AB 2124

AB2124:v97#DOCUMENT

Bill Start

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Assembly Bill

No. 2124

An act to add and repeal Section 3261 of the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL'S DIGEST

AB 2124, as amended, Pacheco. Electricity and natural gas: legislation imposing mandated programs and requirements: third-party review.

Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations and gas corporations.

Existing law finds and declares that the California Council on Science and Technology (CCST) was organized as a nonprofit corporation at the request of the Legislature for the specific purpose of offering expert advice to the state government on public policy issues significantly related to science and technology. Existing law requests the CCST, every 3 years, to assess the infrastructure project types, scale, and pace necessary to achieve the state’s energy, climate change, and air quality goals, as specified.

This bill would require the CCST to establish, on or before January March 1, 2027, upon appropriation by the Legislature, a program to, upon request of the Legislature, analyze legislation that would establish a mandated requirement or program, as defined, or otherwise affect electrical corporation or gas corporation ratepayers, as specified. The bill would require the CCST to develop and implement conflict-of-interest provisions to prohibit a person from participating in an analysis for which the person knows or has reasons to know that the person has a material financial interest. The bill would repeal these provisions on January 1, 2032.

Digest Key

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

Bill Text

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

SECTION 1.

(a) The Legislature finds and declares all of the following:

(1) There are an increasing number of proposals that mandate certain programs be paid by ratepayers of electrical corporations and gas corporations.

(2) Many of the proposals would potentially result in positive outcomes that would be in the public interest.

(3) Those proposals providing benefits may also contribute to the cost and affordability of electricity and natural gas service.

(b) It is the intent of the Legislature to do all of the following:

(1) Promote affordable electricity and natural gas utility rates while also addressing the critical climate issues of the time, including the requirements for renewable and zero-carbon electricity and economywide decarbonization in law.

(2) Preemptively address the issue that electricity and natural gas utility rates are increasing.

(3) Analyze the estimated costs and efficacy of a new program or requirement imposed under proposed legislation that would be paid for by ratepayers of electrical corporations and gas corporations to ensure the cost impact and potential benefits may be fully weighed and carefully considered before enacting the legislation.

(c) It is further the intent of the Legislature that the California Council on Science and Technology conduct a systematic review of proposed programs or requirements imposed under proposed legislation that would be paid for by ratepayers of electrical corporations and gas corporations to inform the Legislature in determining whether mandating a particular program or requirement is in the ratepayers’ interests, and for the California Council on Science and Technology to publish a written analysis of the estimated cost and efficacy of each legislative proposal, including relevant expert data.

SEC. 2.

Section 3261 is added to the Public Utilities Code, to read:

3261.

(a) For purposes of this section, all of the following definitions apply:

(1) “Council” means the California Council on Science and Technology, as defined in Section 12100 of the Government Code.

(2) “Electrical or gas corporation” means an electrical corporation, as defined in Section 218, or a gas corporation, as defined in Section 222, with more than 100,000 service connections.

(3) “Mandated program or requirement” means any of the following:

(A) A new requirement imposed on an electrical or gas corporation.

(B) A new program that would be paid for by the ratepayers of an electrical or gas corporation.

(C) A revision to an existing requirement imposed on an electrical or gas corporation or to an existing program paid for by the ratepayers of an electrical or gas corporation.

(b) (1) The council shall establish, on or before January March 1, 2027, upon appropriation by the Legislature, a program to, upon request of the Legislature and in a manner and pursuant to a timeline agreed to by the Legislature and the council, analyze legislation that would establish a mandated program or requirement or otherwise affect electrical or gas ratepayers, including relevant data on all of the following:

(A) Whether the legislation will increase electricity or natural gas utility rates, and, if so, the analysis shall assess the potential costs to all categories of ratepayers.

(B) The potential benefits to all categories of ratepayers resulting from the legislation, with a specific focus on tangible benefits related to the safe, reliable delivery of electricity or natural gas including whether the legislation is directly related to, or necessary for, the delivery of safe, reliable electricity and natural gas utility service.

(C) Similar mandated programs or requirements applicable at the time of the analysis, the costs associated with those mandated programs or requirements, and if those mandated programs or requirements are consistent with the state’s climate change policy requirements, including, but not limited to, reducing the emissions of greenhouse gases, the carbon neutrality targets set forth in Section 454.53 of this code or Section 38562.2 of the Health and Safety Code, and the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1).

(D) All existing legislatively mandated programs applicable at the time of the analysis that are paid for by the ratepayers of electrical and gas corporations.

(E) The impacts of the legislation on jobs, the economy, and communities that are identified as disadvantaged communities under Section 39711 of the Health and Safety Code or low-income communities as defined in Section 39713 of the Health and Safety Code.

(F) The analysis of the costs and benefits of the legislation in relation to its intended outcomes, including, but not limited to, impacts beyond the electricity or natural gas market and any identified nonmonetary effects, including, but not limited to, improvements in environmental quality, public health, and climate conditions.

(G) The analysis of available funding sources for the mandated program or requirement, including, but not limited to, sources other than the ratepayers of electrical or gas corporations, including, but not limited to, the General Fund, environmental funds, or low-income programs, including, but not limited to, CalFresh (Chapter 10 (commencing with Section 18900) of Part 6 of Division 9 of the Welfare and Institutions Code).

(2) The request may be made by the chairperson of the appropriate policy or fiscal committee or committee staff, the Speaker of the Assembly, or the President pro Tempore of the Senate, and the legislation shall be provided to the council for analysis.

(3) The council shall conduct each analysis based on the best available data at the time of the analysis. The state shall indemnify, defend, and hold harmless the council and its officers, directors, employees, subcontractors, agents, and expert partners for any claim arising out of the analysis.

(c) To avoid conflicts of interests, the council shall develop and implement conflict-of-interest provisions to prohibit a person from participating in conducting an analysis described in this section for which the person knows or has reasons to know that the person has a material financial interest, including, but not limited to, a person who has a consulting or other agreement with another person or organization that would be affected by the legislation.

(d) This section shall remain in effect only until January 1, 2032, and as of that date is repealed.