Electrical corporations: rates: optional dynamic rate tariff.

Crime Education Energy

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Schultz
Last action: 2026-04-15
Official status: In committee: Set, first hearing. Referred to APPR. suspense file.
Effective date: Not listed

Plain English Breakdown

The bill text does not specify exact conditions for PUC approval of cost recovery requests, leaving some uncertainty.

Electric Companies: Rates and Smart Meters

The bill requires large electric companies to offer optional dynamic rate tariffs if they upgrade their smart meter systems, with conditions set by the Public Utilities Commission.

What This Bill Does

Requires the Public Utilities Commission (PUC) to require large electrical corporations to offer at least one optional dynamic rate tariff when upgrading their smart meter infrastructure and billing systems after January 1, 2026.
Ensures that these new tariffs are available to customers once the upgraded infrastructure is in place and costs can be recovered through rates.
Sets conditions for the PUC to approve cost recovery requests from electric companies for smart meter upgrades.

Who It Names or Affects

Large electrical corporations that want to upgrade their smart meters and billing systems after January 1, 2026.
Customers of these large electrical corporations who will be offered optional dynamic rate tariffs once the upgraded infrastructure is in place.

Terms To Know

Dynamic Rate Tariff: A pricing plan for electricity where the price changes based on the time of day or other factors.
Smart Meter Infrastructure: Advanced meters that can communicate with utility companies and provide real-time data about energy usage.

Limits and Unknowns

The bill does not specify what happens if a large electrical corporation fails to comply with the new requirements.
It is unclear how many customers will choose optional dynamic rate tariffs once they are offered.
The exact conditions for PUC approval of cost recovery requests are not detailed in this summary.

Bill History

2026-04-15 California Legislative Information
In committee: Set, first hearing. Referred to APPR. suspense file.
2026-03-23 California Legislative Information
Re-referred to Com. on APPR.
2026-03-19 California Legislative Information
Read second time and amended.
2026-03-18 California Legislative Information
From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 13. Noes 0.) (March 18).
2026-03-03 California Legislative Information
Re-referred to Com. on U. & E.
2026-03-02 California Legislative Information
From committee chair, with author's amendments: Amend, and re-refer to Com. on U. & E. Read second time and amended.
2026-02-23 California Legislative Information
Referred to Com. on U. & E.
2026-02-11 California Legislative Information
From printer. May be heard in committee March 13.
2026-02-10 California Legislative Information
Read first time. To print.

Official Summary Text

AB 1787, as amended, Schultz.
Electrical corporations: rates: optional dynamic rate tariff.
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. Existing law requires that the rate component be a nonbypassable element of the local distribution service.
This bill would require
the commission to require
a large electrical corporation, if the commission approves the large electrical corporation’s request to upgrade its
smart meter infrastructure and related information management and billing systems
relative to infrastructure in place
on
or after
January 1,
2027,
2026,
to offer
to each of
all
its customers
from whom the incremental costs of those upgrades are recovered
at least one optional dynamic rate tariff
upon
no later than when
the upgraded smart meter infrastructure
being
is anticipated to be
placed into
service and its costs being recoverable in rates,
service,
as specified. The bill would
prohibit
require
the commission
from approving
to ensure,
in reviewing
a request of a large electrical corporation to recover costs associated with upgrading its smart meter infrastructure and related information management and billing
systems unless
systems, that
specified conditions are met. The bill would require the
commission, if it orders a large electrical corporation to implement an optional dynamic rate tariff,
commission
to ensure, among other things, the large electrical corporation makes the same time-varying
transmission and
distribution rates available to both bundled customers and unbundled
customers located in the same geographic
area.
area, as specified.
Under existing law, a violation of the Public Utilities Act or an order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because the above provisions would be part of the act and 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

Read the full stored bill text

Download Bill PDF