AB 2408

AB2408:v98#DOCUMENT

Bill Start

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Assembly Bill

No. 2408

An act to add Sections 739.25 and 739.26 to, and to add Part 3 (commencing with Section 9530) to Division 4.8 of, the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL'S DIGEST

AB 2408, as amended, DeMaio. Energy: billing.

Existing law vests the Public Utilities Commission 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 authorizes the commission to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable. Existing law requires that all electrical bills have a standard bill format, as determined by the commission or the governing board, and contain sufficient detail for customers to recalculate their bills for accuracy. Under existing law, a violation of any order, decision, rule, direction, demand, or requirement of the commission is a crime.

This bill would require the commission to require each electrical corporation and gas corporation to disclose all public purpose program charges to ratepayers, including an itemized list of each public purpose program funded through the ratepayers’ bills, as provided. The bill would require the commission to require each electrical corporation and gas corporation to provide an annual public purpose program statement to ratepayers and require the commission to maintain an internet website displaying certain information about all public purpose programs, as provided.

This bill would require the commission to establish a mechanism to allow ratepayers to opt out of funding public purpose programs that are not expressly required by statute for specified purposes or explicitly designated as nonbypassable by statute, and to ensure that those opt-out elections are voluntary and that ratepayers are authorized to annually modify their opt-out elections, as specified.

Because a violation of a commission action implementing the bill’s requirements would be a crime, this bill would impose a state-mandated local program.

This bill would require the commission, if the average price of electricity or natural gas in the state exceeds 10% of the national average price in the preceding quarter, to suspend the collection of all fees charged to ratepayers on electricity or natural gas bills for a period of 6 months. The bill would also require the State Air Resources Board, if the average price of electricity or natural gas in the state exceeds 10% of the national average price in the preceding quarter, to suspend the requirements of the market-based compliance mechanism known as the California Cap-and-Invest Program for a covered entity that is an electrical corporation or gas corporation, and the collection of any moneys under the California Cap-and-Invest Program from those entities, for a period of 6 months.

This bill would require a local publicly owned electric utility or local publicly owned gas utility to adjust its tariff rules to limit the period for adjusting a customer bill, when the utility has undercharged a customer, to 3 months for its residential customers and small business customers and to 3 years for its large business customers, as specified. By imposing new duties 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 Text

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

SECTION 1.

Section 739.25 is added to the Public Utilities Code, to read:

739.25.

(a) The commission shall require each electrical corporation and gas corporation to clearly and conspicuously disclose all public purpose program charges to ratepayers.

(b) The disclosure shall include, at a minimum, all of the following:

(1) A separate line item on each monthly bill labeled “Public Purpose Programs – State-Mandated Charges.”

(2) An itemized list of each public purpose program funded through the ratepayer’s bill, including all of the following:

(A) The name of the public purpose program.

(B) The statutory or regulatory authority for the public purpose program.

(C) The amount charged to the ratepayer for that billing period for the public purpose program.

(3) The total cumulative amount paid by the ratepayer for public purpose programs during the preceding 12-month period.

(c) The commission shall require each electrical corporation and gas corporation to provide an annual public purpose program statement to each ratepayer, which shall include all of the following:

(1) A description of each public purpose program funded.

(2) Aggregate public purpose program expenditures.

(3) Participation rates, if applicable.

(4) A statement identifying whether each public purpose program is subject to opt-out pursuant to Section 739.26.

(d) The commission shall maintain a publicly accessible internet website displaying all public purpose programs, their costs, authorizing statutes, and performance metrics.

SEC. 2.

Section 739.26 is added to the Public Utilities Code, to read:

739.26.

(a) For purposes of this section, “nonessential public purpose programs” means programs that are not expressly required by statute for any either of the following purposes:

(1)Low-income rate assistance.

(2)Baseline energy affordability.

(3)

(1) Grid reliability or emergency response.

(4)

(2) Public safety.

(b) (1) Notwithstanding any other law, the commission shall establish a mechanism to allow a ratepayer to opt out of funding nonessential public purpose programs.

(2) Programs eligible for ratepayer opt-out pursuant to the mechanism may include, but are not limited to, all of the following:

(A) Electric vehicle incentive or infrastructure programs.

(B) Workforce development and marketing programs.

(C) Pilot or demonstration programs.

(D) Electrification incentive programs not related to reliability or safety.

(3) The commission shall ensure all of the following:

(A) Opt-out elections are voluntary and clearly presented.

(B) Ratepayers may annually modify their opt-out elections.

(C) Opt-out elections apply prospectively only.

(4) The commission shall not allow a ratepayer to opt out of funding a program that is explicitly designated as nonbypassable by statute unless the statute is amended to allow a ratepayer to opt out.

(c) If the average price of electricity or natural gas in the state exceeds 10 percent of the national average in the preceding quarter, the commission shall suspend the collection of all fees charged to ratepayers on electricity or natural gas bills for a period of six months.

(d) If the average price of electricity or natural gas in the state exceeds 10 percent of the national average in the preceding quarter, the State Air Resources Board shall suspend the requirements of the market-based compliance mechanism known as the California Cap-and-Invest Program, as described in Section 38562 of the Health and Safety Code, for a covered entity that is an electrical corporation or gas corporation, and the collection of any moneys under the California Cap-and-Invest Program from those entities, for a period of six months.

SEC. 3.

Part 3 (commencing with Section 9530) is added to Division 4.8 of the Public Utilities Code, to read:

PART 3. Billing

9530.

For purposes of this part, all of the following definitions apply:

(a) “Back-billing” means the utility practice of adjusting a customer bill when the utility has undercharged a customer as a result of a billing or metering error.

(b) “Large business” means a commercial business that is not a small business.

(c) “Local publicly owned electric utility” has the same meaning as defined in Section 224.3.

(d) “Small business” has the same meaning as defined in Section 14837 of the Government Code.

9531.

Each local publicly owned electric utility or local publicly owned gas utility shall revise its tariff rules to do both of the following:

(a) For its residential customers and small business customers, limit its back-billing period to three months.

(b) For its large business customers, limit its back-billing period to three years.

SEC. 4.

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