Electricity: rates: optional dynamic rate tariffs.

Plain English Breakdown

The bill summary does not provide detailed information on the criteria for supply-side resource demand response programs or the exact conditions required for new medium and large commercial and industrial customers to receive generation service.

Electricity Rates: Optional Dynamic Tariffs

The bill requires the Public Utilities Commission to develop optional dynamic rate tariffs for large electrical corporation customers, starting with medium and large commercial and industrial customers by July 1, 2028, and residential and small commercial customers by July 1, 2030.

What This Bill Does

• Requires the Public Utilities Commission to develop optional dynamic rate tariffs applicable to each large electrical corporation for their customers.
• Sets deadlines for creating these tariffs: medium and large commercial and industrial customers by July 1, 2028; residential and small commercial customers by July 1, 2030.
• Specifies that each tariff must include time-varying transmission and distribution rates reflecting grid conditions and generation rates based on wholesale market prices.
• Requires the commission to ensure fair billing practices for overcollections or undercollections of revenue requirements from participating customers.
• Allows customers with smart meters access to their interval usage data if they choose a dynamic rate tariff.

Who It Names or Affects

• Large electrical corporations and their customers, including medium and large commercial and industrial customers as well as residential and small commercial customers.

Terms To Know

Dynamic Rate Tariff

A pricing plan for electricity that changes based on the time of day or other factors to reflect current conditions in the power grid.

Smart Meter

An electronic device installed at a customer's home or business that measures and records electricity usage automatically, often providing real-time data.

Limits and Unknowns

• The bill does not specify how the Public Utilities Commission will determine if medium and large commercial and industrial customers can participate in supply-side resource demand response programs.
• It is unclear what specific conditions must be met for new medium and large commercial and industrial customers to receive generation service from an electric service provider starting July 1, 2028.

Official Summary Text

AB 1117, as amended, Schultz.
Electricity: rates: optional dynamic rate tariffs.
Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations. 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 each electrical corporation to identify a separate rate component to fund certain programs that enhance system reliability and provide in-state benefits, and requires that the rate component be a nonbypassable element of the local distribution service.
This bill would require the commission, through a new or existing proceeding, to develop optional dynamic rate tariffs applicable to each large electrical corporation for the large electrical corporation’s customers. The bill would require at least one optional dynamic rate tariff for
each segment of medium and large commercial and industrial customers
no later than
on or before
July 1, 2028, and at least one optional dynamic rate tariff for each segment of residential and small commercial customers
no later than
on or before
July 1, 2030. The bill would require each optional dynamic rate tariff to include, at minimum,
specified components, including
a
time-varying
transmission and
distribution
rates
rate
that
reflect
reflects
dynamic grid
constraints
constraints, a time-varying generation rate that reflects wholesale market conditions,
and nonbypassable charges, as specified. The bill would require the commission to ensure, among other things, any overcollection of transmission-, distribution-, and generation-related revenue requirements from participating bundled customers is returned to the participating bundled customers and any undercollection of those revenue requirements is borne by those same customers. The bill would additionally require that any overcollection of transmission- or distribution-related revenue requirements from unbundled customers be returned to the same unbundled customers, and any undercollection of those revenue requirements be borne by those same customers. The bill would require that any customer of an electrical corporation with an installed smart meter who chooses to take service under an optional dynamic rate tariff be provided access to their own interval usage data directly from the smart meter as that data is generated, as provided. The bill would also require
the commission to determine whether
each large electrical corporation
would be required
to allow medium and large commercial and industrial customers taking service under an optional dynamic rate tariff to also participate in supply-side resource demand response programs, as provided.
The bill would require that any new medium and large commercial and industrial customer energized on or after July 1, 2028, that opts to take service under an optional dynamic rate tariff be eligible to receive generation service from an electric service provider, if specified conditions are met.
The bill would require the commission to consider rules or conditions on participation by vulnerable residential customers to ensure adequate protection for those customers, as provided. The bill would require the commission to incorporate the load shift and load reduction effects of dynamic rate adoption in proceedings on revenue requirement cost recovery, as provided. The bill would require the commission to ensure load-serving entities provide adequate electricity bill comparison information to residential and small business customers interested in taking service under an optional dynamic rate tariff.
Under existing law, a violation of any order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because a violation of a commission 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.

Current Bill Text

Download Bill PDF