall apply to covered wildfires after the date of authorization.(2) If Golden State Energy is the successor to Pacific Gas and Electric Company and Pacific Gas and Electric Company made its initial contribution and, if applicable, annual contributions to the fund, the administrator shall not require Golden State Energy to commit to making, or make, its own initial contribution, or annual contributions for a period for which Pacific Gas and Electric Company already made its annual contributions, in order to participate in the fund and the administrator shall authorize Golden State Energy to participate in the fund if Golden State Energy, within 15 days of closing of the acquisition of Pacific Gas and Electric Company, notifies the commission of its commitment to make annual contributions to the fund.(e) An electrical corporation that is the subject of an insolvency proceeding on July 12, 2019, that wishes to participate in the fund shall (1) no later than July 27, 2019, provide written notification to the commission of its election to participate in the fund, and (2) no later than September 10, 2019, obtain approval from the bankruptcy court or a court of competent jurisdiction of its determination to pay, and approval of its payment of, the initial contribution and, as they become due, annual contributions to the fund, provided that the contributions shall not be due to the fund until the date the electrical corporation exits the insolvency proceeding. The electrical corporation shall not be entitled to seek payments from the fund pursuant to subdivision (f) until it has funded its initial contribution and has met the other conditions provided in subdivision (b). Participation of an electrical corporation that is the subject of an insolvency proceeding that satisfies the requirements of this subdivision shall be effective as of July 12, 2019, and shall apply to covered wildfires, provided that the fund shall not pay more than 40 percent of the allowed amount of a claim arising between July 12, 2019, and the date the electrical corporation exits bankruptcy, with the balance of those claims being addressed through the insolvency proceeding.(f) (1) An electrical corporation meeting the applicable requirements of subdivision (b) may seek payment from the fund to satisfy settled or finally adjudicated eligible claims. Only eligible claims shall be made against or paid by the fund. In accordance with the procedures established by the administrator, the administrator shall review and approve any settlement of an eligible claim as being in the reasonable business judgment of the electrical corporation before releasing funds to the electrical corporation for payment. Settlements of subrogation claims that are less than or equal to 40 percent of total asserted claim value as determined by the administrator shall be paid unless the administrator finds that the exceptional facts and circumstances surrounding the underlying claim do not justify the electrical corporations exercise of such business judgment. To the extent approved by the administrator, a settlement shall not be subject to further review by the commission.(2) The administrator shall approve a settlement of an eligible claim that is a subrogation claim if the settlement exceeds 40 percent of the total asserted claim value, as determined by the administrator, and includes a full release of the balance of the asserted claim so long as the administrator finds that the electrical corporation exercised its reasonable business judgment in determining to settle for a higher percentage or on different terms based on a determination that the specific facts and circumstances surrounding the underlying claim justify a higher settlement percentage or different terms. A subrogation claim that is finally adjudicated shall be paid in the full judgment amount.(g) Except for Golden State Energy, all initial and annual contributions shall be excluded from the measurement of the authorized capital structure.(h) (1) Except as provided in paragraph (2), within six months after the commission adopts a decision in an application filed pursuant to Section 1701.8, the electrical corporation shall reimburse the fund for the full amount of costs and expenses the commission determined were disallowed pursuant to Section 1701.8.(2) (A) The obligation of an electrical corporation to reimburse the fund shall be the lesser amount of subparagraph (B) or (C).(B) The costs and expenses determined not to be just and reasonable pursuant to Section 1701.8.(C) The amount determined pursuant to clause (i) minus the amount determined pursuant to clause (ii).(i) (I) Except as specified in subclause (II), for each electrical corporation, 20 percent of the electrical corporations total transmission and distribution equity rate base, including, but not limited to, its Federal Energy Regulatory Commission (FERC) assets, as determined by the administrator for the calendar year in which the disallowance occurred.(II) For Golden State Energys first twelve months of participation in the fund, an amount equal to 20 percent of Pacific Gas and Electric Companys total transmission and distribution equity rate base, including, but not limited to, its Federal Energy Regulatory Commission assets, at the time of the closing of the acquisition of Pacific Gas and Electric Company, as determined by the commission. For Golden State Energys subsequent years of participation in the fund, an amount determined by the commission that is equivalent to the amount specified in subclause (I) for electrical corporations with an equity rate base.(ii) The sum of (I) the amounts actually reimbursed to the fund for costs and expenses that were determined not to be just and reasonable pursuant to Section 1701.8 during the measurement period, added to (II) the amount of any reimbursements to the fund owed by the electrical corporation for costs and expenses disallowed during the measurement period that have not yet been paid.(iii) For purposes of this subparagraph, measurement period means the period of three consecutive calendar years ending on December 31 of the year in which the calculation is being performed.(D) The administrator shall publish calculations of the amounts determined pursuant to subparagraphs (B) and (C) on or before January 1 of each calendar year for each electrical corporation.(E) Except as provided in paragraph (3), the electrical corporation shall not be required to reimburse the fund for any additional amounts in any three-calendar-year period.(F) The limitation set forth in this section shall apply only so long as the fund has not been terminated pursuant to subdivision (i).(3) Paragraph (2) does not apply under either of the following circumstances:(A) If the administrator determines that the electrical corporations actions or inactions that resulted in the covered wildfire constituted conscious or willful disregard of the rights and safety of others. For purposes of this subparagraph, evidence that the electrical corporations actions were prudent shall include common sense best practices such as conducting annual audits and replacing equipment that has outlived its usable life pursuant to Section 8386.7, and deenergizing the electrical grid under threatening conditions.(B) If the electrical corporation failed to maintain a valid safety certification on the date of the ignition.(i) (1) The administrator shall, to the extent practicable, manage the fund to prioritize the use of electrical corporation contributions before the use of ratepayer contributions.(2) The fund shall terminate when the administrator determines that the fund resources are exhausted, taking into account the amount of any unpaid liabilities including necessary reserves, any remaining unpaid annual contributions from participating electrical corporations, and the charges authorized pursuant to Section 3289. Upon the determination of the administrator that the fund shall be terminated, the administrator shall pay all remaining eligible claims and fund expenses, and liquidate any remaining assets. The remaining funds shall be transferred to the General Fund. It is the intent of the Legislature that any funds transferred to the General Fund pursuant to this paragraph shall be appropriated to support wildfire mitigation.(j) Notwithstanding subdivision (f), a regional electrical corporations access to the fund to pay eligible claims shall be limited to three times the sum of the regional electrical corporations initial contribution and any funded annual contributions per covered wildfire.SEC. 9. Section 8386.7 is added to the Public Utilities Code, to read:8386.7. (a) Each electrical corporation shall annually contract with an independent and reputable third party to audit all of the electrical corporations equipment and electrical lines and identify any equipment or electrical lines that have outlived their useable life. The audit shall be completed on or before June 30, 2026, and by June 30 of each year thereafter, and submitted to the commission on or before August 31 of each year.(b) (1) An electrical corporation shall replace equipment and electrical lines identified by the independent third-party auditor pursuant to an audit described in subdivision (a) that are located in a high fire risk area within five years of the audit.(2) Equipment and electrical lines that are replaced pursuant to paragraph (1) shall be undergrounded. An electrical corporation shall not pass on the cost of undergrounding equipment pursuant to this paragraph to the ratepayers unless the commission determines that the electrical corporations earnings before interest and taxes for the previous year, multiplied by five as a basis for potential earnings before interest and taxes for the next five years, cannot fund the undergrounding work, in which case the commission shall determine what the minimal passthrough to ratepayers may be.(3) If it is more cost effective and meets the overall electrical grid needs, an electrical corporation may install microgrid technology instead of replacing equipment and electrical lines pursuant to paragraph (1).(c) (1) The commission shall assess a fine on an electrical corporation that fails to comply with this section, as follows:(A) The commission shall assess a fine on an electrical corporation that fails to complete an annual audit pursuant to subdivision (a) in an amount equal to 1 percent of the electrical corporations gross revenue for the preceding year. For each subsequent year that an electrical corporation fails to complete an annual audit the fine amount shall be increased to an amount equal to 3 percent of the electrical corporations gross revenue for the preceding year.(B) The commission shall assess a fine on an electrical corporation that fails to replace equipment pursuant to subdivision (b). The fine shall be, at minimum, the estimated cost of the replacement plus 10 percent, as determined by the third-party auditor. (2) Fines collected pursuant to this subdivision shall be used to finance needed repairs. Any excess funds available after needed repairs may be transferred to a future maintenance and repair budget.SEC. 10. Section 8388.5 of the Public Utilities Code is amended to read:8388.5. (a) The commission shall establish an expedited utility distribution infrastructure undergrounding program consistent with this section.(b) Only a All large electrical corporation may corporations shall participate in the program.(c) In order to participate in the program, a large electrical corporation shall submit to the office a distribution infrastructure undergrounding plan that shall address or include, at minimum, all of the following components:(1) A 10-year plan for undergrounding distribution infrastructure.(2) Identification of the undergrounding projects that will be constructed as part of the program, including a means of prioritizing undergrounding projects based on wildfire risk reduction, public safety, cost efficiency, and reliability benefits. Only undergrounding projects located in tier 2 or 3 high fire-threat districts or rebuild areas may be considered and constructed as part of the program.(3) Timelines for the completion of identified and prioritized undergrounding projects, and unit cost targets and mileage completion targets for each year covered by the plan.(4) A comparison of undergrounding versus aboveground hardening of electrical infrastructure and wildfire mitigation for achieving comparable risk reduction, or any other alternative mitigation strategy, such as covered conductor and rapid earth fault current limiter devices, for those prioritized undergrounding projects, evaluating the scope, cost, extent, and risk reduction of each activity, separately and collectively, over the duration of the plan. The comparison shall emphasize risk reduction and include an analysis of the cost of each activity for reducing wildfire risk, separately and collectively, over the duration of the plan.(5) A plan for utility and contractor workforce development.(6) An evaluation of project costs, projected economic benefits over the life of the assets, and any cost containment assumptions, including the economies of scale necessary to reduce wildfire risk and mitigation costs and establish a sustainable supply chain.(d) Upon a large electrical corporation submitting a plan to the office, the office shall do both of the following:(1) Publish the plan for public comment.(2) Within nine months, review and approve or deny the plan. The office may only approve the plan if the large electrical corporation has shown that the plan will substantially increase electrical reliability by reducing the use of public safety power shutoffs, enhanced powerline safety settings, deenergization events, and any other outage programs, and substantially reduce the risk of wildfire. Before approving the plan, the office may require the large electrical corporation to modify the plan.(e) (1) Upon the office approving a plan pursuant to paragraph (2) of subdivision (d), the large electrical corporation shall, within 60 days, submit to the commission a copy of the plan and an application requesting review and conditional approval of the plans costs and including all of the following:(A) Any substantial improvements in safety risk and reduction in costs compared to other hardening and risk mitigation measures over the duration of the plan.(B) The cost targets, at a minimum, that result in feasible and attainable cost reductions as compared to the large electrical corporations historical undergrounding costs.(C) How the cost targets are expected to decline over time due to cost efficiencies and economies of scale.(D) A strategy for achieving cost reductions over time.(2) The assigned commissioner may waive the requirements of subdivisions (b), (d), (f), and (i) of Section 1701.3 for an application submitted to the commission pursuant to paragraph (1).(3) In reviewing an application submitted to the commission pursuant to paragraph (1), the commission shall consider not revisiting cost or mileage completion targets approved, or pending approval, in the electrical corporations general rate case or a commission-approved balancing account ratemaking mechanism for system hardening.(4) Upon the commission receiving an application pursuant to paragraph (1), the commission shall facilitate a public workshop for presentation of the plan and take public comment for at least 30 days.(5) On or before nine months, the commission shall review and approve or deny the application. Before approving the application, the commission may require the large electrical corporation to modify or modify and resubmit the application.(6) The commission shall consider continuing an existing commission-approved balancing account ratemaking mechanism for system hardening for the duration of a plan, as determined by the commission, and shall authorize recovery of recorded costs that are determined to be just and reasonable.(f) If the plan is approved by the office and commission, the large electrical corporation shall do all of the following:(1) Every six months, file a progress report with the office and the commission. The large electrical corporation and the office shall publish these progress reports on their internet websites.(2) Include ongoing work plans and progress in annual wildfire mitigation plan filings.(3) Hire an independent monitor, selected by the office, to review and assess the large electrical corporations compliance with its plan and submit a report with the office each December 1 over the course of the plan.(g) (1) In reviewing and assessing the large electrical corporations compliance with its plan pursuant to paragraph (3) of subdivision (f), the independent monitor shall assess whether the large electrical corporations progress on undergrounding work has been consistent with the objectives identified in its plan. The independent monitors report shall specify any failure, delays, or shortcomings of the large electrical corporation and provide recommendations for improvements to accomplish the objectives set forth in the plan.(2) The large electrical corporation shall have 180 days to correct and eliminate any deficiency specified in the independent monitors report.(3) On or before December 1 of each year the plan is in effect, the independent monitor shall submit the report to the office.(h) The office shall publish reports received pursuant to paragraph (3) of subdivision (g) on its internet website.(i) (1) The office shall consider the independent monitors report and whether the large electrical corporation has cured any deficiencies, and may recommend penalties to the commission.(2) The commission may assess penalties on a large electrical corporation that fails to substantially comply with a commission decision approving its plan.(j) Each large electrical corporation participating in the program shall apply for available federal, state, and other nonratepayer moneys throughout the duration of its approved undergrounding plan, and any moneys received as a result of those applications shall be used to reduce the programs costs on the large electrical corporations ratepayers.SEC. 11. Section 8388.6 is added to the Public Utilities Code, to read:8388.6. After an emergency or disaster in which an electrical corporations electrical infrastructure was destroyed, the electrical corporation shall rebuild the destroyed electrical infrastructure using undergrounding methods, to the extent applicable. The cost of undergrounding electrical infrastructure pursuant to this section shall not be recovered from ratepayers.SEC. 12. Chapter 10 (commencing with Section 8450) is added to Division 4.1 of the Public Utilities Code, to read: CHAPTER 10. Utility Service Disconnections8450. The Legislature finds and declares all of the following:(a) Access to electricity and heating services is a human right that no one should be deprived of due to an inability to pay.(b) Electricity is essential to the health, safety, and welfare of the people of this state and to the states economy.(c) It is the responsibility of state government to ensure that a reliable supply of electricity is maintained at a level consistent with the need for the electricity to protect public health and safety, promote the general welfare, and protect environmental quality.(d) Gas and electrical service shutoffs threaten the health of infants, children, the elderly, low-income families, communities of color, people for whom English is a second language, physically disabled persons, and persons with life-threatening medical conditions.(e) Section 779.3 of the Public Utilities Code prohibits a gas or electrical corporation from disconnecting service for nonpayment by a residential customer receiving a medical baseline allowance when the customer or a member of the customers household is under hospice care at home, depends upon life-support equipment, or has a life-threatening condition or illness.(f) Public Utilities Commission Decision 20-06-003 (June 16, 2020), Phase I Decision Adopting Rules and Policy Changes to Reduce Residential Customer Disconnections for the Larger California-Jurisdictional Energy Utilities, prohibits large investor-owned utilities from doing both of the following:(1) Disconnecting residential customers when temperatures above 100 degrees or below 32 degrees are forecasted based on a 72-hour look-ahead period.(2) Disconnecting residential customers who currently have Low-Income Home Energy Assistance Program pledges pending.(g) In response to the COVID-19 pandemic, Public Utilities Commission Resolution M-4842 (April 17, 2020), Emergency Authorization and Order Directing Utilities to Implement Emergency Customer Protections to Support California Customers During the COVID-19 Pandemic, required electrical and gas utilities to suspend disconnection for nonpayment, commonly known as the COVID-19 disconnection moratorium.(h) The COVID-19 disconnection moratorium ended in September 2021, but California investor-owned utilities began disconnecting their customers for nonpayment in August 2022.(i) From August 2022 to August 2024, Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas and Electric Company collectively disconnected their customers for nonpayment 412,787 times.(j) From August 2022 to August 2024, Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas and Electric Company also compensated their shareholders with $7,620,000,000 in dividends. During that period, the estimated cost to prevent all residential shutoffs for nonpayment was seventy-seven hundredths of 1 percent of that compensation to shareholders.8451. For purposes of this chapter, the following definitions apply:(a) Adult means a person 18 years of age or older.(b) Economic unit means all adults contributing to and sharing in the income and expenses of a household.(c) Electrical corporation has the same meaning as defined in Section 218.(d) Gas corporation has the same meaning as defined in Section 222.(e) Household means a residential address shared by a group of adults, including the utility customer, and children who are living together at that address as one economic unit. A household may contain related and unrelated persons. If an adult has no, or minimal, income and lives with an adult who provides financial support to that adult, both adults are part of the same household. A child under 18 years of age and living with a parent or guardian is part of the same household as the parent or guardian.(f) Local publicly owned electric utility has the same meaning as defined in Section 224.3.(g) Residential service means the provision of electrical or natural gas service to a residential connection at a single-family residence, a multifamily residence, a mobilehome, including, but not limited to, a mobilehome in a mobilehome park, or farmworker housing.(h) Utility means an electrical corporation, local publicly owned electric utility, gas corporation, or local publicly owned gas utility.8452. (a) A utility shall not disconnect a customers residential service for nonpayment if the customers household is the residence of any of the following persons:(1) A child five years of age or younger, regardless of the customers relationship with the child.(2) A person 65 years of age or older.(3) A person with a disability, consistent with subdivision (d).(4) A person with a medical condition, consistent with subdivision (d).(5) A person who is pregnant or 0 to 12 weeks postpartum, consistent with subdivision (e).(b) (1) A utility shall not disconnect a customers residential service for nonpayment if the customer has a household income at or below 200 percent of the federal poverty line.(2) For purposes of paragraph (1), a utility shall deem a residential customer to have a household income below 200 percent of the federal poverty line if any member of the household is a current recipient of a benefit or discount pursuant to one or more of the following programs, or if the customer declares that the households annual income is less than 200 percent of the federal poverty level:(A) The California Alternative Rates for Energy (CARE) program, as described in Section 739.1.(B) The CalWORKS program, as described in Chapter 2 (commencing with Section 11200) of Part 3 of Division 9 of the Welfare and Institutions Code.(C) CalFresh, as described in Section 18900.2 of the Welfare and Institutions Code.(D) General assistance, as described in Part 5 (commencing with Section 17000) of Division 9 of the Welfare and Institutions Code.(E) Medi-Cal, as described in Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code.(F) Federal Supplemental Security Income, as described in Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.).(G) The State Supplementary Payment Program, as described in Chapter 3 (commencing with Section 12000) of Part 3 of Division 9 of the Welfare and Institutions Code.(H) The California Special Supplemental Nutrition Program for Women, Infants, and Children, as described in Section 123280 of the Health and Safety Code.(c) On and after January 1, 2026, each electrical corporation and gas corporation shall automatically reconnect all households that are eligible for protection under subdivision (a) or (b) that had their residential service disconnected due to nonpayment.(d) (1) In order for the prohibition described in paragraph (3) or (4) of subdivision (a) to apply to a customers residential service, the customer, or a member of the customers household, shall notify the utility that the prohibition applies. The customer, or a member of the customers household, shall verify the prohibitions applicability by submitting to the utility, within three weeks after their latest disconnection notice, a certification from a primary care provider that the discontinuation of residential service will be life threatening to, aggravate an existing medical condition of, or pose a serious threat to the health and safety of, a resident of the household where the residential service is provided. Upon receipt of the certification and while verifying the certification, the utility shall not disconnect the customers service or the service of a member of the customers household.(2) Notwithstanding paragraph (1), the customer, or a member of the customers household, may automatically establish the applicability of the prohibitions described in paragraphs (3) or (4) of subdivision (a) without submitting a certification from a primary care provider if the customer, or member of the customers household, participates in the Medical Baseline Program.(e) If a customer, or a member of the customers household, is protected from disconnections pursuant to paragraph (5) of subdivision (a), the customer or member shall submit to the utility the certification of a primary care provider that the customer or member is pregnant or postpartum.8453. (a) Each utility shall notify its residential customers of the prohibitions described in subdivisions (a) and (b) of Section 8452 by doing all of the following:(1) Posting the prohibitions in a publicly available location on the utilitys internet website, if the utility has an internet website.(2) Providing the prohibitions, in writing, to the utilitys residential customers at least twice per year, including before the onset of the summer and winter seasons.(3) Including the prohibitions on each residential customers utility bill.(4) Including the prohibitions on each new residential customers first utility bill.(b) All written notices required pursuant to subdivision (a) shall be provided in English, the languages listed in Section 1632 of the Civil Code, and any other language spoken by 10 percent or more of the customers in the utilitys service area.(c) Each utility that has an internet website shall create an online reporting system available through its internet website that enables its residential customers to report when their residential service has been disconnected in violation of subdivision (a) or (b) of Section 8452. The utility shall promptly respond to reports filed through its online reporting system and shall disclose a violation to the commission.8454. (a) A utility shall offer a residential customer who meets the requirements of subdivision (a) or (b) of Section 8452 a payment plan for the customers electricity or gas service that is provided by the utility, including a percentage of income payment plan, as authorized by the commission in commission Decision 21-10-012 (October 11, 2021), Decision Authorizing Percentage of Income Payment Plan Pilot Programs, in which customers are subject to a monthly bill cap set at a percentage of household income not to exceed 4 percent of household income or one-twelfth of the combined amount of the customers electricity and gas bills immediately before the customers enrollment in the payment plan required to be offered by the utility pursuant to this section, whichever is lower.(b) A residential customer subject to the payment plan shall not be financially responsible for any costs of providing electrical service or gas service exceeding the customers payment plan amount.(c) A utility subject to the disconnection prohibition described in Section 8452 shall be subject to both of the following provisions:(1) The utility shall not disconnect a residential customer described in subdivision (a) or (b) of Section 8452 due to lack of participation in a payment plan described in subdivision (a).(2) The utility may report to a credit reporting agency that a customers outstanding balances are delinquent only if the customer declines to participate in a payment plan or fails to pay in full the amounts due under a payment plan on three separate occasions during the terms of a payment plan described in this section or another payment plan offered by the utility.8455. (a) The commission shall establish a citation program to impose a penalty on an electrical corporation or gas corporation that violates Section 8452.(b) (1) The commission may bring an action in state court for equitable relief regarding an electrical corporations or gas corporations use of a method, act, or practice inconsistent with this chapter.(2) A customer, or a member of the customers household, may bring an action in state court for equitable relief regarding a utilitys or community choice aggregators use of a method, act, or practice inconsistent with this chapter.8456. (a) (1) Each utility providing electrical service or gas service, or both, to residential customers shall collect and submit to the commission monthly data on electrical and gas service terminations, reconnections, bill assistance and payment agreements, arrears, and created and broken payment plans.(2) When collecting and submitting to the commission the monthly data described in paragraph (1), those utilities shall do both of the following:(A) Use metrics that replicate the data provided in the monthly disconnect data reports authorized by the commission pursuant to commission Decision 18-12-013 (December 13, 2018), Decision Adopting Interim Rules to Reduce Residential Customer Disconnections for California-Jurisdictional Energy Utilities.(B) Aggregate electrical and gas service termination and reconnection data by ZIP Code, similar to the monthly disconnect data reports authorized by the commission pursuant to commission Decision 18-12-013 (December 13, 2018), Decision Adopting Interim Rules to Reduce Residential Customer Disconnections for California-Jurisdictional Energy Utilities.(b) The commission shall either include the data as monthly filings in commission Rulemaking 18-07-005 (July 12, 2018), Order Instituting Rulemaking to Consider New Approaches to Disconnections and Reconnections to Improve Energy Access and Contain Costs, or create a new page on the commissions internet website that clearly collects and presents all of the data submitted to the commission pursuant to this section.8457. (a) This chapter does not apply to utility actions related to wildfire prevention or other safety measures, including public safety power shutoffs or deenergization events.(b) This chapter does not apply to unintentional service disruptions or outages.SEC. 13. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act or because costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution. |
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| 112 | 88 | | The people of the State of California do enact as follows: |
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| 114 | 90 | | ## The people of the State of California do enact as follows: |
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| 116 | 92 | | SECTION 1. This act shall be known, and may be cited, as the Investor-Owned Utilities Accountability Act. |
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| 118 | 94 | | SECTION 1. This act shall be known, and may be cited, as the Investor-Owned Utilities Accountability Act. |
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| 120 | 96 | | SECTION 1. This act shall be known, and may be cited, as the Investor-Owned Utilities Accountability Act. |
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| 121 | 97 | | |
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| 122 | 98 | | ### SECTION 1. |
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| 124 | 100 | | SEC. 2. The Legislature finds and declares all of the following:(a) Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), San Diego Gas and Electric Company (SDG&E), and SoCalGas, which have collectively exercised their monopoly over California ratepayers for over 100 years, have lost the trust of the people of California due to their crushingly high rates, exorbitant payouts to executives and shareholders, reckless endangerment of life and property, and excessive spending with the goal of generating profits rather than providing an essential service.(b) Rates are higher in investor-owned utility (IOU) service territories across California than in not-for-profit utilities, including municipal utilities, rural electric cooperatives, and tribal utilities, which has resulted in working class and low-income people paying higher rates. On average, California IOU electricity rates are more than 50 percent higher than rates charged by publicly owned utilities. For IOU customers in California, rates have increased nearly 50 percent over the past three years.(c) Under the current system, most distribution and transmission infrastructure is financed by IOUs and paid for by utility ratepayers. Ratepayers also pay for a rate of return for the IOUs for each project, which can average close to 10 percent. This guaranteed return on investment rate creates a significant and increasingly unsustainable burden on ratepayers as more unnecessary transmission lines are constructed. This can result in unnecessary rate hikes for consumers, as capital expenses can be overestimated and overspent to increase profits. As an example, in the 2023 General Rate Case, PG&E admitted that they overestimated the actual cost of infrastructure needed by $3 billion. Despite electricity demand remaining stable, executive compensation, infrastructure spending, and customer rates continue to increase. While utilities submit new rate increase proposals on a roughly three- to four-year cycle to the Public Utilities Commission, they can also submit annual increases and emergency supplements. The compounding effect and increased frequency of these rate increases, largely related to wildfire emergencies, have unfairly burdened California residents. Specifically, from January 2021 to October 2024, inclusive, PG&E residential rates increased by 56 percent, SCE rates increased by 48 percent, and SDG&E rates increased by 21 percent.(d) These increasing rate hikes and record profits are a function of the IOUs being unwilling to adequately serve their ratepayers through affordable utility rates. One in five households served by the states largest IOUs are in utility debt. From August 2022 to August 2024, inclusive, PG&E, SCE, and SDG&E also compensated their shareholders with $7.62 billion in dividends. During that period, the estimated cost to prevent all residential shutoffs for nonpayment was seventy-seven one hundredths of 1 percent of that compensation to shareholders.(e) The IOUs have caused some of Californias most destructive wildfires. PG&E is responsible for more than 30 wildfires since 2017 that have destroyed more than 23,000 homes and businesses and killed more than 100 people. These fires include the 2017 Tubbs Fire, the 2018 Camp Fire, the 2019 Kincade Fire, the 2020 Zogg Fire, and the 2021 Dixie Fire. SCE was found responsible for burning more than 385,000 acres, destroying thousands of structures, and causing five deaths in the 2017 Rye Fire, the 2017 Meyers Fire, the 2017 Liberty Fire, the 2017 Thomas Fire, and the 2018 Woolsey Fire. In 2007, SDG&E caused three fires, the Witch Fire, the Guejito Fire, and the Rice Fire, burning 207,000 acres, killing two people, destroying 1,141 homes. Assembly Bill 1054 (Chapter 79 of the Statutes of 2019) established a wildfire insurance fund of $21 billion, all passed onto ratepayer bills, directly and indirectly.(f) Past and present experience demonstrates that the IOUs prioritize profits over the safety and well-being of the ratepayers and residents of California, and thus, to support public necessity and public purpose, must be replaced with a well-researched and structured successor entity that focuses on the needs of ratepayers, workers, fire survivors, and community members instead of shareholders.(g) The State of California created the not-for-profit public benefit corporation, Golden State Energy, designated as a receiver for PG&Es assets, through passing Senate Bill 350 (Chapter 27 of the Statutes of 2020) for the purpose of owning, controlling, operating, or managing electrical and gas services for its ratepayers, for the benefit of all Californians if PG&E were to lose its business license in a six-step accountability process overseen by the Public Utilities Commission. At that time, PG&E was in bankruptcy due to an untenable amount of liabilities for wildfires caused by its equipment. Senate Bill 350 created a successor in name only and was never in a position to receive PG&E assets. This bill builds on Senate Bill 350 by authorizing an in-depth unbiased study by a neutral third party to assess the practical, financial, legal, regulatory, labor, and technical aspects of a smooth and just transition away from the IOU model to one that prioritizes the needs of the people and ecology of the State of California. |
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| 125 | 101 | | |
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| 126 | 102 | | SEC. 2. The Legislature finds and declares all of the following:(a) Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), San Diego Gas and Electric Company (SDG&E), and SoCalGas, which have collectively exercised their monopoly over California ratepayers for over 100 years, have lost the trust of the people of California due to their crushingly high rates, exorbitant payouts to executives and shareholders, reckless endangerment of life and property, and excessive spending with the goal of generating profits rather than providing an essential service.(b) Rates are higher in investor-owned utility (IOU) service territories across California than in not-for-profit utilities, including municipal utilities, rural electric cooperatives, and tribal utilities, which has resulted in working class and low-income people paying higher rates. On average, California IOU electricity rates are more than 50 percent higher than rates charged by publicly owned utilities. For IOU customers in California, rates have increased nearly 50 percent over the past three years.(c) Under the current system, most distribution and transmission infrastructure is financed by IOUs and paid for by utility ratepayers. Ratepayers also pay for a rate of return for the IOUs for each project, which can average close to 10 percent. This guaranteed return on investment rate creates a significant and increasingly unsustainable burden on ratepayers as more unnecessary transmission lines are constructed. This can result in unnecessary rate hikes for consumers, as capital expenses can be overestimated and overspent to increase profits. As an example, in the 2023 General Rate Case, PG&E admitted that they overestimated the actual cost of infrastructure needed by $3 billion. Despite electricity demand remaining stable, executive compensation, infrastructure spending, and customer rates continue to increase. While utilities submit new rate increase proposals on a roughly three- to four-year cycle to the Public Utilities Commission, they can also submit annual increases and emergency supplements. The compounding effect and increased frequency of these rate increases, largely related to wildfire emergencies, have unfairly burdened California residents. Specifically, from January 2021 to October 2024, inclusive, PG&E residential rates increased by 56 percent, SCE rates increased by 48 percent, and SDG&E rates increased by 21 percent.(d) These increasing rate hikes and record profits are a function of the IOUs being unwilling to adequately serve their ratepayers through affordable utility rates. One in five households served by the states largest IOUs are in utility debt. From August 2022 to August 2024, inclusive, PG&E, SCE, and SDG&E also compensated their shareholders with $7.62 billion in dividends. During that period, the estimated cost to prevent all residential shutoffs for nonpayment was seventy-seven one hundredths of 1 percent of that compensation to shareholders.(e) The IOUs have caused some of Californias most destructive wildfires. PG&E is responsible for more than 30 wildfires since 2017 that have destroyed more than 23,000 homes and businesses and killed more than 100 people. These fires include the 2017 Tubbs Fire, the 2018 Camp Fire, the 2019 Kincade Fire, the 2020 Zogg Fire, and the 2021 Dixie Fire. SCE was found responsible for burning more than 385,000 acres, destroying thousands of structures, and causing five deaths in the 2017 Rye Fire, the 2017 Meyers Fire, the 2017 Liberty Fire, the 2017 Thomas Fire, and the 2018 Woolsey Fire. In 2007, SDG&E caused three fires, the Witch Fire, the Guejito Fire, and the Rice Fire, burning 207,000 acres, killing two people, destroying 1,141 homes. Assembly Bill 1054 (Chapter 79 of the Statutes of 2019) established a wildfire insurance fund of $21 billion, all passed onto ratepayer bills, directly and indirectly.(f) Past and present experience demonstrates that the IOUs prioritize profits over the safety and well-being of the ratepayers and residents of California, and thus, to support public necessity and public purpose, must be replaced with a well-researched and structured successor entity that focuses on the needs of ratepayers, workers, fire survivors, and community members instead of shareholders.(g) The State of California created the not-for-profit public benefit corporation, Golden State Energy, designated as a receiver for PG&Es assets, through passing Senate Bill 350 (Chapter 27 of the Statutes of 2020) for the purpose of owning, controlling, operating, or managing electrical and gas services for its ratepayers, for the benefit of all Californians if PG&E were to lose its business license in a six-step accountability process overseen by the Public Utilities Commission. At that time, PG&E was in bankruptcy due to an untenable amount of liabilities for wildfires caused by its equipment. Senate Bill 350 created a successor in name only and was never in a position to receive PG&E assets. This bill builds on Senate Bill 350 by authorizing an in-depth unbiased study by a neutral third party to assess the practical, financial, legal, regulatory, labor, and technical aspects of a smooth and just transition away from the IOU model to one that prioritizes the needs of the people and ecology of the State of California. |
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| 127 | 103 | | |
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| 128 | 104 | | SEC. 2. The Legislature finds and declares all of the following: |
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| 129 | 105 | | |
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| 130 | 106 | | ### SEC. 2. |
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| 131 | 107 | | |
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| 132 | 108 | | (a) Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), San Diego Gas and Electric Company (SDG&E), and SoCalGas, which have collectively exercised their monopoly over California ratepayers for over 100 years, have lost the trust of the people of California due to their crushingly high rates, exorbitant payouts to executives and shareholders, reckless endangerment of life and property, and excessive spending with the goal of generating profits rather than providing an essential service. |
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| 133 | 109 | | |
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| 134 | 110 | | (b) Rates are higher in investor-owned utility (IOU) service territories across California than in not-for-profit utilities, including municipal utilities, rural electric cooperatives, and tribal utilities, which has resulted in working class and low-income people paying higher rates. On average, California IOU electricity rates are more than 50 percent higher than rates charged by publicly owned utilities. For IOU customers in California, rates have increased nearly 50 percent over the past three years. |
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| 135 | 111 | | |
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| 136 | 112 | | (c) Under the current system, most distribution and transmission infrastructure is financed by IOUs and paid for by utility ratepayers. Ratepayers also pay for a rate of return for the IOUs for each project, which can average close to 10 percent. This guaranteed return on investment rate creates a significant and increasingly unsustainable burden on ratepayers as more unnecessary transmission lines are constructed. This can result in unnecessary rate hikes for consumers, as capital expenses can be overestimated and overspent to increase profits. As an example, in the 2023 General Rate Case, PG&E admitted that they overestimated the actual cost of infrastructure needed by $3 billion. Despite electricity demand remaining stable, executive compensation, infrastructure spending, and customer rates continue to increase. While utilities submit new rate increase proposals on a roughly three- to four-year cycle to the Public Utilities Commission, they can also submit annual increases and emergency supplements. The compounding effect and increased frequency of these rate increases, largely related to wildfire emergencies, have unfairly burdened California residents. Specifically, from January 2021 to October 2024, inclusive, PG&E residential rates increased by 56 percent, SCE rates increased by 48 percent, and SDG&E rates increased by 21 percent. |
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| 137 | 113 | | |
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| 138 | 114 | | (d) These increasing rate hikes and record profits are a function of the IOUs being unwilling to adequately serve their ratepayers through affordable utility rates. One in five households served by the states largest IOUs are in utility debt. From August 2022 to August 2024, inclusive, PG&E, SCE, and SDG&E also compensated their shareholders with $7.62 billion in dividends. During that period, the estimated cost to prevent all residential shutoffs for nonpayment was seventy-seven one hundredths of 1 percent of that compensation to shareholders. |
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| 139 | 115 | | |
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| 140 | 116 | | (e) The IOUs have caused some of Californias most destructive wildfires. PG&E is responsible for more than 30 wildfires since 2017 that have destroyed more than 23,000 homes and businesses and killed more than 100 people. These fires include the 2017 Tubbs Fire, the 2018 Camp Fire, the 2019 Kincade Fire, the 2020 Zogg Fire, and the 2021 Dixie Fire. SCE was found responsible for burning more than 385,000 acres, destroying thousands of structures, and causing five deaths in the 2017 Rye Fire, the 2017 Meyers Fire, the 2017 Liberty Fire, the 2017 Thomas Fire, and the 2018 Woolsey Fire. In 2007, SDG&E caused three fires, the Witch Fire, the Guejito Fire, and the Rice Fire, burning 207,000 acres, killing two people, destroying 1,141 homes. Assembly Bill 1054 (Chapter 79 of the Statutes of 2019) established a wildfire insurance fund of $21 billion, all passed onto ratepayer bills, directly and indirectly. |
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| 141 | 117 | | |
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| 142 | 118 | | (f) Past and present experience demonstrates that the IOUs prioritize profits over the safety and well-being of the ratepayers and residents of California, and thus, to support public necessity and public purpose, must be replaced with a well-researched and structured successor entity that focuses on the needs of ratepayers, workers, fire survivors, and community members instead of shareholders. |
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| 143 | 119 | | |
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| 144 | 120 | | (g) The State of California created the not-for-profit public benefit corporation, Golden State Energy, designated as a receiver for PG&Es assets, through passing Senate Bill 350 (Chapter 27 of the Statutes of 2020) for the purpose of owning, controlling, operating, or managing electrical and gas services for its ratepayers, for the benefit of all Californians if PG&E were to lose its business license in a six-step accountability process overseen by the Public Utilities Commission. At that time, PG&E was in bankruptcy due to an untenable amount of liabilities for wildfires caused by its equipment. Senate Bill 350 created a successor in name only and was never in a position to receive PG&E assets. This bill builds on Senate Bill 350 by authorizing an in-depth unbiased study by a neutral third party to assess the practical, financial, legal, regulatory, labor, and technical aspects of a smooth and just transition away from the IOU model to one that prioritizes the needs of the people and ecology of the State of California. |
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| 145 | 121 | | |
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| 146 | 122 | | SEC. 3. Chapter 3.5 (commencing with Section 25250) is added to Division 15 of the Public Resources Code, to read: CHAPTER 3.5. Investor-Owned Utility Transition Feasibility Study25250. For purposes of this chapter, the following definitions apply:(a) Clean energy investments, incentives, and ownership refers to the levels of private investment or public incentives in energy resources eligible under the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code), and the entities that provided the investment or incentives and own the resources.(b) Critical minerals means those minerals specified by the United States Geological Survey as essential to the economic or national security of the United States, have a supply chain that is vulnerable to disruption, and serve an essential function in the manufacturing of a product, the absence of which would have significant consequences for the economic or national security of the United States. Critical minerals do not include fuel minerals, water, ice, or snow, or common varieties of sand, gravel, stone, pumice, cinders, or clay.(c) Disadvantaged communities advisory group means the disadvantaged communities advisory group established pursuant to subdivision (g) of Section 400 of the Public Utilities Code.(d) Disadvantaged community means a community identified pursuant to Section 39711 of the Health and Safety Code.(e) Distributed energy resources means distributed renewable generation resources, energy efficiency, energy storage, electric vehicles, and demand response technologies.(f) Endangered species means a native species or subspecies of a bird, mammal, fish, amphibian, reptile, or plant that is in serious danger of becoming extinct throughout all, or a significant portion, of its range due to one or more causes, including loss of habitat, change in habitat, overexploitation, predation, competition, or disease.(g) Energy burden means the expense of energy expenditures relative to overall household income.(h) Energy justice means the goal of achieving equity in both the social and economic participation in the energy systems, while also remediating social, economic, and health burdens on those historically harmed by the energy system, including disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(i) Equity, just, and justice mean the goal of creating systems, organizations, and societies that are fair and just, recognizing where disadvantages and barriers exist, and allocating resources and support to ensure equal access and opportunity for all populations.(j) Investor-owned utilities or IOUs means all of the following:(1) Pacific Gas and Electric Company, PG&E Corporation, any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within Pacific Gas and Electric Companys service territory, and any successor to any of the foregoing.(2) Southern California Edison, SCE, any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within Southern California Edisons service territory, and any successor to any of the foregoing.(3) Southern California Gas, a subsidiary of Sempra, SoCal Gas, and any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of gas service within Southern California Gas service territory, and any successor to any of the foregoing.(4) San Diego Gas and Electric, a subsidiary of Sempra, SDG&E, and any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within San Diego Gas and Electrics service territory, and any successor to any of the foregoing.(k) Just transition means a framework for a fair shift to an economy that is ecologically sustainable, equitable, and just for all its members.(l) Low-income means at or below 80 percent of the state median income.(m) Microgrid means an interconnected system of loads and energy resources, including, but not limited to, distributed energy resources, energy storage, demand response tools, or other management, forecasting, and analytical tools, appropriately sized to meet customer needs, within a clearly defined electrical boundary that can act as a single, controllable entity, and can connect to, disconnect from, or run in parallel with larger portions of the electrical grid, or can be managed and isolated to withstand larger disturbances and maintain electrical supply to connected critical infrastructure.(n) Study team means one or more qualified organizations, public institutions, or consulting firms that is awarded the request for proposal to develop the study pursuant to Section 25251.(o) Successor entity means a public entity, public benefit corporation, or mutual benefit corporation.25251. (a) The commission, on or before March 31, 2026, based on the scoring evaluation developed and conducted by the Disadvantaged Communities Advisory Group, and in coordination with the public advisor and the Public Utilities Commission, shall issue a request for proposals for a team to develop a study to do all of the following:(1) Consistent with Section 25254, conduct a historical energy justice assessment of the IOUs operations and impacts on California residents, wildlife, and ecologies, with a focus on disadvantaged communities, low-income communities, andfederally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(2) Consistent with Section 25255, complete a comparative analysis of the benefits and challenges of transitioning the IOUs to a successor entity in order to identify a recommended model, assess the feasibility of transitioning the IOUs to a successor entity, and identify priority just design features for the successor entity, with the goal of serving the public interest and necessity of the people and ecologies of California.(3) Consistent with Section 25257, if the study, as approved by the commission, finds that it is in the best long-term interests of the people and ecologies of California to transition away from the investor-owned utility model, create a justice-centered implementation plan for managing the transition, including all appropriate mechanisms and any statutory changes that may be required. (b) The request for proposals shall seek applications that contain one or more organizations, public universities, or consultants with a demonstrated commitment to working with disadvantaged communities, and include partnership with the Disadvantaged Communities Advisory Group, and one or more community-based organizations that have supported the formation of Golden State Energy. (c) Organization qualifications shall include all of the following:(1) An eligible organization or consultant shall not have received more than one-half their income in the last three years from or for investor-owned utilities. An organization or consultant that has more than 10 percent of their work from any investor-owned utilities in California shall be required to set up appropriate safeguards to prevent conflicts of interest in the study analysis. An eligible institution, department, or principle investigator within a university shall not have received more than 10 percent of their funding in the past five years from investor owned utilities.(2) An eligible organization or consultant team shall demonstrate:(A) Through references from at least three jurisdictions, experience in policy, finance, grid design, and structural redesign work performed for jurisdictions with a population size of at least 1,000,000 people or a geographic area of 500 square miles.(B) Through case studies of prior work, demonstrated ability to fairly engage and integrate multiple stakeholder perspectives involved in or impacted by renewable energy generation, distribution, or transmission systems.(C) A clear record of research that indicates knowledge of, and engagement with, multiple utility ownership models, including both municipal and investor owned utilities.(D) A clear record of research that demonstrates an understanding of the energy justice and distributional impacts of current energy systems and protocols across the utility system.(d) On or before June 30, 2026, the commission, based on scoring developed and conducted by the Disadvantaged Communities Advisory Group, and with supporting resources and recommendations from the Public Utilities Commission, shall select the team with the highest score that meets the qualifications outlined in subdivision (c) and demonstrates their ability to meet study objectives outlined in subdivision (a) and Sections 25254, 25255, and 25257 as the study team.(e) The commission shall hold a public proceeding and submit a report of the study teams findings and recommendations, including any statutory changes that may be required, to the Legislature, in compliance with Section 9795 of the Government Code, no later than 24 months after selecting the study team for the feasibility portion of the study, and no later than 36 months after selecting the study team for the implementation plan portion of the study. 25252. (a) The commission shall require the study team to select and convene an advisory council, with recommendations from the Disadvantaged Communities Advisory Group, by December 31, 2026, to participate in the study of the vision for a new energy system as outlined in Section 25255. The advisory council shall review and provide recommendations on the initial scope of the study and implementation plan and on all preliminary and final drafts. Comments and recommendations from the advisory council that are not incorporated by the study team shall be included as an addendum to the study.(b) (1) The advisory council shall be drawn from diverse backgrounds to represent interests of disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes throughout the IOUs service territories and represent geographically diverse areas of California and consist of at least 13 members who collectively represent the following lived experiences and subject matter expertise:(A) Tribal utilities.(B) Community choice aggregation.(C) Low-income residential ratepayer advocacy.(D) Equitable rate design and utility cost allocation.(E) Environmental justice, energy justice, or utility justice issues.(F) Racial and economic justice.(G) Survivors of IOU-caused wildfires.(H) Disability rights.(I) Federally recognized California Indian tribes.(J) Nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(K) Labor unions representing utility workers.(L) Inclusive workforce development.(M) Deep knowledge of distributed energy resources and grid architecture.(2) Members of the advisory council shall not be current or previous employees, or current contractors, of an electrical corporation, as defined in Section 218 of the Public Utilities Code.(c) Members of the advisory council shall be entitled to per diem compensation and reimbursement of expenses for meetings, upon appropriation by the Legislature.25253. (a) For purposes of carrying out this chapter, the study team may do all of the following:(1) Consult with any stakeholders as needed or appropriate.(2) Request the production of books, records, correspondence, figures, charts, memoranda, papers, and documents, and other relevant materials of any nature from the commission, the Public Utilities Commission, and the IOUs.(b) For purposes of carrying out this chapter, the study team shall do all of the following:(1) Collaborate with the advisory council and the commission, through the Public Advocates Office, to host a minimum of four public hearings in geographically diverse regions of the IOUs service territories and during a variety of times to accommodate different work schedules.(2) In its specific findings, clarify all assumptions for findings and include citations to the original data or source for those assumptions.(c) A member of the study team may, if authorized by the prime consultant, take any action that the overall consultant team is authorized to take pursuant to this section.(d) On behalf of the commission, the study team may acquire directly from the head of a state agency available information that they consider useful in fulfilling their deliverables. All state agencies shall cooperate with the commission on behalf of the study team with respect to such information and shall furnish all information requested by the study team to the extent permitted by law. The study team shall keep confidential any information received from a state agency that is confidential or exempt from the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) or subject to a nondisclosure agreement.(e) As consultants to the commission, the study team shall have the administrative, technical, and legal assistance of the Department of Justice, the commission, the Public Utilities Commission, and the State Air Resources Board.(f) The study team may procure supplies and services by contract in accordance with applicable laws and rules.(g) The study team may enter into subcontracts for purposes of conducting research or surveys, preparing reports, and performing other activities necessary for the fulfillment of their research deliverables with state departments, agencies, and other instrumentalities of the state, federal departments, agencies, and other federal instrumentalities, and private entities. Subcontractors shall also meet the qualifications outlined in paragraph (1) of subdivision (c) of Section 25251.(h) For purposes of carrying out this chapter, the commission, through the Public Advocates Office, may do all of the following in service of completion of deliverables for the contract:(1) Hold hearings and sit and act at any time and location in California.(2) Consult with any issueholders as deemed necessary to achieve the objectives of this chapter.(3) Request the attendance and testimony of witnesses.(4) Seek an order from a superior court compelling testimony or compliance with a subpoena, including from the IOUs executive leadership.25254. The historical energy justice assessment component of the study described in Section 25251 shall assess the IOUs historical and ongoing operations and impacts on California residents, wildlife, and ecologies, with a focus on impacts to disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission, broken down by ZIP Code, income, race, age, and other relevant demographics. The assessment shall include, but is not limited to, all of the following:(a) An assessment and quantification of the distribution of health harms and reduced lifespans resulting from wildfires, polluting energy generation facilities, and infrastructure.(b) An assessment and quantification of the economic distribution of clean energy investments, incentives, and ownership.(c) An assessment of the impacts of rate increases and the extent and distribution of energy burdens based on historical rates.(d) An assessment of the distribution and quantity of utility disconnections, including disconnections due to lack of payment and public safety power shutoffs.(e) An assessment of the emotional, economic, ecological, and safety-related impacts from disasters caused by the IOUs, including, but not limited to, wildfires, pipeline explosions, power shutoffs, deenergization events, and the potential health impacts and lifespan reductions from those impacts.(f) An assessment of the pollution and other ecological impacts from energy generating infrastructure and the potential health impacts and lifespan reductions from those impacts.(g) An assessment of the extent and distribution of delayed or lack of provision of electricity and gas service and hookups.(h) An assessment of the liability incurred by, and during, the IOUs ownership, including specifying the portion of risks and liabilities likely to be transferred to a successor entity.(i) A quantification of the IOUs current tax obligations to the state.(j) An assessment of lands taken or received that were previously owned and stewarded by federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(k) An assessment of the IOUs historical and ongoing impacts on California wildlife, endangered species, and ecologies.(l) An assessment and audit of the IOUs capital expenditures and operating expenses to identify the cost-effectiveness of infrastructure investments.25255. (a) The comparative analysis of the benefits and challenges component of transitioning the IOUs to a recommended successor entity portion of the study described in paragraph (2) of subdivision (a) of Section 25251 shall provide a comparative assessment of transitioning the IOUs to either a public entity, nonprofit public benefit corporation, or mutual benefit corporation, assess the overall feasibility of transitioning the IOUs to a successor entity, and identify priority energy just design features for a successor entity.(b) The comparative analysis shall comprise all of the following:(1) An assessment of all legal, economic, financial, governance, and other relevant aspects of the ownership types required to successfully transition the assets and operations of the IOUs to a nonprofit public benefit corporation, such as Golden State Energy, a mutual benefit corporation, or a publicly owned electric utility, which may be in existence or yet to be formed.(2) An assessment of whether there are any structural limitations or advantages of each ownership type relative to the successor entitys ability to serve the people of California and to achieving the following policy objectives:(A) A demonstrable reduction in electricity costs for customers over a 30-year period, with a focus on increasing energy bill affordability for low-income communities, disadvantaged communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes, ensuring electricity costs are less than 3 percent of household income.(B) Increased opportunity for labor benefits through maintaining pensions and increasing benefits for workers, increasing good union jobs and inclusive workforce development in the region.(C) Increased public accountability, trust, and transparency in governing structures, financial spending, maintenance, and infrastructure decisions.(c) The feasibility assessment shall include all of the following:(1) Identification of legal and regulatory issues, and recommendations for addressing these issues, that might arise from transitioning the assets and operations of the IOUs and their respective operations as described in this chapter, and post-transition, in order to do all of the following:(A) Maintain the authority for the establishment of municipal utility districts, rural electric cooperatives, and tribal utilities, and ensure the successor entity cooperates with other public entities.(B) Safeguard or strengthen the worker and labor benefits, including union protections, during and after the transition period, and provide for workers rights and a just transition for workers impacted by the decommissioning of unsafe, polluting infrastructure.(C) By no later than 2032, safely decommission generation, transmission, and piping infrastructure transferred to the successor entity that is unsafe and polluting, prioritizing infrastructure that is causing disproportionate harms in disadvantaged communities, low-income communities, federally recognized California Indian tribes, or nonfederally recognized California Native American tribes.(D) Manage future wildfire liability.(E) Equitably decommission gas infrastructure and transition towards electrification, prioritizing the decommissioning of gas powerplants in disadvantaged communities and replacement with community-owned distributed energy resources without unduly burdening ratepayers, especially low-income or disadvantaged ratepayers, with associated costs.(2) A preliminary evaluation of the long-term costs and benefits over at least a 30-year horizon of a transfer in ownership to a successor entity, including an assumption for clean energy, electrification, and grid investments at a pace in accordance with state climate goals. This evaluation shall incorporate all of the following:(A) The potential for securitization of debt, including consideration of tax-exempt bonding for municipal utilities.(B) Consideration of the portion of utility capital expenses paid for by ratepayer contributions.(C) Application of all legally claimed depreciation of assets by the IOUs.(D) Equitable finance and revenue sources that may be available to the successor entity for its operational needs, including for purchase, maintenance, and upgrades, with information regarding all of the following:(i) Mechanisms to support the creditworthiness of the successor entity during the early years of operation.(ii) Access to bonds.(iii) Long-term opportunities for public financing.(iv) Ability to leverage federal funding in the form of elective pay, as outlined in the Inflation Reduction Act of 2022 (Public Law 117-169).(v) Options for revenue collected from rates and other financial resources.(3) A thorough consideration of which IOU assets should be prioritized for transfer and a timeline for those transfers, including all of the following:(A) The merits or risks of splitting ownership of the IOUs distribution infrastructure, transmission infrastructure, program administration, generation, and retail energy services.(B) The merits or risks of splitting ownership of the IOUs electrical and gas infrastructure.(C) The merits or risks of splitting ownership by geographic territory.(D) A full consideration of which assets to prioritize for transfer and a timeline for those transfers, including consideration of grid architectures that maximize distributed energy resources and future needs for distribution system operator infrastructure.(E) An evaluation of potential benefits, if any, that may be realized by separating the ownership and operation of the electrical distribution system for future distribution system operator models.(d) The identification of just design features for a successor entity and the mechanisms to realize them shall include, but not be limited to, all of the following:(1) The acknowledgment, rectification, and repair of prior harms, as found in the historical energy justice assessment pursuant to Section 25254.(2) Increasing social equity, electrical system reliability and performance, ecological sustainability, and climate resilience, including the ability to adapt to adverse climate-related weather disasters and other economic, social, and infrastructural crises.(3) Minimizing environmental health harms in the region and in homes.(4) Enhancing stewardship of finite resources and fragile ecologies through reducing the need for future large scale buildout, land clearing, or installation of ecologically disruptive energy generation, transmission, and distribution assets, and minimizing extraction of critical minerals.(5) Focusing on disadvantaged communities, low-income communities, federally recognized California Indian tribes, and nonfederally recognized California Native American tribes in decisionmaking processes.(6) Creating innovative participatory governance and accountability structures that enable community members, including low-income members and users with disabilities, to meaningfully impact the priorities of the successor entity.(7) Adopting mechanisms for sustained public engagement and transparency that holds the successor entity accountable to its mission to serve the communitys well-being.(8) Creating alternative mechanisms to utility disconnections to cover nonpayment by customers.(9) Including nonenergy impacts, social costs and benefits, health impacts, and more equitable climate outcomes in evaluating cost-effectiveness and decisionmaking.(10) Creating governance of the successor entity in a manner that maximizes public participation and energy democracy, including all of the following:(A) Whether members of the board of directors of the successor entity should be appointed pursuant to Part 2 (commencing with Section 3420) of Division 1.7 of the Public Utilities Code, elected by the customers of the successor entity, or a combination of appointees and elected members, and what type of expertise or experience should be represented.(B) Term limits for members of the board of directors.(C) Size and representation of the board of directors.(D) Involvement of, and robust funding of, technical assistance mechanisms to support community-based organizations in contributing to the decisions of the board of directors.(E) Adequate full-time staffing needs for the board of directors.(11) Requirements on the operations of the successor entity, including on all of the following:(A) Data collection by the successor entity and the public availability of collected data.(B) Public engagement and transparency, including all of the following:(i) Public engagement timelines and processes for rate cases, budget planning, and other policy and program approvals.(ii) Public meetings, notices, and comment periods.(iii) Relationships with local government, including reporting and communication requirements on projects undertaken by the successor entity with defined local economic benefits.25256. (a) Upon completion of the study components described in Sections 25254 and 25255, the study team, in consultation with the advisory council, consistent with Section 25252, shall recommend a particular successor entity ownership type to the commission for further feasibility review and implementation considerations.(b) On or before September 30, 2028, the commission, through a public process, shall vote to approve the study and recommended a particular successor entity ownership type based on a rubric comparing each of the successor entity ownership types to the incumbent IOU model using the following criteria:(1) Long-term affordability for the state and for ratepayers.(2) Safety.(3) Reliability.(4) Climate resilience.(5) Local economic benefits.(6) Health impacts.(7) Energy justice. 25257. (a) If the study, as approved by the commission, finds that it is in the best long-term interests of the people and ecologies of California to transition away from the investor-owned utility model, the study team shall begin work to create a justice-centered implementation plan, as described in paragraph (3) of subdivision (a) of Section 25251, to outline a timeline and transition process to the successor entity, including recommendations for which branches of government or agencies should be responsible and coordinate with which portions of the public to ensure the transition fairly minimizes burdens and unintended consequences and fairly maximizes benefits in service of the public interest and necessity.(b) The implementation plan shall identify all appropriate implementation mechanisms, including statutory changes that may be required, recommendations for specific bylaws, operating procedures, governance structures, or otherwise to ensure the successor entity is structured, operationalized, and has the proper authority and mandate to ensure more just outcomes, based in part on findings pursuant to Sections 25254 and 25255.(c) The implementation plan shall additionally do all of the following:(1) Recommend mechanisms to fairly set the acquisition cost and valuation in as legally defensible and timely manner as possible, with the goal of avoiding lengthy periods of litigation over the acquisition cost.(2) Recommend an appropriate regulatory structure to clearly delineate the relationship between the Public Utilities Commission and the successor entity, including consideration of an independent oversight body for the successor entity.(3) Provide for community benefit agreements and other local economic benefit and cost savings to the maximum extent possible for new infrastructure investments and maintenance, prioritizing clean distributed energy resources.(d) The commission, through a public process, shall vote to approve the implementation plan on or before October 31, 2029. |
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| 148 | 124 | | SEC. 3. Chapter 3.5 (commencing with Section 25250) is added to Division 15 of the Public Resources Code, to read: |
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| 150 | 126 | | ### SEC. 3. |
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| 152 | 128 | | CHAPTER 3.5. Investor-Owned Utility Transition Feasibility Study25250. For purposes of this chapter, the following definitions apply:(a) Clean energy investments, incentives, and ownership refers to the levels of private investment or public incentives in energy resources eligible under the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code), and the entities that provided the investment or incentives and own the resources.(b) Critical minerals means those minerals specified by the United States Geological Survey as essential to the economic or national security of the United States, have a supply chain that is vulnerable to disruption, and serve an essential function in the manufacturing of a product, the absence of which would have significant consequences for the economic or national security of the United States. Critical minerals do not include fuel minerals, water, ice, or snow, or common varieties of sand, gravel, stone, pumice, cinders, or clay.(c) Disadvantaged communities advisory group means the disadvantaged communities advisory group established pursuant to subdivision (g) of Section 400 of the Public Utilities Code.(d) Disadvantaged community means a community identified pursuant to Section 39711 of the Health and Safety Code.(e) Distributed energy resources means distributed renewable generation resources, energy efficiency, energy storage, electric vehicles, and demand response technologies.(f) Endangered species means a native species or subspecies of a bird, mammal, fish, amphibian, reptile, or plant that is in serious danger of becoming extinct throughout all, or a significant portion, of its range due to one or more causes, including loss of habitat, change in habitat, overexploitation, predation, competition, or disease.(g) Energy burden means the expense of energy expenditures relative to overall household income.(h) Energy justice means the goal of achieving equity in both the social and economic participation in the energy systems, while also remediating social, economic, and health burdens on those historically harmed by the energy system, including disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(i) Equity, just, and justice mean the goal of creating systems, organizations, and societies that are fair and just, recognizing where disadvantages and barriers exist, and allocating resources and support to ensure equal access and opportunity for all populations.(j) Investor-owned utilities or IOUs means all of the following:(1) Pacific Gas and Electric Company, PG&E Corporation, any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within Pacific Gas and Electric Companys service territory, and any successor to any of the foregoing.(2) Southern California Edison, SCE, any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within Southern California Edisons service territory, and any successor to any of the foregoing.(3) Southern California Gas, a subsidiary of Sempra, SoCal Gas, and any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of gas service within Southern California Gas service territory, and any successor to any of the foregoing.(4) San Diego Gas and Electric, a subsidiary of Sempra, SDG&E, and any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within San Diego Gas and Electrics service territory, and any successor to any of the foregoing.(k) Just transition means a framework for a fair shift to an economy that is ecologically sustainable, equitable, and just for all its members.(l) Low-income means at or below 80 percent of the state median income.(m) Microgrid means an interconnected system of loads and energy resources, including, but not limited to, distributed energy resources, energy storage, demand response tools, or other management, forecasting, and analytical tools, appropriately sized to meet customer needs, within a clearly defined electrical boundary that can act as a single, controllable entity, and can connect to, disconnect from, or run in parallel with larger portions of the electrical grid, or can be managed and isolated to withstand larger disturbances and maintain electrical supply to connected critical infrastructure.(n) Study team means one or more qualified organizations, public institutions, or consulting firms that is awarded the request for proposal to develop the study pursuant to Section 25251.(o) Successor entity means a public entity, public benefit corporation, or mutual benefit corporation.25251. (a) The commission, on or before March 31, 2026, based on the scoring evaluation developed and conducted by the Disadvantaged Communities Advisory Group, and in coordination with the public advisor and the Public Utilities Commission, shall issue a request for proposals for a team to develop a study to do all of the following:(1) Consistent with Section 25254, conduct a historical energy justice assessment of the IOUs operations and impacts on California residents, wildlife, and ecologies, with a focus on disadvantaged communities, low-income communities, andfederally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(2) Consistent with Section 25255, complete a comparative analysis of the benefits and challenges of transitioning the IOUs to a successor entity in order to identify a recommended model, assess the feasibility of transitioning the IOUs to a successor entity, and identify priority just design features for the successor entity, with the goal of serving the public interest and necessity of the people and ecologies of California.(3) Consistent with Section 25257, if the study, as approved by the commission, finds that it is in the best long-term interests of the people and ecologies of California to transition away from the investor-owned utility model, create a justice-centered implementation plan for managing the transition, including all appropriate mechanisms and any statutory changes that may be required. (b) The request for proposals shall seek applications that contain one or more organizations, public universities, or consultants with a demonstrated commitment to working with disadvantaged communities, and include partnership with the Disadvantaged Communities Advisory Group, and one or more community-based organizations that have supported the formation of Golden State Energy. (c) Organization qualifications shall include all of the following:(1) An eligible organization or consultant shall not have received more than one-half their income in the last three years from or for investor-owned utilities. An organization or consultant that has more than 10 percent of their work from any investor-owned utilities in California shall be required to set up appropriate safeguards to prevent conflicts of interest in the study analysis. An eligible institution, department, or principle investigator within a university shall not have received more than 10 percent of their funding in the past five years from investor owned utilities.(2) An eligible organization or consultant team shall demonstrate:(A) Through references from at least three jurisdictions, experience in policy, finance, grid design, and structural redesign work performed for jurisdictions with a population size of at least 1,000,000 people or a geographic area of 500 square miles.(B) Through case studies of prior work, demonstrated ability to fairly engage and integrate multiple stakeholder perspectives involved in or impacted by renewable energy generation, distribution, or transmission systems.(C) A clear record of research that indicates knowledge of, and engagement with, multiple utility ownership models, including both municipal and investor owned utilities.(D) A clear record of research that demonstrates an understanding of the energy justice and distributional impacts of current energy systems and protocols across the utility system.(d) On or before June 30, 2026, the commission, based on scoring developed and conducted by the Disadvantaged Communities Advisory Group, and with supporting resources and recommendations from the Public Utilities Commission, shall select the team with the highest score that meets the qualifications outlined in subdivision (c) and demonstrates their ability to meet study objectives outlined in subdivision (a) and Sections 25254, 25255, and 25257 as the study team.(e) The commission shall hold a public proceeding and submit a report of the study teams findings and recommendations, including any statutory changes that may be required, to the Legislature, in compliance with Section 9795 of the Government Code, no later than 24 months after selecting the study team for the feasibility portion of the study, and no later than 36 months after selecting the study team for the implementation plan portion of the study. 25252. (a) The commission shall require the study team to select and convene an advisory council, with recommendations from the Disadvantaged Communities Advisory Group, by December 31, 2026, to participate in the study of the vision for a new energy system as outlined in Section 25255. The advisory council shall review and provide recommendations on the initial scope of the study and implementation plan and on all preliminary and final drafts. Comments and recommendations from the advisory council that are not incorporated by the study team shall be included as an addendum to the study.(b) (1) The advisory council shall be drawn from diverse backgrounds to represent interests of disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes throughout the IOUs service territories and represent geographically diverse areas of California and consist of at least 13 members who collectively represent the following lived experiences and subject matter expertise:(A) Tribal utilities.(B) Community choice aggregation.(C) Low-income residential ratepayer advocacy.(D) Equitable rate design and utility cost allocation.(E) Environmental justice, energy justice, or utility justice issues.(F) Racial and economic justice.(G) Survivors of IOU-caused wildfires.(H) Disability rights.(I) Federally recognized California Indian tribes.(J) Nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(K) Labor unions representing utility workers.(L) Inclusive workforce development.(M) Deep knowledge of distributed energy resources and grid architecture.(2) Members of the advisory council shall not be current or previous employees, or current contractors, of an electrical corporation, as defined in Section 218 of the Public Utilities Code.(c) Members of the advisory council shall be entitled to per diem compensation and reimbursement of expenses for meetings, upon appropriation by the Legislature.25253. (a) For purposes of carrying out this chapter, the study team may do all of the following:(1) Consult with any stakeholders as needed or appropriate.(2) Request the production of books, records, correspondence, figures, charts, memoranda, papers, and documents, and other relevant materials of any nature from the commission, the Public Utilities Commission, and the IOUs.(b) For purposes of carrying out this chapter, the study team shall do all of the following:(1) Collaborate with the advisory council and the commission, through the Public Advocates Office, to host a minimum of four public hearings in geographically diverse regions of the IOUs service territories and during a variety of times to accommodate different work schedules.(2) In its specific findings, clarify all assumptions for findings and include citations to the original data or source for those assumptions.(c) A member of the study team may, if authorized by the prime consultant, take any action that the overall consultant team is authorized to take pursuant to this section.(d) On behalf of the commission, the study team may acquire directly from the head of a state agency available information that they consider useful in fulfilling their deliverables. All state agencies shall cooperate with the commission on behalf of the study team with respect to such information and shall furnish all information requested by the study team to the extent permitted by law. The study team shall keep confidential any information received from a state agency that is confidential or exempt from the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) or subject to a nondisclosure agreement.(e) As consultants to the commission, the study team shall have the administrative, technical, and legal assistance of the Department of Justice, the commission, the Public Utilities Commission, and the State Air Resources Board.(f) The study team may procure supplies and services by contract in accordance with applicable laws and rules.(g) The study team may enter into subcontracts for purposes of conducting research or surveys, preparing reports, and performing other activities necessary for the fulfillment of their research deliverables with state departments, agencies, and other instrumentalities of the state, federal departments, agencies, and other federal instrumentalities, and private entities. Subcontractors shall also meet the qualifications outlined in paragraph (1) of subdivision (c) of Section 25251.(h) For purposes of carrying out this chapter, the commission, through the Public Advocates Office, may do all of the following in service of completion of deliverables for the contract:(1) Hold hearings and sit and act at any time and location in California.(2) Consult with any issueholders as deemed necessary to achieve the objectives of this chapter.(3) Request the attendance and testimony of witnesses.(4) Seek an order from a superior court compelling testimony or compliance with a subpoena, including from the IOUs executive leadership.25254. The historical energy justice assessment component of the study described in Section 25251 shall assess the IOUs historical and ongoing operations and impacts on California residents, wildlife, and ecologies, with a focus on impacts to disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission, broken down by ZIP Code, income, race, age, and other relevant demographics. The assessment shall include, but is not limited to, all of the following:(a) An assessment and quantification of the distribution of health harms and reduced lifespans resulting from wildfires, polluting energy generation facilities, and infrastructure.(b) An assessment and quantification of the economic distribution of clean energy investments, incentives, and ownership.(c) An assessment of the impacts of rate increases and the extent and distribution of energy burdens based on historical rates.(d) An assessment of the distribution and quantity of utility disconnections, including disconnections due to lack of payment and public safety power shutoffs.(e) An assessment of the emotional, economic, ecological, and safety-related impacts from disasters caused by the IOUs, including, but not limited to, wildfires, pipeline explosions, power shutoffs, deenergization events, and the potential health impacts and lifespan reductions from those impacts.(f) An assessment of the pollution and other ecological impacts from energy generating infrastructure and the potential health impacts and lifespan reductions from those impacts.(g) An assessment of the extent and distribution of delayed or lack of provision of electricity and gas service and hookups.(h) An assessment of the liability incurred by, and during, the IOUs ownership, including specifying the portion of risks and liabilities likely to be transferred to a successor entity.(i) A quantification of the IOUs current tax obligations to the state.(j) An assessment of lands taken or received that were previously owned and stewarded by federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(k) An assessment of the IOUs historical and ongoing impacts on California wildlife, endangered species, and ecologies.(l) An assessment and audit of the IOUs capital expenditures and operating expenses to identify the cost-effectiveness of infrastructure investments.25255. (a) The comparative analysis of the benefits and challenges component of transitioning the IOUs to a recommended successor entity portion of the study described in paragraph (2) of subdivision (a) of Section 25251 shall provide a comparative assessment of transitioning the IOUs to either a public entity, nonprofit public benefit corporation, or mutual benefit corporation, assess the overall feasibility of transitioning the IOUs to a successor entity, and identify priority energy just design features for a successor entity.(b) The comparative analysis shall comprise all of the following:(1) An assessment of all legal, economic, financial, governance, and other relevant aspects of the ownership types required to successfully transition the assets and operations of the IOUs to a nonprofit public benefit corporation, such as Golden State Energy, a mutual benefit corporation, or a publicly owned electric utility, which may be in existence or yet to be formed.(2) An assessment of whether there are any structural limitations or advantages of each ownership type relative to the successor entitys ability to serve the people of California and to achieving the following policy objectives:(A) A demonstrable reduction in electricity costs for customers over a 30-year period, with a focus on increasing energy bill affordability for low-income communities, disadvantaged communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes, ensuring electricity costs are less than 3 percent of household income.(B) Increased opportunity for labor benefits through maintaining pensions and increasing benefits for workers, increasing good union jobs and inclusive workforce development in the region.(C) Increased public accountability, trust, and transparency in governing structures, financial spending, maintenance, and infrastructure decisions.(c) The feasibility assessment shall include all of the following:(1) Identification of legal and regulatory issues, and recommendations for addressing these issues, that might arise from transitioning the assets and operations of the IOUs and their respective operations as described in this chapter, and post-transition, in order to do all of the following:(A) Maintain the authority for the establishment of municipal utility districts, rural electric cooperatives, and tribal utilities, and ensure the successor entity cooperates with other public entities.(B) Safeguard or strengthen the worker and labor benefits, including union protections, during and after the transition period, and provide for workers rights and a just transition for workers impacted by the decommissioning of unsafe, polluting infrastructure.(C) By no later than 2032, safely decommission generation, transmission, and piping infrastructure transferred to the successor entity that is unsafe and polluting, prioritizing infrastructure that is causing disproportionate harms in disadvantaged communities, low-income communities, federally recognized California Indian tribes, or nonfederally recognized California Native American tribes.(D) Manage future wildfire liability.(E) Equitably decommission gas infrastructure and transition towards electrification, prioritizing the decommissioning of gas powerplants in disadvantaged communities and replacement with community-owned distributed energy resources without unduly burdening ratepayers, especially low-income or disadvantaged ratepayers, with associated costs.(2) A preliminary evaluation of the long-term costs and benefits over at least a 30-year horizon of a transfer in ownership to a successor entity, including an assumption for clean energy, electrification, and grid investments at a pace in accordance with state climate goals. This evaluation shall incorporate all of the following:(A) The potential for securitization of debt, including consideration of tax-exempt bonding for municipal utilities.(B) Consideration of the portion of utility capital expenses paid for by ratepayer contributions.(C) Application of all legally claimed depreciation of assets by the IOUs.(D) Equitable finance and revenue sources that may be available to the successor entity for its operational needs, including for purchase, maintenance, and upgrades, with information regarding all of the following:(i) Mechanisms to support the creditworthiness of the successor entity during the early years of operation.(ii) Access to bonds.(iii) Long-term opportunities for public financing.(iv) Ability to leverage federal funding in the form of elective pay, as outlined in the Inflation Reduction Act of 2022 (Public Law 117-169).(v) Options for revenue collected from rates and other financial resources.(3) A thorough consideration of which IOU assets should be prioritized for transfer and a timeline for those transfers, including all of the following:(A) The merits or risks of splitting ownership of the IOUs distribution infrastructure, transmission infrastructure, program administration, generation, and retail energy services.(B) The merits or risks of splitting ownership of the IOUs electrical and gas infrastructure.(C) The merits or risks of splitting ownership by geographic territory.(D) A full consideration of which assets to prioritize for transfer and a timeline for those transfers, including consideration of grid architectures that maximize distributed energy resources and future needs for distribution system operator infrastructure.(E) An evaluation of potential benefits, if any, that may be realized by separating the ownership and operation of the electrical distribution system for future distribution system operator models.(d) The identification of just design features for a successor entity and the mechanisms to realize them shall include, but not be limited to, all of the following:(1) The acknowledgment, rectification, and repair of prior harms, as found in the historical energy justice assessment pursuant to Section 25254.(2) Increasing social equity, electrical system reliability and performance, ecological sustainability, and climate resilience, including the ability to adapt to adverse climate-related weather disasters and other economic, social, and infrastructural crises.(3) Minimizing environmental health harms in the region and in homes.(4) Enhancing stewardship of finite resources and fragile ecologies through reducing the need for future large scale buildout, land clearing, or installation of ecologically disruptive energy generation, transmission, and distribution assets, and minimizing extraction of critical minerals.(5) Focusing on disadvantaged communities, low-income communities, federally recognized California Indian tribes, and nonfederally recognized California Native American tribes in decisionmaking processes.(6) Creating innovative participatory governance and accountability structures that enable community members, including low-income members and users with disabilities, to meaningfully impact the priorities of the successor entity.(7) Adopting mechanisms for sustained public engagement and transparency that holds the successor entity accountable to its mission to serve the communitys well-being.(8) Creating alternative mechanisms to utility disconnections to cover nonpayment by customers.(9) Including nonenergy impacts, social costs and benefits, health impacts, and more equitable climate outcomes in evaluating cost-effectiveness and decisionmaking.(10) Creating governance of the successor entity in a manner that maximizes public participation and energy democracy, including all of the following:(A) Whether members of the board of directors of the successor entity should be appointed pursuant to Part 2 (commencing with Section 3420) of Division 1.7 of the Public Utilities Code, elected by the customers of the successor entity, or a combination of appointees and elected members, and what type of expertise or experience should be represented.(B) Term limits for members of the board of directors.(C) Size and representation of the board of directors.(D) Involvement of, and robust funding of, technical assistance mechanisms to support community-based organizations in contributing to the decisions of the board of directors.(E) Adequate full-time staffing needs for the board of directors.(11) Requirements on the operations of the successor entity, including on all of the following:(A) Data collection by the successor entity and the public availability of collected data.(B) Public engagement and transparency, including all of the following:(i) Public engagement timelines and processes for rate cases, budget planning, and other policy and program approvals.(ii) Public meetings, notices, and comment periods.(iii) Relationships with local government, including reporting and communication requirements on projects undertaken by the successor entity with defined local economic benefits.25256. (a) Upon completion of the study components described in Sections 25254 and 25255, the study team, in consultation with the advisory council, consistent with Section 25252, shall recommend a particular successor entity ownership type to the commission for further feasibility review and implementation considerations.(b) On or before September 30, 2028, the commission, through a public process, shall vote to approve the study and recommended a particular successor entity ownership type based on a rubric comparing each of the successor entity ownership types to the incumbent IOU model using the following criteria:(1) Long-term affordability for the state and for ratepayers.(2) Safety.(3) Reliability.(4) Climate resilience.(5) Local economic benefits.(6) Health impacts.(7) Energy justice. 25257. (a) If the study, as approved by the commission, finds that it is in the best long-term interests of the people and ecologies of California to transition away from the investor-owned utility model, the study team shall begin work to create a justice-centered implementation plan, as described in paragraph (3) of subdivision (a) of Section 25251, to outline a timeline and transition process to the successor entity, including recommendations for which branches of government or agencies should be responsible and coordinate with which portions of the public to ensure the transition fairly minimizes burdens and unintended consequences and fairly maximizes benefits in service of the public interest and necessity.(b) The implementation plan shall identify all appropriate implementation mechanisms, including statutory changes that may be required, recommendations for specific bylaws, operating procedures, governance structures, or otherwise to ensure the successor entity is structured, operationalized, and has the proper authority and mandate to ensure more just outcomes, based in part on findings pursuant to Sections 25254 and 25255.(c) The implementation plan shall additionally do all of the following:(1) Recommend mechanisms to fairly set the acquisition cost and valuation in as legally defensible and timely manner as possible, with the goal of avoiding lengthy periods of litigation over the acquisition cost.(2) Recommend an appropriate regulatory structure to clearly delineate the relationship between the Public Utilities Commission and the successor entity, including consideration of an independent oversight body for the successor entity.(3) Provide for community benefit agreements and other local economic benefit and cost savings to the maximum extent possible for new infrastructure investments and maintenance, prioritizing clean distributed energy resources.(d) The commission, through a public process, shall vote to approve the implementation plan on or before October 31, 2029. |
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| 154 | 130 | | CHAPTER 3.5. Investor-Owned Utility Transition Feasibility Study25250. For purposes of this chapter, the following definitions apply:(a) Clean energy investments, incentives, and ownership refers to the levels of private investment or public incentives in energy resources eligible under the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code), and the entities that provided the investment or incentives and own the resources.(b) Critical minerals means those minerals specified by the United States Geological Survey as essential to the economic or national security of the United States, have a supply chain that is vulnerable to disruption, and serve an essential function in the manufacturing of a product, the absence of which would have significant consequences for the economic or national security of the United States. Critical minerals do not include fuel minerals, water, ice, or snow, or common varieties of sand, gravel, stone, pumice, cinders, or clay.(c) Disadvantaged communities advisory group means the disadvantaged communities advisory group established pursuant to subdivision (g) of Section 400 of the Public Utilities Code.(d) Disadvantaged community means a community identified pursuant to Section 39711 of the Health and Safety Code.(e) Distributed energy resources means distributed renewable generation resources, energy efficiency, energy storage, electric vehicles, and demand response technologies.(f) Endangered species means a native species or subspecies of a bird, mammal, fish, amphibian, reptile, or plant that is in serious danger of becoming extinct throughout all, or a significant portion, of its range due to one or more causes, including loss of habitat, change in habitat, overexploitation, predation, competition, or disease.(g) Energy burden means the expense of energy expenditures relative to overall household income.(h) Energy justice means the goal of achieving equity in both the social and economic participation in the energy systems, while also remediating social, economic, and health burdens on those historically harmed by the energy system, including disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(i) Equity, just, and justice mean the goal of creating systems, organizations, and societies that are fair and just, recognizing where disadvantages and barriers exist, and allocating resources and support to ensure equal access and opportunity for all populations.(j) Investor-owned utilities or IOUs means all of the following:(1) Pacific Gas and Electric Company, PG&E Corporation, any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within Pacific Gas and Electric Companys service territory, and any successor to any of the foregoing.(2) Southern California Edison, SCE, any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within Southern California Edisons service territory, and any successor to any of the foregoing.(3) Southern California Gas, a subsidiary of Sempra, SoCal Gas, and any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of gas service within Southern California Gas service territory, and any successor to any of the foregoing.(4) San Diego Gas and Electric, a subsidiary of Sempra, SDG&E, and any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within San Diego Gas and Electrics service territory, and any successor to any of the foregoing.(k) Just transition means a framework for a fair shift to an economy that is ecologically sustainable, equitable, and just for all its members.(l) Low-income means at or below 80 percent of the state median income.(m) Microgrid means an interconnected system of loads and energy resources, including, but not limited to, distributed energy resources, energy storage, demand response tools, or other management, forecasting, and analytical tools, appropriately sized to meet customer needs, within a clearly defined electrical boundary that can act as a single, controllable entity, and can connect to, disconnect from, or run in parallel with larger portions of the electrical grid, or can be managed and isolated to withstand larger disturbances and maintain electrical supply to connected critical infrastructure.(n) Study team means one or more qualified organizations, public institutions, or consulting firms that is awarded the request for proposal to develop the study pursuant to Section 25251.(o) Successor entity means a public entity, public benefit corporation, or mutual benefit corporation.25251. (a) The commission, on or before March 31, 2026, based on the scoring evaluation developed and conducted by the Disadvantaged Communities Advisory Group, and in coordination with the public advisor and the Public Utilities Commission, shall issue a request for proposals for a team to develop a study to do all of the following:(1) Consistent with Section 25254, conduct a historical energy justice assessment of the IOUs operations and impacts on California residents, wildlife, and ecologies, with a focus on disadvantaged communities, low-income communities, andfederally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(2) Consistent with Section 25255, complete a comparative analysis of the benefits and challenges of transitioning the IOUs to a successor entity in order to identify a recommended model, assess the feasibility of transitioning the IOUs to a successor entity, and identify priority just design features for the successor entity, with the goal of serving the public interest and necessity of the people and ecologies of California.(3) Consistent with Section 25257, if the study, as approved by the commission, finds that it is in the best long-term interests of the people and ecologies of California to transition away from the investor-owned utility model, create a justice-centered implementation plan for managing the transition, including all appropriate mechanisms and any statutory changes that may be required. (b) The request for proposals shall seek applications that contain one or more organizations, public universities, or consultants with a demonstrated commitment to working with disadvantaged communities, and include partnership with the Disadvantaged Communities Advisory Group, and one or more community-based organizations that have supported the formation of Golden State Energy. (c) Organization qualifications shall include all of the following:(1) An eligible organization or consultant shall not have received more than one-half their income in the last three years from or for investor-owned utilities. An organization or consultant that has more than 10 percent of their work from any investor-owned utilities in California shall be required to set up appropriate safeguards to prevent conflicts of interest in the study analysis. An eligible institution, department, or principle investigator within a university shall not have received more than 10 percent of their funding in the past five years from investor owned utilities.(2) An eligible organization or consultant team shall demonstrate:(A) Through references from at least three jurisdictions, experience in policy, finance, grid design, and structural redesign work performed for jurisdictions with a population size of at least 1,000,000 people or a geographic area of 500 square miles.(B) Through case studies of prior work, demonstrated ability to fairly engage and integrate multiple stakeholder perspectives involved in or impacted by renewable energy generation, distribution, or transmission systems.(C) A clear record of research that indicates knowledge of, and engagement with, multiple utility ownership models, including both municipal and investor owned utilities.(D) A clear record of research that demonstrates an understanding of the energy justice and distributional impacts of current energy systems and protocols across the utility system.(d) On or before June 30, 2026, the commission, based on scoring developed and conducted by the Disadvantaged Communities Advisory Group, and with supporting resources and recommendations from the Public Utilities Commission, shall select the team with the highest score that meets the qualifications outlined in subdivision (c) and demonstrates their ability to meet study objectives outlined in subdivision (a) and Sections 25254, 25255, and 25257 as the study team.(e) The commission shall hold a public proceeding and submit a report of the study teams findings and recommendations, including any statutory changes that may be required, to the Legislature, in compliance with Section 9795 of the Government Code, no later than 24 months after selecting the study team for the feasibility portion of the study, and no later than 36 months after selecting the study team for the implementation plan portion of the study. 25252. (a) The commission shall require the study team to select and convene an advisory council, with recommendations from the Disadvantaged Communities Advisory Group, by December 31, 2026, to participate in the study of the vision for a new energy system as outlined in Section 25255. The advisory council shall review and provide recommendations on the initial scope of the study and implementation plan and on all preliminary and final drafts. Comments and recommendations from the advisory council that are not incorporated by the study team shall be included as an addendum to the study.(b) (1) The advisory council shall be drawn from diverse backgrounds to represent interests of disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes throughout the IOUs service territories and represent geographically diverse areas of California and consist of at least 13 members who collectively represent the following lived experiences and subject matter expertise:(A) Tribal utilities.(B) Community choice aggregation.(C) Low-income residential ratepayer advocacy.(D) Equitable rate design and utility cost allocation.(E) Environmental justice, energy justice, or utility justice issues.(F) Racial and economic justice.(G) Survivors of IOU-caused wildfires.(H) Disability rights.(I) Federally recognized California Indian tribes.(J) Nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(K) Labor unions representing utility workers.(L) Inclusive workforce development.(M) Deep knowledge of distributed energy resources and grid architecture.(2) Members of the advisory council shall not be current or previous employees, or current contractors, of an electrical corporation, as defined in Section 218 of the Public Utilities Code.(c) Members of the advisory council shall be entitled to per diem compensation and reimbursement of expenses for meetings, upon appropriation by the Legislature.25253. (a) For purposes of carrying out this chapter, the study team may do all of the following:(1) Consult with any stakeholders as needed or appropriate.(2) Request the production of books, records, correspondence, figures, charts, memoranda, papers, and documents, and other relevant materials of any nature from the commission, the Public Utilities Commission, and the IOUs.(b) For purposes of carrying out this chapter, the study team shall do all of the following:(1) Collaborate with the advisory council and the commission, through the Public Advocates Office, to host a minimum of four public hearings in geographically diverse regions of the IOUs service territories and during a variety of times to accommodate different work schedules.(2) In its specific findings, clarify all assumptions for findings and include citations to the original data or source for those assumptions.(c) A member of the study team may, if authorized by the prime consultant, take any action that the overall consultant team is authorized to take pursuant to this section.(d) On behalf of the commission, the study team may acquire directly from the head of a state agency available information that they consider useful in fulfilling their deliverables. All state agencies shall cooperate with the commission on behalf of the study team with respect to such information and shall furnish all information requested by the study team to the extent permitted by law. The study team shall keep confidential any information received from a state agency that is confidential or exempt from the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) or subject to a nondisclosure agreement.(e) As consultants to the commission, the study team shall have the administrative, technical, and legal assistance of the Department of Justice, the commission, the Public Utilities Commission, and the State Air Resources Board.(f) The study team may procure supplies and services by contract in accordance with applicable laws and rules.(g) The study team may enter into subcontracts for purposes of conducting research or surveys, preparing reports, and performing other activities necessary for the fulfillment of their research deliverables with state departments, agencies, and other instrumentalities of the state, federal departments, agencies, and other federal instrumentalities, and private entities. Subcontractors shall also meet the qualifications outlined in paragraph (1) of subdivision (c) of Section 25251.(h) For purposes of carrying out this chapter, the commission, through the Public Advocates Office, may do all of the following in service of completion of deliverables for the contract:(1) Hold hearings and sit and act at any time and location in California.(2) Consult with any issueholders as deemed necessary to achieve the objectives of this chapter.(3) Request the attendance and testimony of witnesses.(4) Seek an order from a superior court compelling testimony or compliance with a subpoena, including from the IOUs executive leadership.25254. The historical energy justice assessment component of the study described in Section 25251 shall assess the IOUs historical and ongoing operations and impacts on California residents, wildlife, and ecologies, with a focus on impacts to disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission, broken down by ZIP Code, income, race, age, and other relevant demographics. The assessment shall include, but is not limited to, all of the following:(a) An assessment and quantification of the distribution of health harms and reduced lifespans resulting from wildfires, polluting energy generation facilities, and infrastructure.(b) An assessment and quantification of the economic distribution of clean energy investments, incentives, and ownership.(c) An assessment of the impacts of rate increases and the extent and distribution of energy burdens based on historical rates.(d) An assessment of the distribution and quantity of utility disconnections, including disconnections due to lack of payment and public safety power shutoffs.(e) An assessment of the emotional, economic, ecological, and safety-related impacts from disasters caused by the IOUs, including, but not limited to, wildfires, pipeline explosions, power shutoffs, deenergization events, and the potential health impacts and lifespan reductions from those impacts.(f) An assessment of the pollution and other ecological impacts from energy generating infrastructure and the potential health impacts and lifespan reductions from those impacts.(g) An assessment of the extent and distribution of delayed or lack of provision of electricity and gas service and hookups.(h) An assessment of the liability incurred by, and during, the IOUs ownership, including specifying the portion of risks and liabilities likely to be transferred to a successor entity.(i) A quantification of the IOUs current tax obligations to the state.(j) An assessment of lands taken or received that were previously owned and stewarded by federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(k) An assessment of the IOUs historical and ongoing impacts on California wildlife, endangered species, and ecologies.(l) An assessment and audit of the IOUs capital expenditures and operating expenses to identify the cost-effectiveness of infrastructure investments.25255. (a) The comparative analysis of the benefits and challenges component of transitioning the IOUs to a recommended successor entity portion of the study described in paragraph (2) of subdivision (a) of Section 25251 shall provide a comparative assessment of transitioning the IOUs to either a public entity, nonprofit public benefit corporation, or mutual benefit corporation, assess the overall feasibility of transitioning the IOUs to a successor entity, and identify priority energy just design features for a successor entity.(b) The comparative analysis shall comprise all of the following:(1) An assessment of all legal, economic, financial, governance, and other relevant aspects of the ownership types required to successfully transition the assets and operations of the IOUs to a nonprofit public benefit corporation, such as Golden State Energy, a mutual benefit corporation, or a publicly owned electric utility, which may be in existence or yet to be formed.(2) An assessment of whether there are any structural limitations or advantages of each ownership type relative to the successor entitys ability to serve the people of California and to achieving the following policy objectives:(A) A demonstrable reduction in electricity costs for customers over a 30-year period, with a focus on increasing energy bill affordability for low-income communities, disadvantaged communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes, ensuring electricity costs are less than 3 percent of household income.(B) Increased opportunity for labor benefits through maintaining pensions and increasing benefits for workers, increasing good union jobs and inclusive workforce development in the region.(C) Increased public accountability, trust, and transparency in governing structures, financial spending, maintenance, and infrastructure decisions.(c) The feasibility assessment shall include all of the following:(1) Identification of legal and regulatory issues, and recommendations for addressing these issues, that might arise from transitioning the assets and operations of the IOUs and their respective operations as described in this chapter, and post-transition, in order to do all of the following:(A) Maintain the authority for the establishment of municipal utility districts, rural electric cooperatives, and tribal utilities, and ensure the successor entity cooperates with other public entities.(B) Safeguard or strengthen the worker and labor benefits, including union protections, during and after the transition period, and provide for workers rights and a just transition for workers impacted by the decommissioning of unsafe, polluting infrastructure.(C) By no later than 2032, safely decommission generation, transmission, and piping infrastructure transferred to the successor entity that is unsafe and polluting, prioritizing infrastructure that is causing disproportionate harms in disadvantaged communities, low-income communities, federally recognized California Indian tribes, or nonfederally recognized California Native American tribes.(D) Manage future wildfire liability.(E) Equitably decommission gas infrastructure and transition towards electrification, prioritizing the decommissioning of gas powerplants in disadvantaged communities and replacement with community-owned distributed energy resources without unduly burdening ratepayers, especially low-income or disadvantaged ratepayers, with associated costs.(2) A preliminary evaluation of the long-term costs and benefits over at least a 30-year horizon of a transfer in ownership to a successor entity, including an assumption for clean energy, electrification, and grid investments at a pace in accordance with state climate goals. This evaluation shall incorporate all of the following:(A) The potential for securitization of debt, including consideration of tax-exempt bonding for municipal utilities.(B) Consideration of the portion of utility capital expenses paid for by ratepayer contributions.(C) Application of all legally claimed depreciation of assets by the IOUs.(D) Equitable finance and revenue sources that may be available to the successor entity for its operational needs, including for purchase, maintenance, and upgrades, with information regarding all of the following:(i) Mechanisms to support the creditworthiness of the successor entity during the early years of operation.(ii) Access to bonds.(iii) Long-term opportunities for public financing.(iv) Ability to leverage federal funding in the form of elective pay, as outlined in the Inflation Reduction Act of 2022 (Public Law 117-169).(v) Options for revenue collected from rates and other financial resources.(3) A thorough consideration of which IOU assets should be prioritized for transfer and a timeline for those transfers, including all of the following:(A) The merits or risks of splitting ownership of the IOUs distribution infrastructure, transmission infrastructure, program administration, generation, and retail energy services.(B) The merits or risks of splitting ownership of the IOUs electrical and gas infrastructure.(C) The merits or risks of splitting ownership by geographic territory.(D) A full consideration of which assets to prioritize for transfer and a timeline for those transfers, including consideration of grid architectures that maximize distributed energy resources and future needs for distribution system operator infrastructure.(E) An evaluation of potential benefits, if any, that may be realized by separating the ownership and operation of the electrical distribution system for future distribution system operator models.(d) The identification of just design features for a successor entity and the mechanisms to realize them shall include, but not be limited to, all of the following:(1) The acknowledgment, rectification, and repair of prior harms, as found in the historical energy justice assessment pursuant to Section 25254.(2) Increasing social equity, electrical system reliability and performance, ecological sustainability, and climate resilience, including the ability to adapt to adverse climate-related weather disasters and other economic, social, and infrastructural crises.(3) Minimizing environmental health harms in the region and in homes.(4) Enhancing stewardship of finite resources and fragile ecologies through reducing the need for future large scale buildout, land clearing, or installation of ecologically disruptive energy generation, transmission, and distribution assets, and minimizing extraction of critical minerals.(5) Focusing on disadvantaged communities, low-income communities, federally recognized California Indian tribes, and nonfederally recognized California Native American tribes in decisionmaking processes.(6) Creating innovative participatory governance and accountability structures that enable community members, including low-income members and users with disabilities, to meaningfully impact the priorities of the successor entity.(7) Adopting mechanisms for sustained public engagement and transparency that holds the successor entity accountable to its mission to serve the communitys well-being.(8) Creating alternative mechanisms to utility disconnections to cover nonpayment by customers.(9) Including nonenergy impacts, social costs and benefits, health impacts, and more equitable climate outcomes in evaluating cost-effectiveness and decisionmaking.(10) Creating governance of the successor entity in a manner that maximizes public participation and energy democracy, including all of the following:(A) Whether members of the board of directors of the successor entity should be appointed pursuant to Part 2 (commencing with Section 3420) of Division 1.7 of the Public Utilities Code, elected by the customers of the successor entity, or a combination of appointees and elected members, and what type of expertise or experience should be represented.(B) Term limits for members of the board of directors.(C) Size and representation of the board of directors.(D) Involvement of, and robust funding of, technical assistance mechanisms to support community-based organizations in contributing to the decisions of the board of directors.(E) Adequate full-time staffing needs for the board of directors.(11) Requirements on the operations of the successor entity, including on all of the following:(A) Data collection by the successor entity and the public availability of collected data.(B) Public engagement and transparency, including all of the following:(i) Public engagement timelines and processes for rate cases, budget planning, and other policy and program approvals.(ii) Public meetings, notices, and comment periods.(iii) Relationships with local government, including reporting and communication requirements on projects undertaken by the successor entity with defined local economic benefits.25256. (a) Upon completion of the study components described in Sections 25254 and 25255, the study team, in consultation with the advisory council, consistent with Section 25252, shall recommend a particular successor entity ownership type to the commission for further feasibility review and implementation considerations.(b) On or before September 30, 2028, the commission, through a public process, shall vote to approve the study and recommended a particular successor entity ownership type based on a rubric comparing each of the successor entity ownership types to the incumbent IOU model using the following criteria:(1) Long-term affordability for the state and for ratepayers.(2) Safety.(3) Reliability.(4) Climate resilience.(5) Local economic benefits.(6) Health impacts.(7) Energy justice. 25257. (a) If the study, as approved by the commission, finds that it is in the best long-term interests of the people and ecologies of California to transition away from the investor-owned utility model, the study team shall begin work to create a justice-centered implementation plan, as described in paragraph (3) of subdivision (a) of Section 25251, to outline a timeline and transition process to the successor entity, including recommendations for which branches of government or agencies should be responsible and coordinate with which portions of the public to ensure the transition fairly minimizes burdens and unintended consequences and fairly maximizes benefits in service of the public interest and necessity.(b) The implementation plan shall identify all appropriate implementation mechanisms, including statutory changes that may be required, recommendations for specific bylaws, operating procedures, governance structures, or otherwise to ensure the successor entity is structured, operationalized, and has the proper authority and mandate to ensure more just outcomes, based in part on findings pursuant to Sections 25254 and 25255.(c) The implementation plan shall additionally do all of the following:(1) Recommend mechanisms to fairly set the acquisition cost and valuation in as legally defensible and timely manner as possible, with the goal of avoiding lengthy periods of litigation over the acquisition cost.(2) Recommend an appropriate regulatory structure to clearly delineate the relationship between the Public Utilities Commission and the successor entity, including consideration of an independent oversight body for the successor entity.(3) Provide for community benefit agreements and other local economic benefit and cost savings to the maximum extent possible for new infrastructure investments and maintenance, prioritizing clean distributed energy resources.(d) The commission, through a public process, shall vote to approve the implementation plan on or before October 31, 2029. |
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| 155 | 131 | | |
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| 156 | 132 | | CHAPTER 3.5. Investor-Owned Utility Transition Feasibility Study |
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| 157 | 133 | | |
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| 158 | 134 | | CHAPTER 3.5. Investor-Owned Utility Transition Feasibility Study |
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| 159 | 135 | | |
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| 160 | 136 | | 25250. For purposes of this chapter, the following definitions apply:(a) Clean energy investments, incentives, and ownership refers to the levels of private investment or public incentives in energy resources eligible under the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code), and the entities that provided the investment or incentives and own the resources.(b) Critical minerals means those minerals specified by the United States Geological Survey as essential to the economic or national security of the United States, have a supply chain that is vulnerable to disruption, and serve an essential function in the manufacturing of a product, the absence of which would have significant consequences for the economic or national security of the United States. Critical minerals do not include fuel minerals, water, ice, or snow, or common varieties of sand, gravel, stone, pumice, cinders, or clay.(c) Disadvantaged communities advisory group means the disadvantaged communities advisory group established pursuant to subdivision (g) of Section 400 of the Public Utilities Code.(d) Disadvantaged community means a community identified pursuant to Section 39711 of the Health and Safety Code.(e) Distributed energy resources means distributed renewable generation resources, energy efficiency, energy storage, electric vehicles, and demand response technologies.(f) Endangered species means a native species or subspecies of a bird, mammal, fish, amphibian, reptile, or plant that is in serious danger of becoming extinct throughout all, or a significant portion, of its range due to one or more causes, including loss of habitat, change in habitat, overexploitation, predation, competition, or disease.(g) Energy burden means the expense of energy expenditures relative to overall household income.(h) Energy justice means the goal of achieving equity in both the social and economic participation in the energy systems, while also remediating social, economic, and health burdens on those historically harmed by the energy system, including disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(i) Equity, just, and justice mean the goal of creating systems, organizations, and societies that are fair and just, recognizing where disadvantages and barriers exist, and allocating resources and support to ensure equal access and opportunity for all populations.(j) Investor-owned utilities or IOUs means all of the following:(1) Pacific Gas and Electric Company, PG&E Corporation, any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within Pacific Gas and Electric Companys service territory, and any successor to any of the foregoing.(2) Southern California Edison, SCE, any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within Southern California Edisons service territory, and any successor to any of the foregoing.(3) Southern California Gas, a subsidiary of Sempra, SoCal Gas, and any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of gas service within Southern California Gas service territory, and any successor to any of the foregoing.(4) San Diego Gas and Electric, a subsidiary of Sempra, SDG&E, and any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within San Diego Gas and Electrics service territory, and any successor to any of the foregoing.(k) Just transition means a framework for a fair shift to an economy that is ecologically sustainable, equitable, and just for all its members.(l) Low-income means at or below 80 percent of the state median income.(m) Microgrid means an interconnected system of loads and energy resources, including, but not limited to, distributed energy resources, energy storage, demand response tools, or other management, forecasting, and analytical tools, appropriately sized to meet customer needs, within a clearly defined electrical boundary that can act as a single, controllable entity, and can connect to, disconnect from, or run in parallel with larger portions of the electrical grid, or can be managed and isolated to withstand larger disturbances and maintain electrical supply to connected critical infrastructure.(n) Study team means one or more qualified organizations, public institutions, or consulting firms that is awarded the request for proposal to develop the study pursuant to Section 25251.(o) Successor entity means a public entity, public benefit corporation, or mutual benefit corporation. |
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| 161 | 137 | | |
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| 162 | 138 | | |
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| 163 | 139 | | |
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| 164 | 140 | | 25250. For purposes of this chapter, the following definitions apply: |
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| 165 | 141 | | |
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| 166 | 142 | | (a) Clean energy investments, incentives, and ownership refers to the levels of private investment or public incentives in energy resources eligible under the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code), and the entities that provided the investment or incentives and own the resources. |
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| 167 | 143 | | |
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| 168 | 144 | | (b) Critical minerals means those minerals specified by the United States Geological Survey as essential to the economic or national security of the United States, have a supply chain that is vulnerable to disruption, and serve an essential function in the manufacturing of a product, the absence of which would have significant consequences for the economic or national security of the United States. Critical minerals do not include fuel minerals, water, ice, or snow, or common varieties of sand, gravel, stone, pumice, cinders, or clay. |
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| 169 | 145 | | |
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| 170 | 146 | | (c) Disadvantaged communities advisory group means the disadvantaged communities advisory group established pursuant to subdivision (g) of Section 400 of the Public Utilities Code. |
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| 171 | 147 | | |
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| 172 | 148 | | (d) Disadvantaged community means a community identified pursuant to Section 39711 of the Health and Safety Code. |
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| 173 | 149 | | |
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| 174 | 150 | | (e) Distributed energy resources means distributed renewable generation resources, energy efficiency, energy storage, electric vehicles, and demand response technologies. |
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| 175 | 151 | | |
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| 176 | 152 | | (f) Endangered species means a native species or subspecies of a bird, mammal, fish, amphibian, reptile, or plant that is in serious danger of becoming extinct throughout all, or a significant portion, of its range due to one or more causes, including loss of habitat, change in habitat, overexploitation, predation, competition, or disease. |
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| 177 | 153 | | |
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| 178 | 154 | | (g) Energy burden means the expense of energy expenditures relative to overall household income. |
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| 179 | 155 | | |
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| 180 | 156 | | (h) Energy justice means the goal of achieving equity in both the social and economic participation in the energy systems, while also remediating social, economic, and health burdens on those historically harmed by the energy system, including disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission. |
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| 181 | 157 | | |
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| 182 | 158 | | (i) Equity, just, and justice mean the goal of creating systems, organizations, and societies that are fair and just, recognizing where disadvantages and barriers exist, and allocating resources and support to ensure equal access and opportunity for all populations. |
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| 183 | 159 | | |
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| 184 | 160 | | (j) Investor-owned utilities or IOUs means all of the following: |
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| 185 | 161 | | |
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| 186 | 162 | | (1) Pacific Gas and Electric Company, PG&E Corporation, any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within Pacific Gas and Electric Companys service territory, and any successor to any of the foregoing. |
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| 187 | 163 | | |
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| 188 | 164 | | (2) Southern California Edison, SCE, any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within Southern California Edisons service territory, and any successor to any of the foregoing. |
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| 189 | 165 | | |
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| 190 | 166 | | (3) Southern California Gas, a subsidiary of Sempra, SoCal Gas, and any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of gas service within Southern California Gas service territory, and any successor to any of the foregoing. |
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| 191 | 167 | | |
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| 192 | 168 | | (4) San Diego Gas and Electric, a subsidiary of Sempra, SDG&E, and any subsidiary or affiliate of either of the foregoing that holds any assets related to the provision of electrical or gas service within San Diego Gas and Electrics service territory, and any successor to any of the foregoing. |
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| 193 | 169 | | |
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| 194 | 170 | | (k) Just transition means a framework for a fair shift to an economy that is ecologically sustainable, equitable, and just for all its members. |
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| 195 | 171 | | |
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| 196 | 172 | | (l) Low-income means at or below 80 percent of the state median income. |
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| 197 | 173 | | |
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| 198 | 174 | | (m) Microgrid means an interconnected system of loads and energy resources, including, but not limited to, distributed energy resources, energy storage, demand response tools, or other management, forecasting, and analytical tools, appropriately sized to meet customer needs, within a clearly defined electrical boundary that can act as a single, controllable entity, and can connect to, disconnect from, or run in parallel with larger portions of the electrical grid, or can be managed and isolated to withstand larger disturbances and maintain electrical supply to connected critical infrastructure. |
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| 199 | 175 | | |
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| 200 | 176 | | (n) Study team means one or more qualified organizations, public institutions, or consulting firms that is awarded the request for proposal to develop the study pursuant to Section 25251. |
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| 201 | 177 | | |
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| 202 | 178 | | (o) Successor entity means a public entity, public benefit corporation, or mutual benefit corporation. |
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| 203 | 179 | | |
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| 204 | 180 | | 25251. (a) The commission, on or before March 31, 2026, based on the scoring evaluation developed and conducted by the Disadvantaged Communities Advisory Group, and in coordination with the public advisor and the Public Utilities Commission, shall issue a request for proposals for a team to develop a study to do all of the following:(1) Consistent with Section 25254, conduct a historical energy justice assessment of the IOUs operations and impacts on California residents, wildlife, and ecologies, with a focus on disadvantaged communities, low-income communities, andfederally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(2) Consistent with Section 25255, complete a comparative analysis of the benefits and challenges of transitioning the IOUs to a successor entity in order to identify a recommended model, assess the feasibility of transitioning the IOUs to a successor entity, and identify priority just design features for the successor entity, with the goal of serving the public interest and necessity of the people and ecologies of California.(3) Consistent with Section 25257, if the study, as approved by the commission, finds that it is in the best long-term interests of the people and ecologies of California to transition away from the investor-owned utility model, create a justice-centered implementation plan for managing the transition, including all appropriate mechanisms and any statutory changes that may be required. (b) The request for proposals shall seek applications that contain one or more organizations, public universities, or consultants with a demonstrated commitment to working with disadvantaged communities, and include partnership with the Disadvantaged Communities Advisory Group, and one or more community-based organizations that have supported the formation of Golden State Energy. (c) Organization qualifications shall include all of the following:(1) An eligible organization or consultant shall not have received more than one-half their income in the last three years from or for investor-owned utilities. An organization or consultant that has more than 10 percent of their work from any investor-owned utilities in California shall be required to set up appropriate safeguards to prevent conflicts of interest in the study analysis. An eligible institution, department, or principle investigator within a university shall not have received more than 10 percent of their funding in the past five years from investor owned utilities.(2) An eligible organization or consultant team shall demonstrate:(A) Through references from at least three jurisdictions, experience in policy, finance, grid design, and structural redesign work performed for jurisdictions with a population size of at least 1,000,000 people or a geographic area of 500 square miles.(B) Through case studies of prior work, demonstrated ability to fairly engage and integrate multiple stakeholder perspectives involved in or impacted by renewable energy generation, distribution, or transmission systems.(C) A clear record of research that indicates knowledge of, and engagement with, multiple utility ownership models, including both municipal and investor owned utilities.(D) A clear record of research that demonstrates an understanding of the energy justice and distributional impacts of current energy systems and protocols across the utility system.(d) On or before June 30, 2026, the commission, based on scoring developed and conducted by the Disadvantaged Communities Advisory Group, and with supporting resources and recommendations from the Public Utilities Commission, shall select the team with the highest score that meets the qualifications outlined in subdivision (c) and demonstrates their ability to meet study objectives outlined in subdivision (a) and Sections 25254, 25255, and 25257 as the study team.(e) The commission shall hold a public proceeding and submit a report of the study teams findings and recommendations, including any statutory changes that may be required, to the Legislature, in compliance with Section 9795 of the Government Code, no later than 24 months after selecting the study team for the feasibility portion of the study, and no later than 36 months after selecting the study team for the implementation plan portion of the study. |
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| 205 | 181 | | |
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| 206 | 182 | | |
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| 207 | 183 | | |
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| 208 | 184 | | 25251. (a) The commission, on or before March 31, 2026, based on the scoring evaluation developed and conducted by the Disadvantaged Communities Advisory Group, and in coordination with the public advisor and the Public Utilities Commission, shall issue a request for proposals for a team to develop a study to do all of the following: |
|---|
| 209 | 185 | | |
|---|
| 210 | 186 | | (1) Consistent with Section 25254, conduct a historical energy justice assessment of the IOUs operations and impacts on California residents, wildlife, and ecologies, with a focus on disadvantaged communities, low-income communities, andfederally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission. |
|---|
| 211 | 187 | | |
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| 212 | 188 | | (2) Consistent with Section 25255, complete a comparative analysis of the benefits and challenges of transitioning the IOUs to a successor entity in order to identify a recommended model, assess the feasibility of transitioning the IOUs to a successor entity, and identify priority just design features for the successor entity, with the goal of serving the public interest and necessity of the people and ecologies of California. |
|---|
| 213 | 189 | | |
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| 214 | 190 | | (3) Consistent with Section 25257, if the study, as approved by the commission, finds that it is in the best long-term interests of the people and ecologies of California to transition away from the investor-owned utility model, create a justice-centered implementation plan for managing the transition, including all appropriate mechanisms and any statutory changes that may be required. |
|---|
| 215 | 191 | | |
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| 216 | 192 | | (b) The request for proposals shall seek applications that contain one or more organizations, public universities, or consultants with a demonstrated commitment to working with disadvantaged communities, and include partnership with the Disadvantaged Communities Advisory Group, and one or more community-based organizations that have supported the formation of Golden State Energy. |
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| 217 | 193 | | |
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| 218 | 194 | | (c) Organization qualifications shall include all of the following: |
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| 219 | 195 | | |
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| 220 | 196 | | (1) An eligible organization or consultant shall not have received more than one-half their income in the last three years from or for investor-owned utilities. An organization or consultant that has more than 10 percent of their work from any investor-owned utilities in California shall be required to set up appropriate safeguards to prevent conflicts of interest in the study analysis. An eligible institution, department, or principle investigator within a university shall not have received more than 10 percent of their funding in the past five years from investor owned utilities. |
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| 221 | 197 | | |
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| 222 | 198 | | (2) An eligible organization or consultant team shall demonstrate: |
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| 223 | 199 | | |
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| 224 | 200 | | (A) Through references from at least three jurisdictions, experience in policy, finance, grid design, and structural redesign work performed for jurisdictions with a population size of at least 1,000,000 people or a geographic area of 500 square miles. |
|---|
| 225 | 201 | | |
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| 226 | 202 | | (B) Through case studies of prior work, demonstrated ability to fairly engage and integrate multiple stakeholder perspectives involved in or impacted by renewable energy generation, distribution, or transmission systems. |
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| 227 | 203 | | |
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| 228 | 204 | | (C) A clear record of research that indicates knowledge of, and engagement with, multiple utility ownership models, including both municipal and investor owned utilities. |
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| 229 | 205 | | |
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| 230 | 206 | | (D) A clear record of research that demonstrates an understanding of the energy justice and distributional impacts of current energy systems and protocols across the utility system. |
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| 231 | 207 | | |
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| 232 | 208 | | (d) On or before June 30, 2026, the commission, based on scoring developed and conducted by the Disadvantaged Communities Advisory Group, and with supporting resources and recommendations from the Public Utilities Commission, shall select the team with the highest score that meets the qualifications outlined in subdivision (c) and demonstrates their ability to meet study objectives outlined in subdivision (a) and Sections 25254, 25255, and 25257 as the study team. |
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| 233 | 209 | | |
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| 234 | 210 | | (e) The commission shall hold a public proceeding and submit a report of the study teams findings and recommendations, including any statutory changes that may be required, to the Legislature, in compliance with Section 9795 of the Government Code, no later than 24 months after selecting the study team for the feasibility portion of the study, and no later than 36 months after selecting the study team for the implementation plan portion of the study. |
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| 235 | 211 | | |
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| 236 | 212 | | 25252. (a) The commission shall require the study team to select and convene an advisory council, with recommendations from the Disadvantaged Communities Advisory Group, by December 31, 2026, to participate in the study of the vision for a new energy system as outlined in Section 25255. The advisory council shall review and provide recommendations on the initial scope of the study and implementation plan and on all preliminary and final drafts. Comments and recommendations from the advisory council that are not incorporated by the study team shall be included as an addendum to the study.(b) (1) The advisory council shall be drawn from diverse backgrounds to represent interests of disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes throughout the IOUs service territories and represent geographically diverse areas of California and consist of at least 13 members who collectively represent the following lived experiences and subject matter expertise:(A) Tribal utilities.(B) Community choice aggregation.(C) Low-income residential ratepayer advocacy.(D) Equitable rate design and utility cost allocation.(E) Environmental justice, energy justice, or utility justice issues.(F) Racial and economic justice.(G) Survivors of IOU-caused wildfires.(H) Disability rights.(I) Federally recognized California Indian tribes.(J) Nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(K) Labor unions representing utility workers.(L) Inclusive workforce development.(M) Deep knowledge of distributed energy resources and grid architecture.(2) Members of the advisory council shall not be current or previous employees, or current contractors, of an electrical corporation, as defined in Section 218 of the Public Utilities Code.(c) Members of the advisory council shall be entitled to per diem compensation and reimbursement of expenses for meetings, upon appropriation by the Legislature. |
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| 237 | 213 | | |
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| 238 | 214 | | |
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| 239 | 215 | | |
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| 240 | 216 | | 25252. (a) The commission shall require the study team to select and convene an advisory council, with recommendations from the Disadvantaged Communities Advisory Group, by December 31, 2026, to participate in the study of the vision for a new energy system as outlined in Section 25255. The advisory council shall review and provide recommendations on the initial scope of the study and implementation plan and on all preliminary and final drafts. Comments and recommendations from the advisory council that are not incorporated by the study team shall be included as an addendum to the study. |
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| 241 | 217 | | |
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| 242 | 218 | | (b) (1) The advisory council shall be drawn from diverse backgrounds to represent interests of disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes throughout the IOUs service territories and represent geographically diverse areas of California and consist of at least 13 members who collectively represent the following lived experiences and subject matter expertise: |
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| 243 | 219 | | |
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| 244 | 220 | | (A) Tribal utilities. |
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| 245 | 221 | | |
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| 246 | 222 | | (B) Community choice aggregation. |
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| 247 | 223 | | |
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| 248 | 224 | | (C) Low-income residential ratepayer advocacy. |
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| 249 | 225 | | |
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| 250 | 226 | | (D) Equitable rate design and utility cost allocation. |
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| 251 | 227 | | |
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| 252 | 228 | | (E) Environmental justice, energy justice, or utility justice issues. |
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| 253 | 229 | | |
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| 254 | 230 | | (F) Racial and economic justice. |
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| 255 | 231 | | |
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| 256 | 232 | | (G) Survivors of IOU-caused wildfires. |
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| 257 | 233 | | |
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| 258 | 234 | | (H) Disability rights. |
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| 259 | 235 | | |
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| 260 | 236 | | (I) Federally recognized California Indian tribes. |
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| 261 | 237 | | |
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| 262 | 238 | | (J) Nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission. |
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| 263 | 239 | | |
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| 264 | 240 | | (K) Labor unions representing utility workers. |
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| 265 | 241 | | |
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| 266 | 242 | | (L) Inclusive workforce development. |
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| 267 | 243 | | |
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| 268 | 244 | | (M) Deep knowledge of distributed energy resources and grid architecture. |
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| 269 | 245 | | |
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| 270 | 246 | | (2) Members of the advisory council shall not be current or previous employees, or current contractors, of an electrical corporation, as defined in Section 218 of the Public Utilities Code. |
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| 271 | 247 | | |
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| 272 | 248 | | (c) Members of the advisory council shall be entitled to per diem compensation and reimbursement of expenses for meetings, upon appropriation by the Legislature. |
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| 273 | 249 | | |
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| 274 | 250 | | 25253. (a) For purposes of carrying out this chapter, the study team may do all of the following:(1) Consult with any stakeholders as needed or appropriate.(2) Request the production of books, records, correspondence, figures, charts, memoranda, papers, and documents, and other relevant materials of any nature from the commission, the Public Utilities Commission, and the IOUs.(b) For purposes of carrying out this chapter, the study team shall do all of the following:(1) Collaborate with the advisory council and the commission, through the Public Advocates Office, to host a minimum of four public hearings in geographically diverse regions of the IOUs service territories and during a variety of times to accommodate different work schedules.(2) In its specific findings, clarify all assumptions for findings and include citations to the original data or source for those assumptions.(c) A member of the study team may, if authorized by the prime consultant, take any action that the overall consultant team is authorized to take pursuant to this section.(d) On behalf of the commission, the study team may acquire directly from the head of a state agency available information that they consider useful in fulfilling their deliverables. All state agencies shall cooperate with the commission on behalf of the study team with respect to such information and shall furnish all information requested by the study team to the extent permitted by law. The study team shall keep confidential any information received from a state agency that is confidential or exempt from the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) or subject to a nondisclosure agreement.(e) As consultants to the commission, the study team shall have the administrative, technical, and legal assistance of the Department of Justice, the commission, the Public Utilities Commission, and the State Air Resources Board.(f) The study team may procure supplies and services by contract in accordance with applicable laws and rules.(g) The study team may enter into subcontracts for purposes of conducting research or surveys, preparing reports, and performing other activities necessary for the fulfillment of their research deliverables with state departments, agencies, and other instrumentalities of the state, federal departments, agencies, and other federal instrumentalities, and private entities. Subcontractors shall also meet the qualifications outlined in paragraph (1) of subdivision (c) of Section 25251.(h) For purposes of carrying out this chapter, the commission, through the Public Advocates Office, may do all of the following in service of completion of deliverables for the contract:(1) Hold hearings and sit and act at any time and location in California.(2) Consult with any issueholders as deemed necessary to achieve the objectives of this chapter.(3) Request the attendance and testimony of witnesses.(4) Seek an order from a superior court compelling testimony or compliance with a subpoena, including from the IOUs executive leadership. |
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| 275 | 251 | | |
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| 276 | 252 | | |
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| 277 | 253 | | |
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| 278 | 254 | | 25253. (a) For purposes of carrying out this chapter, the study team may do all of the following: |
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| 279 | 255 | | |
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| 280 | 256 | | (1) Consult with any stakeholders as needed or appropriate. |
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| 281 | 257 | | |
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| 282 | 258 | | (2) Request the production of books, records, correspondence, figures, charts, memoranda, papers, and documents, and other relevant materials of any nature from the commission, the Public Utilities Commission, and the IOUs. |
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| 283 | 259 | | |
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| 284 | 260 | | (b) For purposes of carrying out this chapter, the study team shall do all of the following: |
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| 285 | 261 | | |
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| 286 | 262 | | (1) Collaborate with the advisory council and the commission, through the Public Advocates Office, to host a minimum of four public hearings in geographically diverse regions of the IOUs service territories and during a variety of times to accommodate different work schedules. |
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| 287 | 263 | | |
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| 288 | 264 | | (2) In its specific findings, clarify all assumptions for findings and include citations to the original data or source for those assumptions. |
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| 289 | 265 | | |
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| 290 | 266 | | (c) A member of the study team may, if authorized by the prime consultant, take any action that the overall consultant team is authorized to take pursuant to this section. |
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| 291 | 267 | | |
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| 292 | 268 | | (d) On behalf of the commission, the study team may acquire directly from the head of a state agency available information that they consider useful in fulfilling their deliverables. All state agencies shall cooperate with the commission on behalf of the study team with respect to such information and shall furnish all information requested by the study team to the extent permitted by law. The study team shall keep confidential any information received from a state agency that is confidential or exempt from the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) or subject to a nondisclosure agreement. |
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| 293 | 269 | | |
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| 294 | 270 | | (e) As consultants to the commission, the study team shall have the administrative, technical, and legal assistance of the Department of Justice, the commission, the Public Utilities Commission, and the State Air Resources Board. |
|---|
| 295 | 271 | | |
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| 296 | 272 | | (f) The study team may procure supplies and services by contract in accordance with applicable laws and rules. |
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| 297 | 273 | | |
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| 298 | 274 | | (g) The study team may enter into subcontracts for purposes of conducting research or surveys, preparing reports, and performing other activities necessary for the fulfillment of their research deliverables with state departments, agencies, and other instrumentalities of the state, federal departments, agencies, and other federal instrumentalities, and private entities. Subcontractors shall also meet the qualifications outlined in paragraph (1) of subdivision (c) of Section 25251. |
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| 299 | 275 | | |
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| 300 | 276 | | (h) For purposes of carrying out this chapter, the commission, through the Public Advocates Office, may do all of the following in service of completion of deliverables for the contract: |
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| 301 | 277 | | |
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| 302 | 278 | | (1) Hold hearings and sit and act at any time and location in California. |
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| 303 | 279 | | |
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| 304 | 280 | | (2) Consult with any issueholders as deemed necessary to achieve the objectives of this chapter. |
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| 305 | 281 | | |
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| 306 | 282 | | (3) Request the attendance and testimony of witnesses. |
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| 307 | 283 | | |
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| 308 | 284 | | (4) Seek an order from a superior court compelling testimony or compliance with a subpoena, including from the IOUs executive leadership. |
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| 309 | 285 | | |
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| 310 | 286 | | 25254. The historical energy justice assessment component of the study described in Section 25251 shall assess the IOUs historical and ongoing operations and impacts on California residents, wildlife, and ecologies, with a focus on impacts to disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission, broken down by ZIP Code, income, race, age, and other relevant demographics. The assessment shall include, but is not limited to, all of the following:(a) An assessment and quantification of the distribution of health harms and reduced lifespans resulting from wildfires, polluting energy generation facilities, and infrastructure.(b) An assessment and quantification of the economic distribution of clean energy investments, incentives, and ownership.(c) An assessment of the impacts of rate increases and the extent and distribution of energy burdens based on historical rates.(d) An assessment of the distribution and quantity of utility disconnections, including disconnections due to lack of payment and public safety power shutoffs.(e) An assessment of the emotional, economic, ecological, and safety-related impacts from disasters caused by the IOUs, including, but not limited to, wildfires, pipeline explosions, power shutoffs, deenergization events, and the potential health impacts and lifespan reductions from those impacts.(f) An assessment of the pollution and other ecological impacts from energy generating infrastructure and the potential health impacts and lifespan reductions from those impacts.(g) An assessment of the extent and distribution of delayed or lack of provision of electricity and gas service and hookups.(h) An assessment of the liability incurred by, and during, the IOUs ownership, including specifying the portion of risks and liabilities likely to be transferred to a successor entity.(i) A quantification of the IOUs current tax obligations to the state.(j) An assessment of lands taken or received that were previously owned and stewarded by federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission.(k) An assessment of the IOUs historical and ongoing impacts on California wildlife, endangered species, and ecologies.(l) An assessment and audit of the IOUs capital expenditures and operating expenses to identify the cost-effectiveness of infrastructure investments. |
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| 311 | 287 | | |
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| 312 | 288 | | |
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| 313 | 289 | | |
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| 314 | 290 | | 25254. The historical energy justice assessment component of the study described in Section 25251 shall assess the IOUs historical and ongoing operations and impacts on California residents, wildlife, and ecologies, with a focus on impacts to disadvantaged communities, low-income communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission, broken down by ZIP Code, income, race, age, and other relevant demographics. The assessment shall include, but is not limited to, all of the following: |
|---|
| 315 | 291 | | |
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| 316 | 292 | | (a) An assessment and quantification of the distribution of health harms and reduced lifespans resulting from wildfires, polluting energy generation facilities, and infrastructure. |
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| 317 | 293 | | |
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| 318 | 294 | | (b) An assessment and quantification of the economic distribution of clean energy investments, incentives, and ownership. |
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| 319 | 295 | | |
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| 320 | 296 | | (c) An assessment of the impacts of rate increases and the extent and distribution of energy burdens based on historical rates. |
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| 321 | 297 | | |
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| 322 | 298 | | (d) An assessment of the distribution and quantity of utility disconnections, including disconnections due to lack of payment and public safety power shutoffs. |
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| 323 | 299 | | |
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| 324 | 300 | | (e) An assessment of the emotional, economic, ecological, and safety-related impacts from disasters caused by the IOUs, including, but not limited to, wildfires, pipeline explosions, power shutoffs, deenergization events, and the potential health impacts and lifespan reductions from those impacts. |
|---|
| 325 | 301 | | |
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| 326 | 302 | | (f) An assessment of the pollution and other ecological impacts from energy generating infrastructure and the potential health impacts and lifespan reductions from those impacts. |
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| 327 | 303 | | |
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| 328 | 304 | | (g) An assessment of the extent and distribution of delayed or lack of provision of electricity and gas service and hookups. |
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| 329 | 305 | | |
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| 330 | 306 | | (h) An assessment of the liability incurred by, and during, the IOUs ownership, including specifying the portion of risks and liabilities likely to be transferred to a successor entity. |
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| 331 | 307 | | |
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| 332 | 308 | | (i) A quantification of the IOUs current tax obligations to the state. |
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| 333 | 309 | | |
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| 334 | 310 | | (j) An assessment of lands taken or received that were previously owned and stewarded by federally recognized California Indian tribes and nonfederally recognized California Native American tribes that are on the list maintained by the Native American Heritage Commission. |
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| 335 | 311 | | |
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| 336 | 312 | | (k) An assessment of the IOUs historical and ongoing impacts on California wildlife, endangered species, and ecologies. |
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| 337 | 313 | | |
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| 338 | 314 | | (l) An assessment and audit of the IOUs capital expenditures and operating expenses to identify the cost-effectiveness of infrastructure investments. |
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| 339 | 315 | | |
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| 340 | 316 | | 25255. (a) The comparative analysis of the benefits and challenges component of transitioning the IOUs to a recommended successor entity portion of the study described in paragraph (2) of subdivision (a) of Section 25251 shall provide a comparative assessment of transitioning the IOUs to either a public entity, nonprofit public benefit corporation, or mutual benefit corporation, assess the overall feasibility of transitioning the IOUs to a successor entity, and identify priority energy just design features for a successor entity.(b) The comparative analysis shall comprise all of the following:(1) An assessment of all legal, economic, financial, governance, and other relevant aspects of the ownership types required to successfully transition the assets and operations of the IOUs to a nonprofit public benefit corporation, such as Golden State Energy, a mutual benefit corporation, or a publicly owned electric utility, which may be in existence or yet to be formed.(2) An assessment of whether there are any structural limitations or advantages of each ownership type relative to the successor entitys ability to serve the people of California and to achieving the following policy objectives:(A) A demonstrable reduction in electricity costs for customers over a 30-year period, with a focus on increasing energy bill affordability for low-income communities, disadvantaged communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes, ensuring electricity costs are less than 3 percent of household income.(B) Increased opportunity for labor benefits through maintaining pensions and increasing benefits for workers, increasing good union jobs and inclusive workforce development in the region.(C) Increased public accountability, trust, and transparency in governing structures, financial spending, maintenance, and infrastructure decisions.(c) The feasibility assessment shall include all of the following:(1) Identification of legal and regulatory issues, and recommendations for addressing these issues, that might arise from transitioning the assets and operations of the IOUs and their respective operations as described in this chapter, and post-transition, in order to do all of the following:(A) Maintain the authority for the establishment of municipal utility districts, rural electric cooperatives, and tribal utilities, and ensure the successor entity cooperates with other public entities.(B) Safeguard or strengthen the worker and labor benefits, including union protections, during and after the transition period, and provide for workers rights and a just transition for workers impacted by the decommissioning of unsafe, polluting infrastructure.(C) By no later than 2032, safely decommission generation, transmission, and piping infrastructure transferred to the successor entity that is unsafe and polluting, prioritizing infrastructure that is causing disproportionate harms in disadvantaged communities, low-income communities, federally recognized California Indian tribes, or nonfederally recognized California Native American tribes.(D) Manage future wildfire liability.(E) Equitably decommission gas infrastructure and transition towards electrification, prioritizing the decommissioning of gas powerplants in disadvantaged communities and replacement with community-owned distributed energy resources without unduly burdening ratepayers, especially low-income or disadvantaged ratepayers, with associated costs.(2) A preliminary evaluation of the long-term costs and benefits over at least a 30-year horizon of a transfer in ownership to a successor entity, including an assumption for clean energy, electrification, and grid investments at a pace in accordance with state climate goals. This evaluation shall incorporate all of the following:(A) The potential for securitization of debt, including consideration of tax-exempt bonding for municipal utilities.(B) Consideration of the portion of utility capital expenses paid for by ratepayer contributions.(C) Application of all legally claimed depreciation of assets by the IOUs.(D) Equitable finance and revenue sources that may be available to the successor entity for its operational needs, including for purchase, maintenance, and upgrades, with information regarding all of the following:(i) Mechanisms to support the creditworthiness of the successor entity during the early years of operation.(ii) Access to bonds.(iii) Long-term opportunities for public financing.(iv) Ability to leverage federal funding in the form of elective pay, as outlined in the Inflation Reduction Act of 2022 (Public Law 117-169).(v) Options for revenue collected from rates and other financial resources.(3) A thorough consideration of which IOU assets should be prioritized for transfer and a timeline for those transfers, including all of the following:(A) The merits or risks of splitting ownership of the IOUs distribution infrastructure, transmission infrastructure, program administration, generation, and retail energy services.(B) The merits or risks of splitting ownership of the IOUs electrical and gas infrastructure.(C) The merits or risks of splitting ownership by geographic territory.(D) A full consideration of which assets to prioritize for transfer and a timeline for those transfers, including consideration of grid architectures that maximize distributed energy resources and future needs for distribution system operator infrastructure.(E) An evaluation of potential benefits, if any, that may be realized by separating the ownership and operation of the electrical distribution system for future distribution system operator models.(d) The identification of just design features for a successor entity and the mechanisms to realize them shall include, but not be limited to, all of the following:(1) The acknowledgment, rectification, and repair of prior harms, as found in the historical energy justice assessment pursuant to Section 25254.(2) Increasing social equity, electrical system reliability and performance, ecological sustainability, and climate resilience, including the ability to adapt to adverse climate-related weather disasters and other economic, social, and infrastructural crises.(3) Minimizing environmental health harms in the region and in homes.(4) Enhancing stewardship of finite resources and fragile ecologies through reducing the need for future large scale buildout, land clearing, or installation of ecologically disruptive energy generation, transmission, and distribution assets, and minimizing extraction of critical minerals.(5) Focusing on disadvantaged communities, low-income communities, federally recognized California Indian tribes, and nonfederally recognized California Native American tribes in decisionmaking processes.(6) Creating innovative participatory governance and accountability structures that enable community members, including low-income members and users with disabilities, to meaningfully impact the priorities of the successor entity.(7) Adopting mechanisms for sustained public engagement and transparency that holds the successor entity accountable to its mission to serve the communitys well-being.(8) Creating alternative mechanisms to utility disconnections to cover nonpayment by customers.(9) Including nonenergy impacts, social costs and benefits, health impacts, and more equitable climate outcomes in evaluating cost-effectiveness and decisionmaking.(10) Creating governance of the successor entity in a manner that maximizes public participation and energy democracy, including all of the following:(A) Whether members of the board of directors of the successor entity should be appointed pursuant to Part 2 (commencing with Section 3420) of Division 1.7 of the Public Utilities Code, elected by the customers of the successor entity, or a combination of appointees and elected members, and what type of expertise or experience should be represented.(B) Term limits for members of the board of directors.(C) Size and representation of the board of directors.(D) Involvement of, and robust funding of, technical assistance mechanisms to support community-based organizations in contributing to the decisions of the board of directors.(E) Adequate full-time staffing needs for the board of directors.(11) Requirements on the operations of the successor entity, including on all of the following:(A) Data collection by the successor entity and the public availability of collected data.(B) Public engagement and transparency, including all of the following:(i) Public engagement timelines and processes for rate cases, budget planning, and other policy and program approvals.(ii) Public meetings, notices, and comment periods.(iii) Relationships with local government, including reporting and communication requirements on projects undertaken by the successor entity with defined local economic benefits. |
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| 341 | 317 | | |
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| 342 | 318 | | |
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| 343 | 319 | | |
|---|
| 344 | 320 | | 25255. (a) The comparative analysis of the benefits and challenges component of transitioning the IOUs to a recommended successor entity portion of the study described in paragraph (2) of subdivision (a) of Section 25251 shall provide a comparative assessment of transitioning the IOUs to either a public entity, nonprofit public benefit corporation, or mutual benefit corporation, assess the overall feasibility of transitioning the IOUs to a successor entity, and identify priority energy just design features for a successor entity. |
|---|
| 345 | 321 | | |
|---|
| 346 | 322 | | (b) The comparative analysis shall comprise all of the following: |
|---|
| 347 | 323 | | |
|---|
| 348 | 324 | | (1) An assessment of all legal, economic, financial, governance, and other relevant aspects of the ownership types required to successfully transition the assets and operations of the IOUs to a nonprofit public benefit corporation, such as Golden State Energy, a mutual benefit corporation, or a publicly owned electric utility, which may be in existence or yet to be formed. |
|---|
| 349 | 325 | | |
|---|
| 350 | 326 | | (2) An assessment of whether there are any structural limitations or advantages of each ownership type relative to the successor entitys ability to serve the people of California and to achieving the following policy objectives: |
|---|
| 351 | 327 | | |
|---|
| 352 | 328 | | (A) A demonstrable reduction in electricity costs for customers over a 30-year period, with a focus on increasing energy bill affordability for low-income communities, disadvantaged communities, and federally recognized California Indian tribes and nonfederally recognized California Native American tribes, ensuring electricity costs are less than 3 percent of household income. |
|---|
| 353 | 329 | | |
|---|
| 354 | 330 | | (B) Increased opportunity for labor benefits through maintaining pensions and increasing benefits for workers, increasing good union jobs and inclusive workforce development in the region. |
|---|
| 355 | 331 | | |
|---|
| 356 | 332 | | (C) Increased public accountability, trust, and transparency in governing structures, financial spending, maintenance, and infrastructure decisions. |
|---|
| 357 | 333 | | |
|---|
| 358 | 334 | | (c) The feasibility assessment shall include all of the following: |
|---|
| 359 | 335 | | |
|---|
| 360 | 336 | | (1) Identification of legal and regulatory issues, and recommendations for addressing these issues, that might arise from transitioning the assets and operations of the IOUs and their respective operations as described in this chapter, and post-transition, in order to do all of the following: |
|---|
| 361 | 337 | | |
|---|
| 362 | 338 | | (A) Maintain the authority for the establishment of municipal utility districts, rural electric cooperatives, and tribal utilities, and ensure the successor entity cooperates with other public entities. |
|---|
| 363 | 339 | | |
|---|
| 364 | 340 | | (B) Safeguard or strengthen the worker and labor benefits, including union protections, during and after the transition period, and provide for workers rights and a just transition for workers impacted by the decommissioning of unsafe, polluting infrastructure. |
|---|
| 365 | 341 | | |
|---|
| 366 | 342 | | (C) By no later than 2032, safely decommission generation, transmission, and piping infrastructure transferred to the successor entity that is unsafe and polluting, prioritizing infrastructure that is causing disproportionate harms in disadvantaged communities, low-income communities, federally recognized California Indian tribes, or nonfederally recognized California Native American tribes. |
|---|
| 367 | 343 | | |
|---|
| 368 | 344 | | (D) Manage future wildfire liability. |
|---|
| 369 | 345 | | |
|---|
| 370 | 346 | | (E) Equitably decommission gas infrastructure and transition towards electrification, prioritizing the decommissioning of gas powerplants in disadvantaged communities and replacement with community-owned distributed energy resources without unduly burdening ratepayers, especially low-income or disadvantaged ratepayers, with associated costs. |
|---|
| 371 | 347 | | |
|---|
| 372 | 348 | | (2) A preliminary evaluation of the long-term costs and benefits over at least a 30-year horizon of a transfer in ownership to a successor entity, including an assumption for clean energy, electrification, and grid investments at a pace in accordance with state climate goals. This evaluation shall incorporate all of the following: |
|---|
| 373 | 349 | | |
|---|
| 374 | 350 | | (A) The potential for securitization of debt, including consideration of tax-exempt bonding for municipal utilities. |
|---|
| 375 | 351 | | |
|---|
| 376 | 352 | | (B) Consideration of the portion of utility capital expenses paid for by ratepayer contributions. |
|---|
| 377 | 353 | | |
|---|
| 378 | 354 | | (C) Application of all legally claimed depreciation of assets by the IOUs. |
|---|
| 379 | 355 | | |
|---|
| 380 | 356 | | (D) Equitable finance and revenue sources that may be available to the successor entity for its operational needs, including for purchase, maintenance, and upgrades, with information regarding all of the following: |
|---|
| 381 | 357 | | |
|---|
| 382 | 358 | | (i) Mechanisms to support the creditworthiness of the successor entity during the early years of operation. |
|---|
| 383 | 359 | | |
|---|
| 384 | 360 | | (ii) Access to bonds. |
|---|
| 385 | 361 | | |
|---|
| 386 | 362 | | (iii) Long-term opportunities for public financing. |
|---|
| 387 | 363 | | |
|---|
| 388 | 364 | | (iv) Ability to leverage federal funding in the form of elective pay, as outlined in the Inflation Reduction Act of 2022 (Public Law 117-169). |
|---|
| 389 | 365 | | |
|---|
| 390 | 366 | | (v) Options for revenue collected from rates and other financial resources. |
|---|
| 391 | 367 | | |
|---|
| 392 | 368 | | (3) A thorough consideration of which IOU assets should be prioritized for transfer and a timeline for those transfers, including all of the following: |
|---|
| 393 | 369 | | |
|---|
| 394 | 370 | | (A) The merits or risks of splitting ownership of the IOUs distribution infrastructure, transmission infrastructure, program administration, generation, and retail energy services. |
|---|
| 395 | 371 | | |
|---|
| 396 | 372 | | (B) The merits or risks of splitting ownership of the IOUs electrical and gas infrastructure. |
|---|
| 397 | 373 | | |
|---|
| 398 | 374 | | (C) The merits or risks of splitting ownership by geographic territory. |
|---|
| 399 | 375 | | |
|---|
| 400 | 376 | | (D) A full consideration of which assets to prioritize for transfer and a timeline for those transfers, including consideration of grid architectures that maximize distributed energy resources and future needs for distribution system operator infrastructure. |
|---|
| 401 | 377 | | |
|---|
| 402 | 378 | | (E) An evaluation of potential benefits, if any, that may be realized by separating the ownership and operation of the electrical distribution system for future distribution system operator models. |
|---|
| 403 | 379 | | |
|---|
| 404 | 380 | | (d) The identification of just design features for a successor entity and the mechanisms to realize them shall include, but not be limited to, all of the following: |
|---|
| 405 | 381 | | |
|---|
| 406 | 382 | | (1) The acknowledgment, rectification, and repair of prior harms, as found in the historical energy justice assessment pursuant to Section 25254. |
|---|
| 407 | 383 | | |
|---|
| 408 | 384 | | (2) Increasing social equity, electrical system reliability and performance, ecological sustainability, and climate resilience, including the ability to adapt to adverse climate-related weather disasters and other economic, social, and infrastructural crises. |
|---|
| 409 | 385 | | |
|---|
| 410 | 386 | | (3) Minimizing environmental health harms in the region and in homes. |
|---|
| 411 | 387 | | |
|---|
| 412 | 388 | | (4) Enhancing stewardship of finite resources and fragile ecologies through reducing the need for future large scale buildout, land clearing, or installation of ecologically disruptive energy generation, transmission, and distribution assets, and minimizing extraction of critical minerals. |
|---|
| 413 | 389 | | |
|---|
| 414 | 390 | | (5) Focusing on disadvantaged communities, low-income communities, federally recognized California Indian tribes, and nonfederally recognized California Native American tribes in decisionmaking processes. |
|---|
| 415 | 391 | | |
|---|
| 416 | 392 | | (6) Creating innovative participatory governance and accountability structures that enable community members, including low-income members and users with disabilities, to meaningfully impact the priorities of the successor entity. |
|---|
| 417 | 393 | | |
|---|
| 418 | 394 | | (7) Adopting mechanisms for sustained public engagement and transparency that holds the successor entity accountable to its mission to serve the communitys well-being. |
|---|
| 419 | 395 | | |
|---|
| 420 | 396 | | (8) Creating alternative mechanisms to utility disconnections to cover nonpayment by customers. |
|---|
| 421 | 397 | | |
|---|
| 422 | 398 | | (9) Including nonenergy impacts, social costs and benefits, health impacts, and more equitable climate outcomes in evaluating cost-effectiveness and decisionmaking. |
|---|
| 423 | 399 | | |
|---|
| 424 | 400 | | (10) Creating governance of the successor entity in a manner that maximizes public participation and energy democracy, including all of the following: |
|---|
| 425 | 401 | | |
|---|
| 426 | 402 | | (A) Whether members of the board of directors of the successor entity should be appointed pursuant to Part 2 (commencing with Section 3420) of Division 1.7 of the Public Utilities Code, elected by the customers of the successor entity, or a combination of appointees and elected members, and what type of expertise or experience should be represented. |
|---|
| 427 | 403 | | |
|---|
| 428 | 404 | | (B) Term limits for members of the board of directors. |
|---|
| 429 | 405 | | |
|---|
| 430 | 406 | | (C) Size and representation of the board of directors. |
|---|
| 431 | 407 | | |
|---|
| 432 | 408 | | (D) Involvement of, and robust funding of, technical assistance mechanisms to support community-based organizations in contributing to the decisions of the board of directors. |
|---|
| 433 | 409 | | |
|---|
| 434 | 410 | | (E) Adequate full-time staffing needs for the board of directors. |
|---|
| 435 | 411 | | |
|---|
| 436 | 412 | | (11) Requirements on the operations of the successor entity, including on all of the following: |
|---|
| 437 | 413 | | |
|---|
| 438 | 414 | | (A) Data collection by the successor entity and the public availability of collected data. |
|---|
| 439 | 415 | | |
|---|
| 440 | 416 | | (B) Public engagement and transparency, including all of the following: |
|---|
| 441 | 417 | | |
|---|
| 442 | 418 | | (i) Public engagement timelines and processes for rate cases, budget planning, and other policy and program approvals. |
|---|
| 443 | 419 | | |
|---|
| 444 | 420 | | (ii) Public meetings, notices, and comment periods. |
|---|
| 445 | 421 | | |
|---|
| 446 | 422 | | (iii) Relationships with local government, including reporting and communication requirements on projects undertaken by the successor entity with defined local economic benefits. |
|---|
| 447 | 423 | | |
|---|
| 448 | 424 | | 25256. (a) Upon completion of the study components described in Sections 25254 and 25255, the study team, in consultation with the advisory council, consistent with Section 25252, shall recommend a particular successor entity ownership type to the commission for further feasibility review and implementation considerations.(b) On or before September 30, 2028, the commission, through a public process, shall vote to approve the study and recommended a particular successor entity ownership type based on a rubric comparing each of the successor entity ownership types to the incumbent IOU model using the following criteria:(1) Long-term affordability for the state and for ratepayers.(2) Safety.(3) Reliability.(4) Climate resilience.(5) Local economic benefits.(6) Health impacts.(7) Energy justice. |
|---|
| 449 | 425 | | |
|---|
| 450 | 426 | | |
|---|
| 451 | 427 | | |
|---|
| 452 | 428 | | 25256. (a) Upon completion of the study components described in Sections 25254 and 25255, the study team, in consultation with the advisory council, consistent with Section 25252, shall recommend a particular successor entity ownership type to the commission for further feasibility review and implementation considerations. |
|---|
| 453 | 429 | | |
|---|
| 454 | 430 | | (b) On or before September 30, 2028, the commission, through a public process, shall vote to approve the study and recommended a particular successor entity ownership type based on a rubric comparing each of the successor entity ownership types to the incumbent IOU model using the following criteria: |
|---|
| 455 | 431 | | |
|---|
| 456 | 432 | | (1) Long-term affordability for the state and for ratepayers. |
|---|
| 457 | 433 | | |
|---|
| 458 | 434 | | (2) Safety. |
|---|
| 459 | 435 | | |
|---|
| 460 | 436 | | (3) Reliability. |
|---|
| 461 | 437 | | |
|---|
| 462 | 438 | | (4) Climate resilience. |
|---|
| 463 | 439 | | |
|---|
| 464 | 440 | | (5) Local economic benefits. |
|---|
| 465 | 441 | | |
|---|
| 466 | 442 | | (6) Health impacts. |
|---|
| 467 | 443 | | |
|---|
| 468 | 444 | | (7) Energy justice. |
|---|
| 469 | 445 | | |
|---|
| 470 | 446 | | 25257. (a) If the study, as approved by the commission, finds that it is in the best long-term interests of the people and ecologies of California to transition away from the investor-owned utility model, the study team shall begin work to create a justice-centered implementation plan, as described in paragraph (3) of subdivision (a) of Section 25251, to outline a timeline and transition process to the successor entity, including recommendations for which branches of government or agencies should be responsible and coordinate with which portions of the public to ensure the transition fairly minimizes burdens and unintended consequences and fairly maximizes benefits in service of the public interest and necessity.(b) The implementation plan shall identify all appropriate implementation mechanisms, including statutory changes that may be required, recommendations for specific bylaws, operating procedures, governance structures, or otherwise to ensure the successor entity is structured, operationalized, and has the proper authority and mandate to ensure more just outcomes, based in part on findings pursuant to Sections 25254 and 25255.(c) The implementation plan shall additionally do all of the following:(1) Recommend mechanisms to fairly set the acquisition cost and valuation in as legally defensible and timely manner as possible, with the goal of avoiding lengthy periods of litigation over the acquisition cost.(2) Recommend an appropriate regulatory structure to clearly delineate the relationship between the Public Utilities Commission and the successor entity, including consideration of an independent oversight body for the successor entity.(3) Provide for community benefit agreements and other local economic benefit and cost savings to the maximum extent possible for new infrastructure investments and maintenance, prioritizing clean distributed energy resources.(d) The commission, through a public process, shall vote to approve the implementation plan on or before October 31, 2029. |
|---|
| 471 | 447 | | |
|---|
| 472 | 448 | | |
|---|
| 473 | 449 | | |
|---|
| 474 | 450 | | 25257. (a) If the study, as approved by the commission, finds that it is in the best long-term interests of the people and ecologies of California to transition away from the investor-owned utility model, the study team shall begin work to create a justice-centered implementation plan, as described in paragraph (3) of subdivision (a) of Section 25251, to outline a timeline and transition process to the successor entity, including recommendations for which branches of government or agencies should be responsible and coordinate with which portions of the public to ensure the transition fairly minimizes burdens and unintended consequences and fairly maximizes benefits in service of the public interest and necessity. |
|---|
| 475 | 451 | | |
|---|
| 476 | 452 | | (b) The implementation plan shall identify all appropriate implementation mechanisms, including statutory changes that may be required, recommendations for specific bylaws, operating procedures, governance structures, or otherwise to ensure the successor entity is structured, operationalized, and has the proper authority and mandate to ensure more just outcomes, based in part on findings pursuant to Sections 25254 and 25255. |
|---|
| 477 | 453 | | |
|---|
| 478 | 454 | | (c) The implementation plan shall additionally do all of the following: |
|---|
| 479 | 455 | | |
|---|
| 480 | 456 | | (1) Recommend mechanisms to fairly set the acquisition cost and valuation in as legally defensible and timely manner as possible, with the goal of avoiding lengthy periods of litigation over the acquisition cost. |
|---|
| 481 | 457 | | |
|---|
| 482 | 458 | | (2) Recommend an appropriate regulatory structure to clearly delineate the relationship between the Public Utilities Commission and the successor entity, including consideration of an independent oversight body for the successor entity. |
|---|
| 483 | 459 | | |
|---|
| 484 | 460 | | (3) Provide for community benefit agreements and other local economic benefit and cost savings to the maximum extent possible for new infrastructure investments and maintenance, prioritizing clean distributed energy resources. |
|---|
| 485 | 461 | | |
|---|
| 486 | 462 | | (d) The commission, through a public process, shall vote to approve the implementation plan on or before October 31, 2029. |
|---|
| 487 | 463 | | |
|---|
| 785 | | - | |
|---|
| 786 | | - | (1)A 10-year plan for undergrounding distribution infrastructure. |
|---|
| 787 | | - | |
|---|
| 788 | | - | |
|---|
| 789 | | - | |
|---|
| 790 | | - | (2)Identification of the undergrounding projects that will be constructed as part of the program, including a means of prioritizing undergrounding projects based on wildfire risk reduction, public safety, cost efficiency, and reliability benefits. Only undergrounding projects located in tier 2 or 3 high fire-threat districts or rebuild areas may be considered and constructed as part of the program. |
|---|
| 791 | | - | |
|---|
| 792 | | - | |
|---|
| 793 | | - | |
|---|
| 794 | | - | (3)Timelines for the completion of identified and prioritized undergrounding projects, and unit cost targets and mileage completion targets for each year covered by the plan. |
|---|
| 795 | | - | |
|---|
| 796 | | - | |
|---|
| 797 | | - | |
|---|
| 798 | | - | (4)A comparison of undergrounding versus aboveground hardening of electrical infrastructure and wildfire mitigation for achieving comparable risk reduction, or any other alternative mitigation strategy, such as covered conductor and rapid earth fault current limiter devices, for those prioritized undergrounding projects, evaluating the scope, cost, extent, and risk reduction of each activity, separately and collectively, over the duration of the plan. The comparison shall emphasize risk reduction and include an analysis of the cost of each activity for reducing wildfire risk, separately and collectively, over the duration of the plan. |
|---|
| 799 | | - | |
|---|
| 800 | | - | |
|---|
| 801 | | - | |
|---|
| 802 | | - | (5)A plan for utility and contractor workforce development. |
|---|
| 803 | | - | |
|---|
| 804 | | - | |
|---|
| 805 | | - | |
|---|
| 806 | | - | (6)An evaluation of project costs, projected economic benefits over the life of the assets, and any cost containment assumptions, including the economies of scale necessary to reduce wildfire risk and mitigation costs and establish a sustainable supply chain. |
|---|
| 807 | | - | |
|---|
| 808 | | - | |
|---|
| 809 | | - | |
|---|
| 810 | | - | (d)Upon a large electrical corporation submitting a plan to the office, the office shall do both of the following: |
|---|
| 811 | | - | |
|---|
| 812 | | - | |
|---|
| 813 | | - | |
|---|
| 814 | | - | (1)Publish the plan for public comment. |
|---|
| 815 | | - | |
|---|
| 816 | | - | |
|---|
| 817 | | - | |
|---|
| 818 | | - | (2)Within nine months, review and approve or deny the plan. The office may only approve the plan if the large electrical corporation has shown that the plan will substantially increase electrical reliability by reducing the use of public safety power shutoffs, enhanced powerline safety settings, deenergization events, and any other outage programs, and substantially reduce the risk of wildfire. Before approving the plan, the office may require the large electrical corporation to modify the plan. |
|---|
| 819 | | - | |
|---|
| 820 | | - | |
|---|
| 821 | | - | |
|---|
| 822 | | - | (e)(1)Upon the office approving a plan pursuant to paragraph (2) of subdivision (d), the large electrical corporation shall, within 60 days, submit to the commission a copy of the plan and an application requesting review and conditional approval of the plans costs and including all of the following: |
|---|
| 823 | | - | |
|---|
| 824 | | - | |
|---|
| 825 | | - | |
|---|
| 826 | | - | (A)Any substantial improvements in safety risk and reduction in costs compared to other hardening and risk mitigation measures over the duration of the plan. |
|---|
| 827 | | - | |
|---|
| 828 | | - | |
|---|
| 829 | | - | |
|---|
| 830 | | - | (B)The cost targets, at a minimum, that result in feasible and attainable cost reductions as compared to the large electrical corporations historical undergrounding costs. |
|---|
| 831 | | - | |
|---|
| 832 | | - | |
|---|
| 833 | | - | |
|---|
| 834 | | - | (C)How the cost targets are expected to decline over time due to cost efficiencies and economies of scale. |
|---|
| 835 | | - | |
|---|
| 836 | | - | |
|---|
| 837 | | - | |
|---|
| 838 | | - | (D)A strategy for achieving cost reductions over time. |
|---|
| 839 | | - | |
|---|
| 840 | | - | |
|---|
| 841 | | - | |
|---|
| 842 | | - | (2)The assigned commissioner may waive the requirements of subdivisions (b), (d), (f), and (i) of Section 1701.3 for an application submitted to the commission pursuant to paragraph (1). |
|---|
| 843 | | - | |
|---|
| 844 | | - | |
|---|
| 845 | | - | |
|---|
| 846 | | - | (3)In reviewing an application submitted to the commission pursuant to paragraph (1), the commission shall consider not revisiting cost or mileage completion targets approved, or pending approval, in the electrical corporations general rate case or a commission-approved balancing account ratemaking mechanism for system hardening. |
|---|
| 847 | | - | |
|---|
| 848 | | - | |
|---|
| 849 | | - | |
|---|
| 850 | | - | (4)Upon the commission receiving an application pursuant to paragraph (1), the commission shall facilitate a public workshop for presentation of the plan and take public comment for at least 30 days. |
|---|
| 851 | | - | |
|---|
| 852 | | - | |
|---|
| 853 | | - | |
|---|
| 854 | | - | (5)On or before nine months, the commission shall review and approve or deny the application. Before approving the application, the commission may require the large electrical corporation to modify or modify and resubmit the application. |
|---|
| 855 | | - | |
|---|
| 856 | | - | |
|---|
| 857 | | - | |
|---|
| 858 | | - | (6)The commission shall consider continuing an existing commission-approved balancing account ratemaking mechanism for system hardening for the duration of a plan, as determined by the commission, and shall authorize recovery of recorded costs that are determined to be just and reasonable. |
|---|
| 859 | | - | |
|---|
| 860 | | - | |
|---|
| 861 | | - | |
|---|
| 862 | | - | (f)If the plan is approved by the office and commission, the large electrical corporation shall do all of the following: |
|---|
| 863 | | - | |
|---|
| 864 | | - | |
|---|
| 865 | | - | |
|---|
| 866 | | - | (1)Every six months, file a progress report with the office and the commission. The large electrical corporation and the office shall publish these progress reports on their internet websites. |
|---|
| 867 | | - | |
|---|
| 868 | | - | |
|---|
| 869 | | - | |
|---|
| 870 | | - | (2)Include ongoing work plans and progress in annual wildfire mitigation plan filings. |
|---|
| 871 | | - | |
|---|
| 872 | | - | |
|---|
| 873 | | - | |
|---|
| 874 | | - | (3)Hire an independent monitor, selected by the office, to review and assess the large electrical corporations compliance with its plan and submit a report with the office each December 1 over the course of the plan. |
|---|
| 875 | | - | |
|---|
| 876 | | - | |
|---|
| 877 | | - | |
|---|
| 878 | | - | (g)(1)In reviewing and assessing the large electrical corporations compliance with its plan pursuant to paragraph (3) of subdivision (f), the independent monitor shall assess whether the large electrical corporations progress on undergrounding work has been consistent with the objectives identified in its plan. The independent monitors report shall specify any failure, delays, or shortcomings of the large electrical corporation and provide recommendations for improvements to accomplish the objectives set forth in the plan. |
|---|
| 879 | | - | |
|---|
| 880 | | - | |
|---|
| 881 | | - | |
|---|
| 882 | | - | (2)The large electrical corporation shall have 180 days to correct and eliminate any deficiency specified in the independent monitors report. |
|---|
| 883 | | - | |
|---|
| 884 | | - | |
|---|
| 885 | | - | |
|---|
| 886 | | - | (3)On or before December 1 of each year the plan is in effect, the independent monitor shall submit the report to the office. |
|---|
| 887 | | - | |
|---|
| 888 | | - | |
|---|
| 889 | | - | |
|---|
| 890 | | - | (h)The office shall publish reports received pursuant to paragraph (3) of subdivision (g) on its internet website. |
|---|
| 891 | | - | |
|---|
| 892 | | - | |
|---|
| 893 | | - | |
|---|
| 894 | | - | (i)(1)The office shall consider the independent monitors report and whether the large electrical corporation has cured any deficiencies, and may recommend penalties to the commission. |
|---|
| 895 | | - | |
|---|
| 896 | | - | |
|---|
| 897 | | - | |
|---|
| 898 | | - | (2)The commission may assess penalties on a large electrical corporation that fails to substantially comply with a commission decision approving its plan. |
|---|
| 899 | | - | |
|---|
| 900 | | - | |
|---|
| 901 | | - | |
|---|
| 902 | | - | (j)Each large electrical corporation participating in the program shall apply for available federal, state, and other nonratepayer moneys throughout the duration of its approved undergrounding plan, and any moneys received as a result of those applications shall be used to reduce the programs costs on the large electrical corporations ratepayers. |
|---|
| 903 | | - | |
|---|
| 904 | | - | |
|---|
| 905 | | - | |
|---|
| 906 | | - | SEC. 11.SEC. 10. Section 8388.6 is added to the Public Utilities Code, to read:8388.6. After an emergency or disaster in which an electrical corporations electrical infrastructure was destroyed, if the electrical corporation shall rebuild rebuilds the destroyed electrical infrastructure using infrastructure, it shall use the most cost-effective wildfire mitigation strategies that conform to state and industry safety standards for electrical equipment and that minimize the risk of catastrophic wildfire as quickly as possible, including consideration of undergrounding and covered conductor methods, to the extent applicable. The cost of undergrounding undergrounding, installing covered conductors, or other more cost-effective wildfire mitigation strategies for electrical infrastructure pursuant to this section shall not be recovered from ratepayers. |
|---|
| 907 | | - | |
|---|
| 908 | | - | SEC. 11.SEC. 10. Section 8388.6 is added to the Public Utilities Code, to read: |
|---|
| 909 | | - | |
|---|
| 910 | | - | ### SEC. 11.SEC. 10. |
|---|
| 911 | | - | |
|---|
| 912 | | - | 8388.6. After an emergency or disaster in which an electrical corporations electrical infrastructure was destroyed, if the electrical corporation shall rebuild rebuilds the destroyed electrical infrastructure using infrastructure, it shall use the most cost-effective wildfire mitigation strategies that conform to state and industry safety standards for electrical equipment and that minimize the risk of catastrophic wildfire as quickly as possible, including consideration of undergrounding and covered conductor methods, to the extent applicable. The cost of undergrounding undergrounding, installing covered conductors, or other more cost-effective wildfire mitigation strategies for electrical infrastructure pursuant to this section shall not be recovered from ratepayers. |
|---|
| 913 | | - | |
|---|
| 914 | | - | 8388.6. After an emergency or disaster in which an electrical corporations electrical infrastructure was destroyed, if the electrical corporation shall rebuild rebuilds the destroyed electrical infrastructure using infrastructure, it shall use the most cost-effective wildfire mitigation strategies that conform to state and industry safety standards for electrical equipment and that minimize the risk of catastrophic wildfire as quickly as possible, including consideration of undergrounding and covered conductor methods, to the extent applicable. The cost of undergrounding undergrounding, installing covered conductors, or other more cost-effective wildfire mitigation strategies for electrical infrastructure pursuant to this section shall not be recovered from ratepayers. |
|---|
| 915 | | - | |
|---|
| 916 | | - | 8388.6. After an emergency or disaster in which an electrical corporations electrical infrastructure was destroyed, if the electrical corporation shall rebuild rebuilds the destroyed electrical infrastructure using infrastructure, it shall use the most cost-effective wildfire mitigation strategies that conform to state and industry safety standards for electrical equipment and that minimize the risk of catastrophic wildfire as quickly as possible, including consideration of undergrounding and covered conductor methods, to the extent applicable. The cost of undergrounding undergrounding, installing covered conductors, or other more cost-effective wildfire mitigation strategies for electrical infrastructure pursuant to this section shall not be recovered from ratepayers. |
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| 917 | | - | |
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| 918 | | - | |
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| 919 | | - | |
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| 920 | | - | 8388.6. After an emergency or disaster in which an electrical corporations electrical infrastructure was destroyed, if the electrical corporation shall rebuild rebuilds the destroyed electrical infrastructure using infrastructure, it shall use the most cost-effective wildfire mitigation strategies that conform to state and industry safety standards for electrical equipment and that minimize the risk of catastrophic wildfire as quickly as possible, including consideration of undergrounding and covered conductor methods, to the extent applicable. The cost of undergrounding undergrounding, installing covered conductors, or other more cost-effective wildfire mitigation strategies for electrical infrastructure pursuant to this section shall not be recovered from ratepayers. |
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| 921 | | - | |
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| 922 | | - | SEC. 12.SEC. 11. Chapter 10 (commencing with Section 8450) is added to Division 4.1 of the Public Utilities Code, to read: CHAPTER 10. Utility Service Disconnections8450. The Legislature finds and declares all of the following:(a) Access to electricity and heating services is a human right that no one should be deprived of due to an inability to pay.(b) Electricity is essential to the health, safety, and welfare of the people of this state and to the states economy.(c) It is the responsibility of state government to ensure that a reliable supply of electricity is maintained at a level consistent with the need for the electricity to protect public health and safety, promote the general welfare, and protect environmental quality.(d) Gas and electrical service shutoffs threaten the health of infants, children, the elderly, low-income families, communities of color, people for whom English is a second language, physically disabled persons, and persons with life-threatening medical conditions.(e) Section 779.3 of the Public Utilities Code prohibits a gas or electrical corporation from disconnecting service for nonpayment by a residential customer receiving a medical baseline allowance when the customer or a member of the customers household is under hospice care at home, depends upon life-support equipment, or has a life-threatening condition or illness.(f) Public Utilities Commission Decision 20-06-003 (June 16, 2020), Phase I Decision Adopting Rules and Policy Changes to Reduce Residential Customer Disconnections for the Larger California-Jurisdictional Energy Utilities, prohibits large investor-owned utilities from doing both of the following:(1) Disconnecting residential customers when temperatures above 100 degrees or below 32 degrees are forecasted based on a 72-hour look-ahead period.(2) Disconnecting residential customers who currently have Low-Income Home Energy Assistance Program pledges pending.(g) In response to the COVID-19 pandemic, Public Utilities Commission Resolution M-4842 (April 17, 2020), Emergency Authorization and Order Directing Utilities to Implement Emergency Customer Protections to Support California Customers During the COVID-19 Pandemic, required electrical and gas utilities to suspend disconnection for nonpayment, commonly known as the COVID-19 disconnection moratorium.(h) The COVID-19 disconnection moratorium ended in September 2021, but California investor-owned utilities began disconnecting their customers for nonpayment in August 2022.(i) From August 2022 to August 2024, Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas and Electric Company collectively disconnected their customers for nonpayment 412,787 times.(j) From August 2022 to August 2024, Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas and Electric Company also compensated their shareholders with $7,620,000,000 in dividends. During that period, the estimated cost to prevent all residential shutoffs for nonpayment was seventy-seven hundredths of 1 percent of that compensation to shareholders.8451. For purposes of this chapter, the following definitions apply:(a) Adult means a person 18 years of age or older.(b) Economic unit means all adults contributing to and sharing in the income and expenses of a household.(c) Electrical corporation has the same meaning as defined in Section 218.(d) Gas corporation has the same meaning as defined in Section 222.(e) Household means a residential address shared by a group of adults, including the utility customer, and children who are living together at that address as one economic unit. A household may contain related and unrelated persons. If an adult has no, or minimal, income and lives with an adult who provides financial support to that adult, both adults are part of the same household. A child under 18 years of age and living with a parent or guardian is part of the same household as the parent or guardian.(f) Local publicly owned electric utility has the same meaning as defined in Section 224.3.(g) Residential service means the provision of electrical or natural gas service to a residential connection at a single-family residence, a multifamily residence, a mobilehome, including, but not limited to, a mobilehome in a mobilehome park, or farmworker housing.(h) Utility means an electrical corporation, local publicly owned electric utility, gas corporation, or local publicly owned gas utility.8452. (a) A utility shall not disconnect a customers residential service for nonpayment if the customers household is the residence of any of the following persons:(1) A child five years of age or younger, regardless of the customers relationship with the child.(2) A person 65 years of age or older.(3) A person with a disability, consistent with subdivision (d).(4) A person with a medical condition, consistent with subdivision (d).(5) A person who is pregnant or 0 to 12 weeks postpartum, consistent with subdivision (e).(b) (1) A utility shall not disconnect a customers residential service for nonpayment if the customer has a household income at or below 200 percent of the federal poverty line.(2) For purposes of paragraph (1), a utility shall deem a residential customer to have a household income below 200 percent of the federal poverty line if any member of the household is a current recipient of a benefit or discount pursuant to one or more of the following programs, or if the customer declares that the households annual income is less than 200 percent of the federal poverty level:(A) The California Alternative Rates for Energy (CARE) program, as described in Section 739.1.(B) The CalWORKS program, as described in Chapter 2 (commencing with Section 11200) of Part 3 of Division 9 of the Welfare and Institutions Code.(C) CalFresh, as described in Section 18900.2 of the Welfare and Institutions Code.(D) General assistance, as described in Part 5 (commencing with Section 17000) of Division 9 of the Welfare and Institutions Code.(E) Medi-Cal, as described in Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code.(F) Federal Supplemental Security Income, as described in Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.).(G) The State Supplementary Payment Program, as described in Chapter 3 (commencing with Section 12000) of Part 3 of Division 9 of the Welfare and Institutions Code.(H) The California Special Supplemental Nutrition Program for Women, Infants, and Children, as described in Section 123280 of the Health and Safety Code.(3) For purposes of paragraph (2), a utility shall provide a customer with the ability to confirm eligibility for enrollment through a request for self-certification of eligibility under penalty of perjury.(c) On and after January 1, 2026, each electrical corporation and gas corporation shall automatically reconnect all households that are eligible for protection under subdivision (a) or (b) that had their residential service disconnected due to nonpayment.(d) (1) (A) In order for the prohibition described in paragraph (3) or (4) of subdivision (a) to apply to a customers residential service, the customer, or a member of the customers household, shall notify the utility that the prohibition applies. The customer, or a member of the customers household, shall verify the prohibitions applicability by submitting to the utility, within three weeks after their latest disconnection notice, a certification from a primary care provider that the discontinuation of residential service will be life threatening to, aggravate an existing medical condition of, or pose a serious threat to the health and safety of, a resident of the household where the residential service is provided. Upon receipt of the certification and while verifying the certification, the utility shall not disconnect the customers service or the service of a member of the customers household.(B) Each electrical corporation and gas corporation shall create a certification form that states the eligibility requirements that apply to this chapter and that does not request the identification of the specific category that applies.(2) Notwithstanding paragraph (1), the customer, or a member of the customers household, may automatically establish the applicability of the prohibitions described in paragraphs (3) or (4) of subdivision (a) without submitting a certification from a primary care provider if the customer, or member of the customers household, participates in the Medical Baseline Program.(e) If a customer, or a member of the customers household, is protected from disconnections pursuant to paragraph (5) of subdivision (a), the customer or member shall submit to the utility the certification of a primary care provider that the customer or member is pregnant or postpartum.(f) Local publicly owned electric or gas utilities shall revise their policies that mitigate utility shutoffs for nonpayment to be at least as protective of the vulnerable customer groups listed in subdivision (a) as required by this section. If the local publicly owned electric or gas utility does not have an policy that mitigates shutoffs for nonpayment for a vulnerable customer group listed in subdivision (a), the local publicly owned electric or gas utility shall establish a policy for that vulnerable customer group as required by this section.8453. (a) Each utility shall notify its residential customers of the prohibitions described in subdivisions (a) and (b) of Section 8452 by doing all of the following:(1) Posting the prohibitions in a publicly available location on the utilitys internet website, if the utility has an internet website.(2) Providing the prohibitions, in writing, to the utilitys residential customers at least twice per year, including before the onset of the summer and winter seasons.(3) Including the prohibitions on each residential customers utility bill.(4) Including the prohibitions on each new residential customers first utility bill.(b) All written notices required pursuant to subdivision (a) shall be provided in English, the languages listed in Section 1632 of the Civil Code, and any other language spoken by 10 percent or more of the customers in the utilitys service area.(c) Each utility that has an internet website shall create an online reporting system available through its internet website that enables its residential customers to report when their residential service has been disconnected in violation of subdivision (a) or (b) of Section 8452. The utility shall promptly respond to reports filed through its online reporting system and shall disclose a violation to the commission.8454. (a) A utility shall offer a residential customer who meets the requirements of subdivision (a) or (b) of Section 8452 a payment plan for the customers electricity or gas service that is provided by the utility, including a percentage of income payment plan, as authorized by the commission in commission Decision 21-10-012 (October 11, 2021), Decision Authorizing Percentage of Income Payment Plan Pilot Programs, in which customers are subject to a monthly bill cap set at a percentage of household income not to exceed 4 percent of household income or one-twelfth of the combined amount of the customers electricity and gas bills immediately before the customers enrollment in the payment plan required to be offered by the utility pursuant to this section, whichever is lower.(b) A residential customer subject to the payment plan shall not be financially responsible for any costs of providing electrical service or gas service exceeding the customers payment plan amount.(c) A utility subject to the disconnection prohibition described in Section 8452 shall be subject to both of the following provisions:(1) The utility shall not disconnect a residential customer described in subdivision (a) or (b) of Section 8452 due to lack of participation in a payment plan described in subdivision (a).(2) The utility may report to a credit reporting agency that a customers outstanding balances are delinquent only if the customer declines to participate in a payment plan or fails to pay in full the amounts due under a payment plan on three separate occasions during the terms of a payment plan described in this section or another payment plan offered by the utility.8455. (a) The commission shall establish a citation program to impose a penalty on an electrical corporation or gas corporation that violates Section 8452.(b) (1) The commission may bring an action in state court for equitable relief regarding an electrical corporations or gas corporations use of a method, act, or practice inconsistent with this chapter.(2) A customer, or a member of the customers household, may bring an action in state court for equitable relief regarding a utilitys or community choice aggregators use of a method, act, or practice inconsistent with this chapter.8456. (a) (1) Each utility providing electrical service or gas service, or both, to residential customers shall collect and submit to the commission monthly data on electrical and gas service terminations, reconnections, bill assistance and payment agreements, arrears, and created and broken payment plans.(2) When collecting and submitting to the commission the monthly data described in paragraph (1), those utilities shall do both of the following:(A) Use metrics that replicate the data provided in the monthly disconnect data reports authorized by the commission pursuant to commission Decision 18-12-013 (December 13, 2018), Decision Adopting Interim Rules to Reduce Residential Customer Disconnections for California-Jurisdictional Energy Utilities.(B) Aggregate electrical and gas service termination and reconnection data by ZIP Code, similar to the monthly disconnect data reports authorized by the commission pursuant to commission Decision 18-12-013 (December 13, 2018), Decision Adopting Interim Rules to Reduce Residential Customer Disconnections for California-Jurisdictional Energy Utilities.(b) The commission shall either include the data as monthly filings in commission Rulemaking 18-07-005 (July 12, 2018), Order Instituting Rulemaking to Consider New Approaches to Disconnections and Reconnections to Improve Energy Access and Contain Costs, or create a new page on the commissions internet website that clearly collects and presents all of the data submitted to the commission pursuant to this section.8457. (a) This chapter does not apply to utility actions related to wildfire prevention or other safety measures, including public safety power shutoffs or deenergization events.(b) This chapter does not apply to unintentional service disruptions or outages. |
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| 923 | | - | |
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| 924 | | - | SEC. 12.SEC. 11. Chapter 10 (commencing with Section 8450) is added to Division 4.1 of the Public Utilities Code, to read: |
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| 925 | | - | |
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| 926 | | - | ### SEC. 12.SEC. 11. |
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| 927 | | - | |
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| 928 | | - | CHAPTER 10. Utility Service Disconnections8450. The Legislature finds and declares all of the following:(a) Access to electricity and heating services is a human right that no one should be deprived of due to an inability to pay.(b) Electricity is essential to the health, safety, and welfare of the people of this state and to the states economy.(c) It is the responsibility of state government to ensure that a reliable supply of electricity is maintained at a level consistent with the need for the electricity to protect public health and safety, promote the general welfare, and protect environmental quality.(d) Gas and electrical service shutoffs threaten the health of infants, children, the elderly, low-income families, communities of color, people for whom English is a second language, physically disabled persons, and persons with life-threatening medical conditions.(e) Section 779.3 of the Public Utilities Code prohibits a gas or electrical corporation from disconnecting service for nonpayment by a residential customer receiving a medical baseline allowance when the customer or a member of the customers household is under hospice care at home, depends upon life-support equipment, or has a life-threatening condition or illness.(f) Public Utilities Commission Decision 20-06-003 (June 16, 2020), Phase I Decision Adopting Rules and Policy Changes to Reduce Residential Customer Disconnections for the Larger California-Jurisdictional Energy Utilities, prohibits large investor-owned utilities from doing both of the following:(1) Disconnecting residential customers when temperatures above 100 degrees or below 32 degrees are forecasted based on a 72-hour look-ahead period.(2) Disconnecting residential customers who currently have Low-Income Home Energy Assistance Program pledges pending.(g) In response to the COVID-19 pandemic, Public Utilities Commission Resolution M-4842 (April 17, 2020), Emergency Authorization and Order Directing Utilities to Implement Emergency Customer Protections to Support California Customers During the COVID-19 Pandemic, required electrical and gas utilities to suspend disconnection for nonpayment, commonly known as the COVID-19 disconnection moratorium.(h) The COVID-19 disconnection moratorium ended in September 2021, but California investor-owned utilities began disconnecting their customers for nonpayment in August 2022.(i) From August 2022 to August 2024, Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas and Electric Company collectively disconnected their customers for nonpayment 412,787 times.(j) From August 2022 to August 2024, Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas and Electric Company also compensated their shareholders with $7,620,000,000 in dividends. During that period, the estimated cost to prevent all residential shutoffs for nonpayment was seventy-seven hundredths of 1 percent of that compensation to shareholders.8451. For purposes of this chapter, the following definitions apply:(a) Adult means a person 18 years of age or older.(b) Economic unit means all adults contributing to and sharing in the income and expenses of a household.(c) Electrical corporation has the same meaning as defined in Section 218.(d) Gas corporation has the same meaning as defined in Section 222.(e) Household means a residential address shared by a group of adults, including the utility customer, and children who are living together at that address as one economic unit. A household may contain related and unrelated persons. If an adult has no, or minimal, income and lives with an adult who provides financial support to that adult, both adults are part of the same household. A child under 18 years of age and living with a parent or guardian is part of the same household as the parent or guardian.(f) Local publicly owned electric utility has the same meaning as defined in Section 224.3.(g) Residential service means the provision of electrical or natural gas service to a residential connection at a single-family residence, a multifamily residence, a mobilehome, including, but not limited to, a mobilehome in a mobilehome park, or farmworker housing.(h) Utility means an electrical corporation, local publicly owned electric utility, gas corporation, or local publicly owned gas utility.8452. (a) A utility shall not disconnect a customers residential service for nonpayment if the customers household is the residence of any of the following persons:(1) A child five years of age or younger, regardless of the customers relationship with the child.(2) A person 65 years of age or older.(3) A person with a disability, consistent with subdivision (d).(4) A person with a medical condition, consistent with subdivision (d).(5) A person who is pregnant or 0 to 12 weeks postpartum, consistent with subdivision (e).(b) (1) A utility shall not disconnect a customers residential service for nonpayment if the customer has a household income at or below 200 percent of the federal poverty line.(2) For purposes of paragraph (1), a utility shall deem a residential customer to have a household income below 200 percent of the federal poverty line if any member of the household is a current recipient of a benefit or discount pursuant to one or more of the following programs, or if the customer declares that the households annual income is less than 200 percent of the federal poverty level:(A) The California Alternative Rates for Energy (CARE) program, as described in Section 739.1.(B) The CalWORKS program, as described in Chapter 2 (commencing with Section 11200) of Part 3 of Division 9 of the Welfare and Institutions Code.(C) CalFresh, as described in Section 18900.2 of the Welfare and Institutions Code.(D) General assistance, as described in Part 5 (commencing with Section 17000) of Division 9 of the Welfare and Institutions Code.(E) Medi-Cal, as described in Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code.(F) Federal Supplemental Security Income, as described in Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.).(G) The State Supplementary Payment Program, as described in Chapter 3 (commencing with Section 12000) of Part 3 of Division 9 of the Welfare and Institutions Code.(H) The California Special Supplemental Nutrition Program for Women, Infants, and Children, as described in Section 123280 of the Health and Safety Code.(3) For purposes of paragraph (2), a utility shall provide a customer with the ability to confirm eligibility for enrollment through a request for self-certification of eligibility under penalty of perjury.(c) On and after January 1, 2026, each electrical corporation and gas corporation shall automatically reconnect all households that are eligible for protection under subdivision (a) or (b) that had their residential service disconnected due to nonpayment.(d) (1) (A) In order for the prohibition described in paragraph (3) or (4) of subdivision (a) to apply to a customers residential service, the customer, or a member of the customers household, shall notify the utility that the prohibition applies. The customer, or a member of the customers household, shall verify the prohibitions applicability by submitting to the utility, within three weeks after their latest disconnection notice, a certification from a primary care provider that the discontinuation of residential service will be life threatening to, aggravate an existing medical condition of, or pose a serious threat to the health and safety of, a resident of the household where the residential service is provided. Upon receipt of the certification and while verifying the certification, the utility shall not disconnect the customers service or the service of a member of the customers household.(B) Each electrical corporation and gas corporation shall create a certification form that states the eligibility requirements that apply to this chapter and that does not request the identification of the specific category that applies.(2) Notwithstanding paragraph (1), the customer, or a member of the customers household, may automatically establish the applicability of the prohibitions described in paragraphs (3) or (4) of subdivision (a) without submitting a certification from a primary care provider if the customer, or member of the customers household, participates in the Medical Baseline Program.(e) If a customer, or a member of the customers household, is protected from disconnections pursuant to paragraph (5) of subdivision (a), the customer or member shall submit to the utility the certification of a primary care provider that the customer or member is pregnant or postpartum.(f) Local publicly owned electric or gas utilities shall revise their policies that mitigate utility shutoffs for nonpayment to be at least as protective of the vulnerable customer groups listed in subdivision (a) as required by this section. If the local publicly owned electric or gas utility does not have an policy that mitigates shutoffs for nonpayment for a vulnerable customer group listed in subdivision (a), the local publicly owned electric or gas utility shall establish a policy for that vulnerable customer group as required by this section.8453. (a) Each utility shall notify its residential customers of the prohibitions described in subdivisions (a) and (b) of Section 8452 by doing all of the following:(1) Posting the prohibitions in a publicly available location on the utilitys internet website, if the utility has an internet website.(2) Providing the prohibitions, in writing, to the utilitys residential customers at least twice per year, including before the onset of the summer and winter seasons.(3) Including the prohibitions on each residential customers utility bill.(4) Including the prohibitions on each new residential customers first utility bill.(b) All written notices required pursuant to subdivision (a) shall be provided in English, the languages listed in Section 1632 of the Civil Code, and any other language spoken by 10 percent or more of the customers in the utilitys service area.(c) Each utility that has an internet website shall create an online reporting system available through its internet website that enables its residential customers to report when their residential service has been disconnected in violation of subdivision (a) or (b) of Section 8452. The utility shall promptly respond to reports filed through its online reporting system and shall disclose a violation to the commission.8454. (a) A utility shall offer a residential customer who meets the requirements of subdivision (a) or (b) of Section 8452 a payment plan for the customers electricity or gas service that is provided by the utility, including a percentage of income payment plan, as authorized by the commission in commission Decision 21-10-012 (October 11, 2021), Decision Authorizing Percentage of Income Payment Plan Pilot Programs, in which customers are subject to a monthly bill cap set at a percentage of household income not to exceed 4 percent of household income or one-twelfth of the combined amount of the customers electricity and gas bills immediately before the customers enrollment in the payment plan required to be offered by the utility pursuant to this section, whichever is lower.(b) A residential customer subject to the payment plan shall not be financially responsible for any costs of providing electrical service or gas service exceeding the customers payment plan amount.(c) A utility subject to the disconnection prohibition described in Section 8452 shall be subject to both of the following provisions:(1) The utility shall not disconnect a residential customer described in subdivision (a) or (b) of Section 8452 due to lack of participation in a payment plan described in subdivision (a).(2) The utility may report to a credit reporting agency that a customers outstanding balances are delinquent only if the customer declines to participate in a payment plan or fails to pay in full the amounts due under a payment plan on three separate occasions during the terms of a payment plan described in this section or another payment plan offered by the utility.8455. (a) The commission shall establish a citation program to impose a penalty on an electrical corporation or gas corporation that violates Section 8452.(b) (1) The commission may bring an action in state court for equitable relief regarding an electrical corporations or gas corporations use of a method, act, or practice inconsistent with this chapter.(2) A customer, or a member of the customers household, may bring an action in state court for equitable relief regarding a utilitys or community choice aggregators use of a method, act, or practice inconsistent with this chapter.8456. (a) (1) Each utility providing electrical service or gas service, or both, to residential customers shall collect and submit to the commission monthly data on electrical and gas service terminations, reconnections, bill assistance and payment agreements, arrears, and created and broken payment plans.(2) When collecting and submitting to the commission the monthly data described in paragraph (1), those utilities shall do both of the following:(A) Use metrics that replicate the data provided in the monthly disconnect data reports authorized by the commission pursuant to commission Decision 18-12-013 (December 13, 2018), Decision Adopting Interim Rules to Reduce Residential Customer Disconnections for California-Jurisdictional Energy Utilities.(B) Aggregate electrical and gas service termination and reconnection data by ZIP Code, similar to the monthly disconnect data reports authorized by the commission pursuant to commission Decision 18-12-013 (December 13, 2018), Decision Adopting Interim Rules to Reduce Residential Customer Disconnections for California-Jurisdictional Energy Utilities.(b) The commission shall either include the data as monthly filings in commission Rulemaking 18-07-005 (July 12, 2018), Order Instituting Rulemaking to Consider New Approaches to Disconnections and Reconnections to Improve Energy Access and Contain Costs, or create a new page on the commissions internet website that clearly collects and presents all of the data submitted to the commission pursuant to this section.8457. (a) This chapter does not apply to utility actions related to wildfire prevention or other safety measures, including public safety power shutoffs or deenergization events.(b) This chapter does not apply to unintentional service disruptions or outages. |
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| 929 | | - | |
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| 930 | | - | CHAPTER 10. Utility Service Disconnections8450. The Legislature finds and declares all of the following:(a) Access to electricity and heating services is a human right that no one should be deprived of due to an inability to pay.(b) Electricity is essential to the health, safety, and welfare of the people of this state and to the states economy.(c) It is the responsibility of state government to ensure that a reliable supply of electricity is maintained at a level consistent with the need for the electricity to protect public health and safety, promote the general welfare, and protect environmental quality.(d) Gas and electrical service shutoffs threaten the health of infants, children, the elderly, low-income families, communities of color, people for whom English is a second language, physically disabled persons, and persons with life-threatening medical conditions.(e) Section 779.3 of the Public Utilities Code prohibits a gas or electrical corporation from disconnecting service for nonpayment by a residential customer receiving a medical baseline allowance when the customer or a member of the customers household is under hospice care at home, depends upon life-support equipment, or has a life-threatening condition or illness.(f) Public Utilities Commission Decision 20-06-003 (June 16, 2020), Phase I Decision Adopting Rules and Policy Changes to Reduce Residential Customer Disconnections for the Larger California-Jurisdictional Energy Utilities, prohibits large investor-owned utilities from doing both of the following:(1) Disconnecting residential customers when temperatures above 100 degrees or below 32 degrees are forecasted based on a 72-hour look-ahead period.(2) Disconnecting residential customers who currently have Low-Income Home Energy Assistance Program pledges pending.(g) In response to the COVID-19 pandemic, Public Utilities Commission Resolution M-4842 (April 17, 2020), Emergency Authorization and Order Directing Utilities to Implement Emergency Customer Protections to Support California Customers During the COVID-19 Pandemic, required electrical and gas utilities to suspend disconnection for nonpayment, commonly known as the COVID-19 disconnection moratorium.(h) The COVID-19 disconnection moratorium ended in September 2021, but California investor-owned utilities began disconnecting their customers for nonpayment in August 2022.(i) From August 2022 to August 2024, Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas and Electric Company collectively disconnected their customers for nonpayment 412,787 times.(j) From August 2022 to August 2024, Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas and Electric Company also compensated their shareholders with $7,620,000,000 in dividends. During that period, the estimated cost to prevent all residential shutoffs for nonpayment was seventy-seven hundredths of 1 percent of that compensation to shareholders.8451. For purposes of this chapter, the following definitions apply:(a) Adult means a person 18 years of age or older.(b) Economic unit means all adults contributing to and sharing in the income and expenses of a household.(c) Electrical corporation has the same meaning as defined in Section 218.(d) Gas corporation has the same meaning as defined in Section 222.(e) Household means a residential address shared by a group of adults, including the utility customer, and children who are living together at that address as one economic unit. A household may contain related and unrelated persons. If an adult has no, or minimal, income and lives with an adult who provides financial support to that adult, both adults are part of the same household. A child under 18 years of age and living with a parent or guardian is part of the same household as the parent or guardian.(f) Local publicly owned electric utility has the same meaning as defined in Section 224.3.(g) Residential service means the provision of electrical or natural gas service to a residential connection at a single-family residence, a multifamily residence, a mobilehome, including, but not limited to, a mobilehome in a mobilehome park, or farmworker housing.(h) Utility means an electrical corporation, local publicly owned electric utility, gas corporation, or local publicly owned gas utility.8452. (a) A utility shall not disconnect a customers residential service for nonpayment if the customers household is the residence of any of the following persons:(1) A child five years of age or younger, regardless of the customers relationship with the child.(2) A person 65 years of age or older.(3) A person with a disability, consistent with subdivision (d).(4) A person with a medical condition, consistent with subdivision (d).(5) A person who is pregnant or 0 to 12 weeks postpartum, consistent with subdivision (e).(b) (1) A utility shall not disconnect a customers residential service for nonpayment if the customer has a household income at or below 200 percent of the federal poverty line.(2) For purposes of paragraph (1), a utility shall deem a residential customer to have a household income below 200 percent of the federal poverty line if any member of the household is a current recipient of a benefit or discount pursuant to one or more of the following programs, or if the customer declares that the households annual income is less than 200 percent of the federal poverty level:(A) The California Alternative Rates for Energy (CARE) program, as described in Section 739.1.(B) The CalWORKS program, as described in Chapter 2 (commencing with Section 11200) of Part 3 of Division 9 of the Welfare and Institutions Code.(C) CalFresh, as described in Section 18900.2 of the Welfare and Institutions Code.(D) General assistance, as described in Part 5 (commencing with Section 17000) of Division 9 of the Welfare and Institutions Code.(E) Medi-Cal, as described in Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code.(F) Federal Supplemental Security Income, as described in Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.).(G) The State Supplementary Payment Program, as described in Chapter 3 (commencing with Section 12000) of Part 3 of Division 9 of the Welfare and Institutions Code.(H) The California Special Supplemental Nutrition Program for Women, Infants, and Children, as described in Section 123280 of the Health and Safety Code.(3) For purposes of paragraph (2), a utility shall provide a customer with the ability to confirm eligibility for enrollment through a request for self-certification of eligibility under penalty of perjury.(c) On and after January 1, 2026, each electrical corporation and gas corporation shall automatically reconnect all households that are eligible for protection under subdivision (a) or (b) that had their residential service disconnected due to nonpayment.(d) (1) (A) In order for the prohibition described in paragraph (3) or (4) of subdivision (a) to apply to a customers residential service, the customer, or a member of the customers household, shall notify the utility that the prohibition applies. The customer, or a member of the customers household, shall verify the prohibitions applicability by submitting to the utility, within three weeks after their latest disconnection notice, a certification from a primary care provider that the discontinuation of residential service will be life threatening to, aggravate an existing medical condition of, or pose a serious threat to the health and safety of, a resident of the household where the residential service is provided. Upon receipt of the certification and while verifying the certification, the utility shall not disconnect the customers service or the service of a member of the customers household.(B) Each electrical corporation and gas corporation shall create a certification form that states the eligibility requirements that apply to this chapter and that does not request the identification of the specific category that applies.(2) Notwithstanding paragraph (1), the customer, or a member of the customers household, may automatically establish the applicability of the prohibitions described in paragraphs (3) or (4) of subdivision (a) without submitting a certification from a primary care provider if the customer, or member of the customers household, participates in the Medical Baseline Program.(e) If a customer, or a member of the customers household, is protected from disconnections pursuant to paragraph (5) of subdivision (a), the customer or member shall submit to the utility the certification of a primary care provider that the customer or member is pregnant or postpartum.(f) Local publicly owned electric or gas utilities shall revise their policies that mitigate utility shutoffs for nonpayment to be at least as protective of the vulnerable customer groups listed in subdivision (a) as required by this section. If the local publicly owned electric or gas utility does not have an policy that mitigates shutoffs for nonpayment for a vulnerable customer group listed in subdivision (a), the local publicly owned electric or gas utility shall establish a policy for that vulnerable customer group as required by this section.8453. (a) Each utility shall notify its residential customers of the prohibitions described in subdivisions (a) and (b) of Section 8452 by doing all of the following:(1) Posting the prohibitions in a publicly available location on the utilitys internet website, if the utility has an internet website.(2) Providing the prohibitions, in writing, to the utilitys residential customers at least twice per year, including before the onset of the summer and winter seasons.(3) Including the prohibitions on each residential customers utility bill.(4) Including the prohibitions on each new residential customers first utility bill.(b) All written notices required pursuant to subdivision (a) shall be provided in English, the languages listed in Section 1632 of the Civil Code, and any other language spoken by 10 percent or more of the customers in the utilitys service area.(c) Each utility that has an internet website shall create an online reporting system available through its internet website that enables its residential customers to report when their residential service has been disconnected in violation of subdivision (a) or (b) of Section 8452. The utility shall promptly respond to reports filed through its online reporting system and shall disclose a violation to the commission.8454. (a) A utility shall offer a residential customer who meets the requirements of subdivision (a) or (b) of Section 8452 a payment plan for the customers electricity or gas service that is provided by the utility, including a percentage of income payment plan, as authorized by the commission in commission Decision 21-10-012 (October 11, 2021), Decision Authorizing Percentage of Income Payment Plan Pilot Programs, in which customers are subject to a monthly bill cap set at a percentage of household income not to exceed 4 percent of household income or one-twelfth of the combined amount of the customers electricity and gas bills immediately before the customers enrollment in the payment plan required to be offered by the utility pursuant to this section, whichever is lower.(b) A residential customer subject to the payment plan shall not be financially responsible for any costs of providing electrical service or gas service exceeding the customers payment plan amount.(c) A utility subject to the disconnection prohibition described in Section 8452 shall be subject to both of the following provisions:(1) The utility shall not disconnect a residential customer described in subdivision (a) or (b) of Section 8452 due to lack of participation in a payment plan described in subdivision (a).(2) The utility may report to a credit reporting agency that a customers outstanding balances are delinquent only if the customer declines to participate in a payment plan or fails to pay in full the amounts due under a payment plan on three separate occasions during the terms of a payment plan described in this section or another payment plan offered by the utility.8455. (a) The commission shall establish a citation program to impose a penalty on an electrical corporation or gas corporation that violates Section 8452.(b) (1) The commission may bring an action in state court for equitable relief regarding an electrical corporations or gas corporations use of a method, act, or practice inconsistent with this chapter.(2) A customer, or a member of the customers household, may bring an action in state court for equitable relief regarding a utilitys or community choice aggregators use of a method, act, or practice inconsistent with this chapter.8456. (a) (1) Each utility providing electrical service or gas service, or both, to residential customers shall collect and submit to the commission monthly data on electrical and gas service terminations, reconnections, bill assistance and payment agreements, arrears, and created and broken payment plans.(2) When collecting and submitting to the commission the monthly data described in paragraph (1), those utilities shall do both of the following:(A) Use metrics that replicate the data provided in the monthly disconnect data reports authorized by the commission pursuant to commission Decision 18-12-013 (December 13, 2018), Decision Adopting Interim Rules to Reduce Residential Customer Disconnections for California-Jurisdictional Energy Utilities.(B) Aggregate electrical and gas service termination and reconnection data by ZIP Code, similar to the monthly disconnect data reports authorized by the commission pursuant to commission Decision 18-12-013 (December 13, 2018), Decision Adopting Interim Rules to Reduce Residential Customer Disconnections for California-Jurisdictional Energy Utilities.(b) The commission shall either include the data as monthly filings in commission Rulemaking 18-07-005 (July 12, 2018), Order Instituting Rulemaking to Consider New Approaches to Disconnections and Reconnections to Improve Energy Access and Contain Costs, or create a new page on the commissions internet website that clearly collects and presents all of the data submitted to the commission pursuant to this section.8457. (a) This chapter does not apply to utility actions related to wildfire prevention or other safety measures, including public safety power shutoffs or deenergization events.(b) This chapter does not apply to unintentional service disruptions or outages. |
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| 780 | + | CHAPTER 10. Utility Service Disconnections8450. The Legislature finds and declares all of the following:(a) Access to electricity and heating services is a human right that no one should be deprived of due to an inability to pay.(b) Electricity is essential to the health, safety, and welfare of the people of this state and to the states economy.(c) It is the responsibility of state government to ensure that a reliable supply of electricity is maintained at a level consistent with the need for the electricity to protect public health and safety, promote the general welfare, and protect environmental quality.(d) Gas and electrical service shutoffs threaten the health of infants, children, the elderly, low-income families, communities of color, people for whom English is a second language, physically disabled persons, and persons with life-threatening medical conditions.(e) Section 779.3 of the Public Utilities Code prohibits a gas or electrical corporation from disconnecting service for nonpayment by a residential customer receiving a medical baseline allowance when the customer or a member of the customers household is under hospice care at home, depends upon life-support equipment, or has a life-threatening condition or illness.(f) Public Utilities Commission Decision 20-06-003 (June 16, 2020), Phase I Decision Adopting Rules and Policy Changes to Reduce Residential Customer Disconnections for the Larger California-Jurisdictional Energy Utilities, prohibits large investor-owned utilities from doing both of the following:(1) Disconnecting residential customers when temperatures above 100 degrees or below 32 degrees are forecasted based on a 72-hour look-ahead period.(2) Disconnecting residential customers who currently have Low-Income Home Energy Assistance Program pledges pending.(g) In response to the COVID-19 pandemic, Public Utilities Commission Resolution M-4842 (April 17, 2020), Emergency Authorization and Order Directing Utilities to Implement Emergency Customer Protections to Support California Customers During the COVID-19 Pandemic, required electrical and gas utilities to suspend disconnection for nonpayment, commonly known as the COVID-19 disconnection moratorium.(h) The COVID-19 disconnection moratorium ended in September 2021, but California investor-owned utilities began disconnecting their customers for nonpayment in August 2022.(i) From August 2022 to August 2024, Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas and Electric Company collectively disconnected their customers for nonpayment 412,787 times.(j) From August 2022 to August 2024, Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas and Electric Company also compensated their shareholders with $7,620,000,000 in dividends. During that period, the estimated cost to prevent all residential shutoffs for nonpayment was seventy-seven hundredths of 1 percent of that compensation to shareholders.8451. For purposes of this chapter, the following definitions apply:(a) Adult means a person 18 years of age or older.(b) Economic unit means all adults contributing to and sharing in the income and expenses of a household.(c) Electrical corporation has the same meaning as defined in Section 218.(d) Gas corporation has the same meaning as defined in Section 222.(e) Household means a residential address shared by a group of adults, including the utility customer, and children who are living together at that address as one economic unit. A household may contain related and unrelated persons. If an adult has no, or minimal, income and lives with an adult who provides financial support to that adult, both adults are part of the same household. A child under 18 years of age and living with a parent or guardian is part of the same household as the parent or guardian.(f) Local publicly owned electric utility has the same meaning as defined in Section 224.3.(g) Residential service means the provision of electrical or natural gas service to a residential connection at a single-family residence, a multifamily residence, a mobilehome, including, but not limited to, a mobilehome in a mobilehome park, or farmworker housing.(h) Utility means an electrical corporation, local publicly owned electric utility, gas corporation, or local publicly owned gas utility.8452. (a) A utility shall not disconnect a customers residential service for nonpayment if the customers household is the residence of any of the following persons:(1) A child five years of age or younger, regardless of the customers relationship with the child.(2) A person 65 years of age or older.(3) A person with a disability, consistent with subdivision (d).(4) A person with a medical condition, consistent with subdivision (d).(5) A person who is pregnant or 0 to 12 weeks postpartum, consistent with subdivision (e).(b) (1) A utility shall not disconnect a customers residential service for nonpayment if the customer has a household income at or below 200 percent of the federal poverty line.(2) For purposes of paragraph (1), a utility shall deem a residential customer to have a household income below 200 percent of the federal poverty line if any member of the household is a current recipient of a benefit or discount pursuant to one or more of the following programs, or if the customer declares that the households annual income is less than 200 percent of the federal poverty level:(A) The California Alternative Rates for Energy (CARE) program, as described in Section 739.1.(B) The CalWORKS program, as described in Chapter 2 (commencing with Section 11200) of Part 3 of Division 9 of the Welfare and Institutions Code.(C) CalFresh, as described in Section 18900.2 of the Welfare and Institutions Code.(D) General assistance, as described in Part 5 (commencing with Section 17000) of Division 9 of the Welfare and Institutions Code.(E) Medi-Cal, as described in Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code.(F) Federal Supplemental Security Income, as described in Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.).(G) The State Supplementary Payment Program, as described in Chapter 3 (commencing with Section 12000) of Part 3 of Division 9 of the Welfare and Institutions Code.(H) The California Special Supplemental Nutrition Program for Women, Infants, and Children, as described in Section 123280 of the Health and Safety Code.(c) On and after January 1, 2026, each electrical corporation and gas corporation shall automatically reconnect all households that are eligible for protection under subdivision (a) or (b) that had their residential service disconnected due to nonpayment.(d) (1) In order for the prohibition described in paragraph (3) or (4) of subdivision (a) to apply to a customers residential service, the customer, or a member of the customers household, shall notify the utility that the prohibition applies. The customer, or a member of the customers household, shall verify the prohibitions applicability by submitting to the utility, within three weeks after their latest disconnection notice, a certification from a primary care provider that the discontinuation of residential service will be life threatening to, aggravate an existing medical condition of, or pose a serious threat to the health and safety of, a resident of the household where the residential service is provided. Upon receipt of the certification and while verifying the certification, the utility shall not disconnect the customers service or the service of a member of the customers household.(2) Notwithstanding paragraph (1), the customer, or a member of the customers household, may automatically establish the applicability of the prohibitions described in paragraphs (3) or (4) of subdivision (a) without submitting a certification from a primary care provider if the customer, or member of the customers household, participates in the Medical Baseline Program.(e) If a customer, or a member of the customers household, is protected from disconnections pursuant to paragraph (5) of subdivision (a), the customer or member shall submit to the utility the certification of a primary care provider that the customer or member is pregnant or postpartum.8453. (a) Each utility shall notify its residential customers of the prohibitions described in subdivisions (a) and (b) of Section 8452 by doing all of the following:(1) Posting the prohibitions in a publicly available location on the utilitys internet website, if the utility has an internet website.(2) Providing the prohibitions, in writing, to the utilitys residential customers at least twice per year, including before the onset of the summer and winter seasons.(3) Including the prohibitions on each residential customers utility bill.(4) Including the prohibitions on each new residential customers first utility bill.(b) All written notices required pursuant to subdivision (a) shall be provided in English, the languages listed in Section 1632 of the Civil Code, and any other language spoken by 10 percent or more of the customers in the utilitys service area.(c) Each utility that has an internet website shall create an online reporting system available through its internet website that enables its residential customers to report when their residential service has been disconnected in violation of subdivision (a) or (b) of Section 8452. The utility shall promptly respond to reports filed through its online reporting system and shall disclose a violation to the commission.8454. (a) A utility shall offer a residential customer who meets the requirements of subdivision (a) or (b) of Section 8452 a payment plan for the customers electricity or gas service that is provided by the utility, including a percentage of income payment plan, as authorized by the commission in commission Decision 21-10-012 (October 11, 2021), Decision Authorizing Percentage of Income Payment Plan Pilot Programs, in which customers are subject to a monthly bill cap set at a percentage of household income not to exceed 4 percent of household income or one-twelfth of the combined amount of the customers electricity and gas bills immediately before the customers enrollment in the payment plan required to be offered by the utility pursuant to this section, whichever is lower.(b) A residential customer subject to the payment plan shall not be financially responsible for any costs of providing electrical service or gas service exceeding the customers payment plan amount.(c) A utility subject to the disconnection prohibition described in Section 8452 shall be subject to both of the following provisions:(1) The utility shall not disconnect a residential customer described in subdivision (a) or (b) of Section 8452 due to lack of participation in a payment plan described in subdivision (a).(2) The utility may report to a credit reporting agency that a customers outstanding balances are delinquent only if the customer declines to participate in a payment plan or fails to pay in full the amounts due under a payment plan on three separate occasions during the terms of a payment plan described in this section or another payment plan offered by the utility.8455. (a) The commission shall establish a citation program to impose a penalty on an electrical corporation or gas corporation that violates Section 8452.(b) (1) The commission may bring an action in state court for equitable relief regarding an electrical corporations or gas corporations use of a method, act, or practice inconsistent with this chapter.(2) A customer, or a member of the customers household, may bring an action in state court for equitable relief regarding a utilitys or community choice aggregators use of a method, act, or practice inconsistent with this chapter.8456. (a) (1) Each utility providing electrical service or gas service, or both, to residential customers shall collect and submit to the commission monthly data on electrical and gas service terminations, reconnections, bill assistance and payment agreements, arrears, and created and broken payment plans.(2) When collecting and submitting to the commission the monthly data described in paragraph (1), those utilities shall do both of the following:(A) Use metrics that replicate the data provided in the monthly disconnect data reports authorized by the commission pursuant to commission Decision 18-12-013 (December 13, 2018), Decision Adopting Interim Rules to Reduce Residential Customer Disconnections for California-Jurisdictional Energy Utilities.(B) Aggregate electrical and gas service termination and reconnection data by ZIP Code, similar to the monthly disconnect data reports authorized by the commission pursuant to commission Decision 18-12-013 (December 13, 2018), Decision Adopting Interim Rules to Reduce Residential Customer Disconnections for California-Jurisdictional Energy Utilities.(b) The commission shall either include the data as monthly filings in commission Rulemaking 18-07-005 (July 12, 2018), Order Instituting Rulemaking to Consider New Approaches to Disconnections and Reconnections to Improve Energy Access and Contain Costs, or create a new page on the commissions internet website that clearly collects and presents all of the data submitted to the commission pursuant to this section.8457. (a) This chapter does not apply to utility actions related to wildfire prevention or other safety measures, including public safety power shutoffs or deenergization events.(b) This chapter does not apply to unintentional service disruptions or outages. |
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