Official Summary Text
SB 1098, as amended, Pérez.
Public utilities:
certificates of public convenience and necessity.
forecast-based ratemaking.
Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations and gas 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 the commission, whenever the commission authorizes a change in rates reflecting and passing through to customers specific changes in costs, to require a public utility to establish and maintain a balancing account to reflect the balance between the related costs and revenues. Existing law further directs the commission to authorize public utilities to establish catastrophic event memorandum accounts, as provided. Existing law authorizes each electrical corporation to
establish a memorandum account to track costs incurred for wildfire risk mitigation that are unforeseen and incremental to the wildfire risk mitigation programs and activities authorized in the electrical corporation’s revenue requirements, as specified.
This bill would provide that it is the policy of the state that forecast-based ratemaking through the regularly scheduled general rate case process is the preferred and primary method of establishing authorized revenue requirements for electrical corporations and gas corporations. The bill would require the commission, in exercising its ratemaking authority over all public utilities, to adhere to specified principles and requirements, including requirements that forecast-based ratemaking be the default approach for establishing revenue requirements and cost recovery mechanisms and that memorandum accounts and
balancing accounts, as defined, be authorized and maintained only under exceptional circumstances. The bill would require each memorandum account or balancing account authorized by statute or by the commission to include an expiration date. The bill would authorize the commission to establish exceptions to those principles and requirements for categories of costs not reviewed in a general rate case, as provided.
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 above requirements would be a part of the act, and a violation of a commission action implementing those requirements would be a crime, this 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 prohibits certain public utilities from beginning construction of a line, plant, or system, or of an extension thereof, without having first obtained from the Public Utilities Commission a certificate that the present or future public convenience and necessity require or will require that construction, which is referred to as a certificate of public convenience and necessity. If a complaint is filed with the commission alleging that a public utility is engaged or is about to engage in construction work without having secured a certificate of public convenience and necessity, existing law authorizes the commission to require the public utility to cease and desist from engaging in that construction work until the commission makes and files a decision on the complaint, as specified.
This bill would make nonsubstantive changes to the
provision related to cease and desist orders by the commission.