Official Summary Text
SB 1168, as amended, McNerney.
Data centers:
natural gas and electricity: surcharges.
rate structures.
Existing law vests the Public Utilities Commission
(PUC)
with regulatory authority over public
utilities, including gas corporations and electrical corporations, while local publicly owned electric utilities are under the direction of their governing boards. Existing law establishes a surcharge on all natural gas consumed in the state to fund certain low-income assistance programs, cost-effective energy efficiency and conservation activities, and public interest research and development. Under existing law, the surcharge is in addition to any other charges for natural gas sold or transported for consumption, as defined, in this state. Existing law exempts from the surcharge gas customers within the service territories of municipalities, districts, or public agencies that offer specified services or programs, as specified.
Under existing law, a violation of the Public Utilities Act, or any order, decision, rule, direction, demand, or requirement of the PUC, is a crime.
utilities. 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.
The Energy Resources Surcharge Law imposes a surcharge on consumers for the consumption of electricity purchased from an electric utility, which includes an electrical corporation and local publicly owned electric utility, at a rate annually fixed by the State Energy Resources Conservation and Development Commission (Energy Commission), not to exceed a surcharge rate cap of $0.0003 per kilowatthour. Existing law requires electric utilities to collect the surcharge from consumers, and requires electric utilities, and any consumers who have not had the surcharge collected by an electric utility, to file a return with specified information. Under existing law, a violation of the Energy Resources Surcharge Law is a crime.
This bill would
impose surcharges, on and after January 1, 2027, on natural gas consumed by a data center, as defined, or a
person that consumes natural gas to produce electricity primarily for a data center, at an unspecified rate, and on electricity consumed by a data center that is purchased from an electric utility, which includes an electrical corporation and local publicly owned electric utility, at an unspecified rate, and would require the Energy Commission to fix the rate for both surcharges at a public meeting in each November for each calendar year starting the following January. The bill would specify that the above-described surcharges apply to persons that meet specified criteria, including, among other things, that during any single month beginning January 1, 2027, the person purchased natural gas from a gas corporation, or electricity from an electric utility, that was wholly or partially consumed by a data center. The
bill would require a gas corporation and electric utility to collect the applicable surcharge from each data center, except as provided. The bill would authorize a person to apply to a gas corporation or electric utility, as applicable, for an exemption from a surcharge, as specified.
require the commission to assess opportunities for rate structures to ensure data centers pay a reasonable share of their costs associated with transmission and distribution needs, identify mechanisms to ensure that data centers pay for their proportionate share of load increases and procurements needed to reliably serve their loads using nonemitting resources, and structure rates to alleviate cost pressures on residential ratepayers.
Because certain provisions of this bill would be part of the Public Utilities Act or implemented through a PUC action, and other provisions of the bill would be enforced pursuant to the Energy Resources Surcharge Law, the violation of which would be a crime, the bill would impose a state-mandated local program. Additionally, by imposing new duties on local publicly owned electric utilities, the bill would impose a state-mandated local program.
This bill would require all revenues, interest, and penalties derived from the above-described surcharges to be deposited into the Data Center Excess Energy Usage Surcharge Fund, which the bill would
create in the State Treasury. The bill would continuously appropriate moneys in the fund collected from local publicly owned electric utility territory to the Energy Commission for apportionment to local publicly owned electric utilities, and moneys in the fund collected from electrical corporation territory to the PUC for apportionment to electrical corporations, to fund wildfire-related costs included in rates, as provided.
The bill would require the California Department of Tax and Fee Administration to administer the taxes imposed by the above-described provisions pursuant to the Fee Collection Procedures Law, the violation of which is a crime. By expanding the application of the Fee Collection Procedures Law, 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 specified reasons.
This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of
2
3
of the membership of each house of the Legislature.