Electricity

The law aims to lower electricity costs for ratepayers by scrutinizing utility shareholder returns and requiring consideration of cheaper financing and grid-use options.

What the law does ​

• Requires the California Public Utilities Commission to consider lower shareholder returns for utility capital costs with lower recovery risk, including certain undergrounding, balancing-account, and exempted costs.
• Requires written explanations for decisions on reduced returns and applies any reduction when costs enter a utility’s rate base.
• Launches a commission rulemaking on alternatives to shareholder-equity financing for distribution, generation, and transmission investments.
• Requires electrical corporations to evaluate and report on commission-defined alternative financing options, with a commission report to the Legislature due by December 31, 2028.
• Requires large electrical corporations to publicly provide distribution-grid utilization, peak-capacity, off-peak capacity, and constrained-area data.
• Requires large electrical corporations to assess whether load flexibility or distribution-connected storage can meet identified grid needs more cheaply than traditional upgrades.

Who it affects ​

• Electrical corporations, especially large electrical corporations.
• Utility shareholders whose returns may be reduced for specified lower-risk capital investments.
• Electricity ratepayers.
• Third parties seeking to identify where distributed energy resources could help constrained grid areas.