AB 2338

AB2338:v98#DOCUMENT

Bill Start

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Assembly Bill

No. 2338

An act to amend Section 9508.5 of the Public Utilities Code, relating to electricity. add Section 739.18 to the Public Utilities Code, relating to rates.

LEGISLATIVE COUNSEL'S DIGEST

AB 2338, as amended, Ransom. Local publicly owned electric utilities: minimum planning reserves and reliability criteria. Electrical corporations and gas corporations: rates: inflation-constrained rate case scenario: standard of review.

Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations and gas corporations. Existing law authorizes the commission to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable.This bill would require the commission to require every electrical corporation or gas corporation, as part of every general rate case application, to submit an inflation-constrained rate case scenario in which cumulative increases in annual expenditures proposed to be authorized in that proceeding do not exceed the projected federal social security beneficiary cost-of-living adjustment, and to compare that inflation-constrained rate case scenario with the primary rate case plan submitted by the corporation. The bill would authorize the commission to authorize expenditures in excess of the inflation-constrained rate case scenario if it determines that the electrical corporation or gas corporation has provided clear and convincing evidence that a higher level of expenditures is necessary to ensure the safe and reliable operation of its electrical system or gas system. The bill would require the commission to apply heightened scrutiny to a request that is not a general rate case application that is submitted by an electrical corporation or gas corporation that is likely to increase total systemwide expenditures beyond the projected federal social security beneficiary cost-of-living adjustment.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 the above-described provisions would be part of the act and a violation of a commission action implementing the above-described provisions would be a crime, this 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 a specified reason.

Existing law requires local publicly owned electric utilities serving end-use customers, among other things, to prudently plan for and procure resources that are adequate to meet its planning reserve margin and peak demand and operating reserves, sufficient to provide reliable service to its customers and to, at a minimum, meet the most recent minimum planning reserve and reliability criteria approved by the Board of Trustees of the Western Systems Coordinating Council or the Western Electricity Coordinating Council. Existing law requires those utilities to provide the State Energy Resources Conservation and Development Commission, upon request, with information the commission determines is necessary to evaluate the progress made by them in meeting the above requirements.

This bill would make nonsubstantive changes to the provision regarding the provision of information to the commission.

Digest Key

Vote: MAJORITY Appropriation: NO Fiscal Committee: NOYES Local Program: NOYES

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

Section 739.18 is added to the Public Utilities Code, to read:

739.18. (a) (1) The commission shall require every electrical corporation or gas corporation, as part of every general rate case application, to do both of the following:(A) Submit an inflation-constrained rate case scenario in which cumulative increases in annual expenditures proposed to be authorized in that proceeding do not exceed the projected federal social security beneficiary cost-of-living adjustment. This scenario shall include the highest priority spending needs of the electrical corporation or gas corporation.(B) Compare the inflation-constrained rate case scenario submitted pursuant to subparagraph (A) with the primary rate case plan submitted by the electrical corporation or gas corporation.(2) The commission may authorize expenditures in excess of the inflation-constrained rate case scenario if it determines that the electrical corporation or gas corporation has provided clear and convincing evidence that a higher level of expenditures is necessary to ensure the safe and reliable operation of its electrical system or gas system.(b) The commission shall apply heightened scrutiny to any request that is not described in subdivision (a), is submitted by an electrical corporation or gas corporation, and is likely to increase total systemwide expenditures beyond the projected federal social security beneficiary cost-of-living adjustment.

SEC. 2. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only 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 XIII B of the California Constitution.

SECTION 1.Section 9508.5 of the Public Utilities Code is amended to read:

9508.5.

Upon request, a local publicly owned electric utility serving end-use customers shall provide the Energy Commission with information the Energy Commission determines is necessary to evaluate the progress made by the local publicly owned electric utility in meeting the requirements of Section 9620.