Bill Text: CA AB3264 | 2023-2024 | Regular Session | Chaptered
Bill Title: Energy: cost framework: residential rates: demand-side management programs report: electrical transmission grid study.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2024-09-27 - Chaptered by Secretary of State - Chapter 762, Statutes of 2024. [AB3264 Detail]
Download: California-2023-AB3264-Chaptered.html
Assembly Bill
No. 3264
CHAPTER 762
An act to amend Section 913.5 of, to add Sections 369.5 and 455.7 to, and to add and repeal Section 913.10 of, the Public Utilities Code, relating to energy.
[
Approved by
Governor
September 27, 2024.
Filed with
Secretary of State
September 27, 2024.
]
LEGISLATIVE COUNSEL'S DIGEST
AB 3264, Petrie-Norris.
Energy: cost framework: residential rates: demand-side management programs report: electrical transmission grid study.
Existing law vests the Public Utilities Commission (PUC) with regulatory authority over public utilities, including electrical corporations and gas corporations.
This bill would require the PUC, in consultation with the State Energy Resources Conservation and Development Commission (Energy Commission), to develop a framework for assessing, tracking, and analyzing total annual energy costs paid by residential households in California, as specified. The bill would authorize the PUC to use the framework for purposes of evaluating any request by an electrical corporation and gas corporation to track new spending eligible for recovery or to adjust a revenue requirement. The bill would require the PUC to submit a report to the Legislature containing the framework and
certain information. The bill would require large electrical corporations, as defined, and large gas corporations, as defined, by January 1, 2026, and each year thereafter, to publish on their internet websites and provide to the PUC a visual representation of certain cost categories included in residential electric or gas rates for the succeeding calendar year.
Existing law requires the PUC, triennially, to submit a report to the Legislature on the energy efficiency and conservation programs it oversees.
This bill instead would require the PUC to submit a report to the Legislature on the demand-side management programs it oversees or that are paid for by ratepayers of community choice aggregators, electrical corporations, or gas corporations. The bill would revise the information required to be
included in the report.
This bill would require the PUC, in consultation with the Energy Commission, the California Infrastructure and Economic Development Bank, and the Independent System Operator, by July 1, 2025, to submit to the Governor and the Legislature a study identifying proposals to reduce the cost to ratepayers of expanding the state’s electrical transmission grid as necessary to achieve the state’s goals, to meet the state’s requirements, and to reduce the emissions of greenhouse gases, as specified in law, regulation, or executive order.
Under existing law, a violation of the Public Utilities Act or an order, decision, rule, direction, demand, or requirement of the PUC is a crime.
Because certain of the above-described provisions would be part of the act and a violation of those provisions or a PUC action implementing this bill’s requirements would be a crime, 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 a specified reason.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESBill 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) Energy costs can significantly burden residential households in California.
(2) Increases in total energy costs disproportionately burden low-income and disadvantaged communities.
(3) The Public Utilities Commission, as a part of its 2021 Utility Costs and Affordability En Banc hearings, developed a Residential Energy Cost Calculator
that assessed total electricity, natural gas, and gasoline prices and price forecasts.
(4) The total energy costs that are borne by residential households include not only rate regulated forms of energy, such as electricity and natural gas, but also other forms of energy, such as gasoline, propane, and diesel fuel.
(b) It is the intent of the Legislature to provide a mechanism to assess, track, and analyze total annual energy costs paid by residential households in California to identify evidence-based approaches to mitigating, reducing, and managing those costs.
SEC. 2.
Section 369.5 is added to the Public Utilities Code, to read:369.5.
(a) On or before December 31, 2026, the commission, in consultation with the Energy Commission, shall develop a framework for assessing, tracking, and analyzing total annual energy costs paid by residential households in California. The framework shall include all of the following:(1) A methodology for identifying, categorizing, and quantifying major residential household energy sources.
(2) The total annual energy costs borne by residential households.
(3) Annual costs for major residential household energy sources, including, but not limited to, electricity, natural gas, propane, gasoline, and diesel.
(4) Changes in the total annual energy costs for residential households over time.
(5) The relative contributions of different energy sources to the total annual energy costs borne by residential households.
(6) The annual growth rate of energy costs for residential households by energy source.
(7) Projections of possible future total energy costs for residential households for the next 10 years.
(8) Scenarios of actions that may lead to a 5 percent, 10 percent, and 15 percent reduction in total annual energy costs paid by residential households in 2035, relative to 2024 total annual energy costs after adjusting for inflation.
(9) An assessment of the actions identified pursuant to paragraph (8) and the effects they may have on public health and safety, electrical and gas system reliability, and the achievement of the state’s 2045 clean electricity goal developed pursuant to Section 454.53 and the state’s 2045 carbon neutrality goal developed pursuant to Section 38562.2 of the Health and Safety Code.
(b) The commission may use the total annual energy cost framework pursuant to subdivision (a) for purposes of evaluating any request by an electrical corporation and gas corporation to track new spending eligible for recovery or to adjust a revenue requirement. In evaluating any such request, the commission shall consider whether the electrical corporation and gas corporation should take additional actions to achieve the reductions in total annual energy costs identified in paragraph (8) of subdivision (a).
(c) (1) On or before December 31, 2026, the commission shall submit a report to the Legislature containing the framework and the information in subdivision (a).
(2) Pursuant to Section 10231.5 of the Government Code, this subdivision shall become inoperative on December 31, 2030.
SEC. 3.
Section 455.7 is added to the Public Utilities Code, to read:455.7.
(a) For purposes of this section, the following definitions apply:(1) “Large electrical corporation” has the same meaning as defined in Section 3280.
(2) “Large gas corporation” means a gas corporation with 250,000 or more customer accounts within the state.
(b) By January 1, 2026, and each year thereafter, each large electrical corporation shall publish on its internet website, and provide to the commission, a visual representation of the cost categories included in residential electric rates for the succeeding calendar year that includes all of the following cost categories:
(1) Costs associated with electrical distribution grid infrastructure, not including costs associated specifically with wildfire mitigation.
(2) Costs associated with wildfire mitigation activities pursuant to Chapter 6 (commencing with Section 8385) of Division 4.1.
(3) Costs associated with the electrical transmission infrastructure, separating transmission costs in the jurisdiction of the commission from those in the jurisdiction of the Federal Energy Regulatory Commission.
(4) Costs due to energization, including pursuant to Article 14.5 (commencing with Section 931) of Chapter 4.
(5) Costs due to catastrophic events and emergencies.
(6) Costs due to net metering and net billing tariffs, including pursuant to Sections 2827 to 2827.10, inclusive.
(7) Costs due to commodity prices, including natural gas.
(8) Costs due to energy efficiency programs, including programs established pursuant to Sections 379.5, 381, 382, 399.4, and 399.8.
(9) Costs due to insurance, including self-insurance.
(10) Costs due to metering and billing.
(11) Costs due to taxes.
(12) Costs due to unrecovered arrearages.
(13) Any other cost categories, as determined by the commission.
(c) On or before January 1, 2026, and each year thereafter, each large gas corporation shall publish on its internet website, and provide to the commission, a visual representation of the cost categories included in residential gas rates for the succeeding calendar year that includes all of the following cost categories:
(1) Costs associated with gas distribution grid infrastructure.
(2) Costs associated with gas transmission infrastructure, separating transmission costs in the jurisdiction of the commission from those in the jurisdiction of the Federal Energy Regulatory Commission.
(3) Costs due to catastrophic events and emergencies.
(4) Costs due to commodity prices, including natural
gas.
(5) Costs due to energy efficiency programs, including programs established pursuant to Sections 379.5, 382, and 399.4.
(6) Costs due to insurance.
(7) Costs due to metering and billing.
(8) Costs due to taxes.
(9) Costs due to unrecovered arrearages.
(10) Any other cost categories, as determined by the commission.
SEC. 4.
Section 913.5 of the Public Utilities Code is amended to read:913.5.
(a) (1) Before July 1, 2022, and every three years thereafter, the commission shall submit a report to the Legislature on the demand-side management programs it oversees or that are paid for by ratepayers of community choice aggregators, electrical corporations, or gas corporations, including, but not limited to, energy efficiency and demand response programs.(2) The report shall include a list of all demand-side management programs, inclusive of codes and standards programs, with evaluations for each program that include, but are not limited to, all of the following:
(A) Program description and target population.
(B) Authorized budgets and actual expenditures.
(C) Projected and actual energy savings over the program cycle.
(D) Projected and actual bill savings to the average participating and the average nonparticipating ratepayer.
(E) Cost-effectiveness analysis, including a total resource cost test and a program administrator cost test.
(F) Public interest impacts, as applicable.
(G) Actual customers served, aggregated by customer class, geographic distribution, and income level.
(H) Peak demand reduction, as applicable.
(I) Total system benefits, as adopted in the commission’s Decision 21-09-037 (September 23, 2021) Decision Adopting Energy Efficiency Goals for 2022-2032.
(3) The commission may provide evaluations at a portfolio level in addition
to the individual program evaluation required pursuant to paragraph (2).
(b) In the report submitted pursuant to subdivision (a), the commission shall also report to the Legislature on the progress toward achieving the targets established pursuant to subdivision (a) of Section 454.55 and subdivision (a) of Section 454.56. The commission shall include specific strategies for, and an update on, progress toward maximizing the contribution of energy and electricity efficiency
bill savings in disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code.
SEC. 5.
Section 913.10 is added to the Public Utilities Code, to read:913.10.
(a) On or before July 1, 2025, the commission, in consultation with the Energy Commission, the California Infrastructure and Economic Development Bank, and the Independent System Operator, shall submit to the Governor and the Legislature a study, including findings and recommendations, identifying proposals to reduce the cost to ratepayers of expanding the state’s electrical transmission grid as necessary to achieve the state’s goals, to meet the state’s requirements, and to reduce the emissions of greenhouse gases, as specified in statute, regulation, or executive order.(b) In conducting the study, the commission shall evaluate, at minimum, all of the following:
(1) Public
financing of transmission projects, including approaches to lower the cost of financing, and the use of nonratepayer funds to pay, a portion of the costs of transmission projects necessary to achieve relevant public policy goals. The study shall identify nonratepayer funding sources that may be suitable for this purpose.
(2) The costs and benefits of different ownership models, lease agreements, or other public-private arrangements necessary to build the transmission projects using public financing.
(3) Other proposals identified by the commission or other consulted parties that, in the judgment of the commission, could accelerate the development of, and reduce the cost to ratepayers of expanding, the state’s electrical transmission grid.
(4) Estimated cost savings of each option.
(5) Thresholds or criteria for transmission projects to be considered eligible for public financing, including, but not limited to, project size, cost, location, or achievement of statewide policy.
(6) Appropriate cost limitations and protections in exercising public financing for this purpose.
(7) Relevant local, state, and federal statute applicable to public financing of transmission infrastructure.
(c) In conducting the study, the commission shall provide opportunities for public input on which proposals to consider and on draft findings and recommendations.
(d) Pursuant to Section 10231.5 of the Government Code, this section is repealed on January 1, 2030.
