Energy Bills in Legislature: Affordability, Wildfire Prevention, and Faster Approvals
The California legislature will consider several bills aimed at reducing consumer electricity bills, an aim that is in tension with other efforts to improve grid reliability and to prevent wildfires caused by transmission lines. Investment in these projects could increase electricity rates when utilities pass the costs on to customers.
Cap Utility Rates
SB 332, the Investor-Owned Utilities Accountability Act, would prohibit a compounded annual rate increase on residential customers above the increase in the Consumer Price Index and would allow only one proposed rate increase per year. It would also mandate that shareholders contribute 95% of future deposits into the state's Wildfire Fund, an increase from the current 50%. The bill would also prohibit a utility from disconnecting residential service for nonpayment for certain customers and change executive compensation structures to focus on safety.
Give CPUC Additional Authority over Rate Increases
AB 745 would give the California Public Utilities Commission (CPUC) authority over utility rate increases from transmission projects. The bill would require the commission to review and approve transmission line projects, “including the extension, expansion, upgrade, or other modification of existing transmission lines.”
Underground Power Lines
SB 256 would state the intent of the Legislature to enact legislation to enhance the resiliency and reliability of California’s electrical infrastructure in areas prone to wildfires, earthquakes, and other natural disasters. It would do this by requiring electrical utilities to prioritize the undergrounding of power lines, the implementation of microgrid technologies, and the strengthening of public safety power shutoff standards and accountability. Meanwhile, the bill would ensure the utilization of labor standards that promote a skilled workforce, and providing the commission with the ability to immediately access all relevant electrical fault data related to natural disasters. The undergrounding requirement could increase electricity rates.
State Development of Transmission Projects
SB 330 would authorize the governor to establish one or more pilot projects to develop, finance, or operate electrical transmission infrastructure that is necessary to support clean energy generation to meet the state’s clean energy goals. The bill would require the governor to designate existing state agencies, local public agencies, tribal organizations, or joint powers authorities to implement the pilot projects, which would then develop, finance, operate, and maintain electrical transmission lines.
Accelerate Approval of Transmission Lines
SB 331 would expand the facilities eligible to be deemed environmental leadership development projects to include electrical transmission projects. The bill would authorize an electrical corporation that files an application with CPUC to authorize the new construction of any electrical transmission facility to simultaneously submit to the California Energy Commission (CEC) an application for certification of the facility. The CEC’s certification of a facility proposed by an electrical corporation would satisfy and replace the CPUC’s obligations under CEQA for that facility. The CPUC would be prohibited from approving an application until after the CEC has issued a decision on certification of the proposed facility.
Include Virtual Power Plants in Energy Modeling
AB 740 would require the CEC to include “virtual power plants” in its modeling of energy supplies and electricity costs and rates. Virtual power plants are power sources, such as solar panels.
Grid Regionalization
SB 540 would authorize the California Independent System Operator (CAISO) to use energy markets governed by an independent regional organization. This would allow the ISO to implement tariff modifications accepted by the Federal Energy Regulatory Commission to operate the energy markets whose rules are governed by an independent regional organization. This would allow California to enter into wholesale electricity contracts with other states.
Accounting for Community Solar Cost Savings
AB 1260 would require CPUC to adopt a pricing formula that accounts for the full cost savings to the grid from community solar projects. It would revise and recast the requirements for the customer renewable energy subscription program to specify that the avoided costs include certain avoided cost values. The bill would require CPUC to modify the community renewable energy program to ensure the program meets the bill’s requirements or to adopt a new program and to adopt a final decision by September 1, 2026. The bill would also require the CEC to evaluate community solar and storage projects as a load-modifying resource so that those projects may be counted as a load-modifying resource.
Require Utilities to Report Taxpayer Funding
AB 1020 would require utilities to report certain information for any taxpayer funding that it applied for or received. “Taxpayer funding” is defined as any funds received from public entities in the form of grants, loans, or bonds. The bill would require the California Energy Commission (CEC) to require the utility to report all relevant taxpayer funding the utility is pursuing or has secured. If the CEC determines that a utility is not in compliance with that requirement, the bill would authorize the commission to impose a penalty against the utility. The CEC would also require each utility to promptly deliver the financial benefits of taxpayer funding to ratepayers.
Preventing Ban of Gas Appliances
AB 1238 would prohibit state agencies and local governments from adopting or enforcing a rule, regulation, resolution, or ordinance that directly or indirectly prohibits the use of gas stoves in residential or nonresidential buildings.
Lithium Battery Safety
AB 303 would prohibit a battery energy storage system capable of storing 200 megawatt hours or more of energy within 3,200 feet of a sensitive receptor or is located on an environmentally sensitive site. Sensitive receptors include homes, community centers, and healthcare facilities. AB 1285 would require the State Fire Marshal to develop fire prevention, response, and recovery measures for utility-grade lithium storage facilities.