Rates: inappropriate cost recovery.

Plain English Breakdown

The official source material does not provide detailed specifics about what constitutes 'inappropriate cost recovery' or the exact penalties imposed by the PUC.

Rules for Utility Costs

AB-2065 sets rules to prevent utilities from charging customers for costs not approved by the Public Utilities Commission and extends the deadline for a plan on financing transmission infrastructure projects until December 1, 2027.

What This Bill Does

• Prohibits electrical, gas, water, sewer system, and telephone companies from adding certain costs to customer bills if those costs are not approved by the Public Utilities Commission (PUC).
• Requires the PUC to disallow recovery of inappropriate costs from ratepayers and impose a financial penalty on utilities for engaging in inappropriate cost recovery.
• Extends the deadline for submitting a plan to develop financing options for transmission infrastructure projects until December 1, 2027.

Who It Names or Affects

• Public Utilities Commission (PUC)
• Electrical, gas, water, sewer system, and telephone companies
• Customers of these utilities

Terms To Know

above-the-line account

A specific type of financial record used by utilities to track costs that can be passed on to customers.

Transmission Infrastructure Accelerator (accelerator)

An initiative within the Governor’s Office of Business and Economic Development to develop plans for building transmission infrastructure projects.

Limits and Unknowns

• The bill does not specify how utilities will be penalized if they break these rules, other than stating penalties equal to or three times the amount of inappropriate cost recovery.
• It is unclear what specific costs are excluded from recovery by statute, commission decision, or rule without further details.

Official Summary Text

AB 2065, as amended, Petrie-Norris.
Transmission Infrastructure Accelerator: private-public partnership plan.
Rates: inappropriate cost recovery.
Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations, gas corporations, water corporations, sewer system corporations, or telephone 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 prohibits a utility from recording to an above-the-line account, as defined, or otherwise recovering from ratepayers specified costs.
This bill would prohibit an electrical corporation, gas corporation, water corporation, sewer system corporation, or telephone
corporation from engaging in inappropriate cost recovery by recording to an above-the-line account, as defined, a cost that meets specified criteria, including if the cost is categorically excluded from ratepayer recovery by statute, commission decision, or commission rule, exceeds the scope of the commission’s authorization for the specific account or application, or has already been authorized for recovery through another ratemaking mechanism. The bill would require the commission, upon making a determination that a corporation has engaged in inappropriate cost recovery, to disallow recovery of the inappropriate cost from ratepayers and to impose a financial penalty for inappropriate cost recovery equal to the amount of the inappropriate cost recovery or 3 times that amount, except as specified.
Under existing law, a violation of the Public Utilities Act or
any order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because the provisions of this bill would be a part of the act and because a violation of a commission action implementing the 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.
Existing law requires the Energy Unit within the Governor’s Office of Business and Economic Development (GO-Biz), in coordination with certain entities, to establish a Transmission Infrastructure Accelerator (accelerator) and requires the accelerator to, among other things, develop a public-private partnership plan to develop financing options that maximize debt financing to reduce overall capital costs and facilitate public-private partnership development of eligible transmission projects, as defined, to achieve ratepayer savings. Existing law requires the accelerator to submit its public-private partnership plan to the Legislature on or before July 1, 2027.
This bill would extend the deadline to submit that plan to December 1, 2027.

Current Bill Text

Download Bill PDF