20250AB__094295AMD INTRODUCED 2025-02-19 AMENDED_ASSEMBLY 2025-03-25 AMENDED_ASSEMBLY 2025-05-05 AMENDED_ASSEMBLY 2025-06-02 AMENDED_SENATE 2025-07-17 2025 AB AMD Introduced by Assembly Member Calderon (Coauthor: Senator Archuleta) LEAD_AUTHOR ASSEMBLY Calderon COAUTHOR SENATE Archuleta

An act to amend

Section 748.5 of the Public Utilities Code, relating to electricity. electricity Electricity: climate credits. The California Global Warming Solutions Act of establishes the State Air Resources Board as the state agency responsible for monitoring and regulating sources emitting greenhouse gases. The act authorizes the state board to include the use of market-based compliance mechanisms in regulating those emissions. The implementing regulations adopted by the state board provide for the direct allocation of greenhouse gas allowances to electrical corporations pursuant to a market-based compliance mechanism.

Existing law vests the Public Utilities Commission (PUC) with regulatory authority over public utilities, including electrical corporations. Existing law requires the PUC to continue a program of assistance to low-income electric and gas customers with annual household incomes that are no greater than 200% of the federal poverty guidelines, as specified, which is referred to as the California Alternate Rates for Energy (CARE) program.

Existing law also requires the PUC to continue a program of assistance to residential customers of the state’s largest electrical corporations consisting of households of or more persons with total household annual gross income levels between 200% and 250% of the federal poverty guideline level, which is referred to as the Family Electric Rate Assistance (FERA) program.

Existing law, except as provided, requires revenues received by an electrical corporation as a result of the direct allocation of greenhouse gas allowances to be credited directly to residential, small business, and emissions-intensive trade-exposed retail customers of the electrical corporation, commonly known as the California Climate Credit. This bill would exclude residential customers from receiving the California Climate Credit if they are not enrolled in the CARE or FERA program and their total electricity bills for the previous year were less than $300.

Under existing law, a violation of the Public Utilities Act, or of an order, decision, rule, direction, demand, or requirement of the commission, is a crime. Because the provisions of this bill would be part of the Public Utilities Act, and a violation of a commission action implementing its 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 vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations, while local publicly owned electric utilities are generally under the direction of their governing boards.

Existing law requires each electrical utility, including each electrical corporation, local publicly owned electric utility, electrical cooperative, or other entity that offers electrical service, except as specified, to develop a standard contract or tariff that provides for net energy metering (NEM), which, among other things, compensates each eligible customer-generator, as defined, for the electricity it generated during a preceding 12-month period that exceeds the electricity supplied by the electrical utility through the electrical grid to the eligible customer-generator during that same period, as provided.

Existing law requires each electrical utility to make the contract or tariff available to eligible customer-generators, upon request, on a first-come-first-served basis until the time that the total rated generating capacity used by those eligible customer-generators exceeds 5% of the electrical utility’s aggregate customer peak demand, except as specified.

This contract or tariff is commonly known as NEM 1.0.</xhtml:p><xhtml:p>Existing law requires the commission to develop an additional standard contract or tariff, which may include NEM, for eligible customer-generators that are customers of large electrical corporations, as defined.

Existing law requires each large electrical corporation to offer this standard contract or tariff to its eligible customer-generators beginning July 1, 2017, or before that date if ordered to do so by the commission because it has reached the above-mentioned 5% NEM 1.0 program limit, and prohibits limiting the amount of generating capacity or the number of new eligible customer-generators entitled to receive service pursuant to this standard contract or tariff, as specified. This contract or tariff is commonly known as NEM 2.0.

Existing law authorizes the commission to revise the standard contract or tariff as appropriate to achieve specified objectives.</xhtml:p><xhtml:p>Pursuant to its authority, the commission adopted Decision 22-12-056 (December 19, 2022), commonly known as the net billing tariff, that creates a successor tariff to the NEM 1.0 and 2.0 tariffs and includes specified elements, including, among other things, retail export compensation rates based on hourly avoided cost calculator values averaged across days in a month, as specified, and an avoided cost calculator plus adder, based on cents per kilowatt-hour exported, available during the first years of the successor tariff, as specified, known as the avoided cost calculator plus glide path.</xhtml:p><xhtml:p>This bill would, on and after January 1, 2026, for a large electrical corporation customer that becomes a new eligible customer-generator by purchasing real property that contains a renewable electrical generation facility upon which a prior eligible customer-generator took service, require the new eligible customer-generator to take service under the then-current applicable tariff adopted by the commission after December 1, 2022, disqualify the new eligible customer-generator from eligibility for the avoided cost calculator plus glide path, as specified, and require the new eligible customer-generator to pay all nonbypassable charges that are applicable to customers that are not eligible customer-generators.</xhtml:p><xhtml:p>This bill would authorize the commission to adopt a new tariff for a new eligible customer-generator that purchased real property that contains a renewable electrical generation facility, and to require those eligible customer-generators to use that new tariff if it results in a lower cost impact on customers who are not eligible customer-generators than the prior tariff that was applicable to those eligible customer-generators, as provided.</xhtml:p><xhtml:p>Existing law, the California Global Warming Solutions Act of 2006, designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases and requires the state board to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the level by 2030.

The act, until January 1, 2031, authorizes the state board to adopt a regulation establishing a market-based compliance mechanism that meets certain requirements.

Pursuant to this authority, the state board adopted the Cap-and-Trade Program that, among other things, makes certain electrical distribution utilities eligible for direct allocation of greenhouse gas allowances, as specified.</xhtml:p><xhtml:p>Existing law requires the commission to require revenues, including any accrued interest, received by an electrical corporation as a result of the direct allocation of greenhouse gas allowances to electric utilities pursuant to the program, as provided, to be credited directly to the residential, small business, and emissions-intensive trade-exposed retail customers of the electrical corporation.</xhtml:p><xhtml:p>This bill would, beginning January 1, 2026, disqualify eligible customer-generators from receiving this credit.</xhtml:p><xhtml:p>The bill would exempt from its provisions new eligible customer-generators that are public schools or agricultural customers.</xhtml:p><xhtml:p>Under existing law, a violation of any order, decision, rule, direction, demand, or requirement of the commission is a crime.</xhtml:p><xhtml:p>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.</xhtml:p><xhtml:p>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.</xhtml:p><xhtml:p>This bill would provide that no reimbursement is required by this act for a specified reason.</xhtml:p>"?> MAJORITY NO YES YES NO NO NO NO NO NO NO The people of the State of California do enact as follows:

SECTION

Section 748.5 of the Public Utilities Code is amended to read: 748.5. (

a) Except as provided in subdivisions (

c) and (d), the commission shall require revenues, including any accrued interest, received by an electrical corporation as a result of the direct allocation of greenhouse gas allowances to electric utilities pursuant to subdivision (

b) of

Section of Title of the California Code of Regulations to be credited directly to the residential, small business, and emissions-intensive trade-exposed retail customers of the electrical corporation. (

b) Not later than January 1, 2013, the commission shall require the adoption and implementation of a customer outreach plan for each electrical corporation, including, but not limited to, such measures as notices in bills and through media outlets, for purposes of obtaining the maximum feasible public awareness of the crediting of greenhouse gas allowance revenues. Costs associated with the implementation of this plan are subject to recovery in rates pursuant to

Section 454. (

c) The commission may allocate up to percent of the revenues, including any accrued interest, received by an electrical corporation as a result of the direct allocation of greenhouse gas allowances to electrical distribution utilities pursuant to subdivision (

b) of

Section of Title of the California Code of Regulations, for clean energy and energy efficiency projects established pursuant to statute that are administered by the electrical corporation, or a qualified third-party administrator as approved by the commission, and that are not otherwise funded by another funding source. (

d) A residential customer who is not enrolled in the California Alternate Rates for Energy (CARE) program pursuant to

Section 739.1 or the Family Electric Rate Assistance Program (FERA) pursuant to

Section 739.12, and whose total annual electricity bills from the previous year is less than three hundred dollars ($300), shall not receive the credit described in subdivision (a).

SEC. 2. No reimbursement is required by this act pursuant to

Section of

Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of

Section of the Government Code, or changes the definition of a crime within the meaning of

Section of

Article XIII B of the California Constitution. <caml:Num>SECTION 1.</caml:Num><caml:Content><xhtml:p>The Legislature finds and declares all of the following:</xhtml:p><xhtml:p>(a)<xhtml:span class="EnSpace"/>Senate Bill of the 2017–18 Regular Session (Chapter of the Statutes of 2018) established the state policy that eligible renewable energy resources and zero-carbon resources supply percent of all retail sales of electricity to California end-use customers by 2045.

Senate Bill of the 2021–22 Regular Session (Chapter of the Statutes of 2022) established the same percent renewable energy procurement standard for electricity serving all state agencies by 2035.</xhtml:p><xhtml:p>(b)<xhtml:span class="EnSpace"/>Senate Bill of the 2001–02 Regular Session (Chapter of the Statutes of 2002) established the California Renewables Portfolio Standard Program, which has been subsequently amended to require all load-serving entities to procure percent of their electricity portfolios from eligible renewable energy resources by 2030.</xhtml:p><xhtml:p>(c)<xhtml:span class="EnSpace"/>Rooftop solar has been integral towards meeting the state’s clean energy goals, with over 2,000,000 solar installations in California as of 2024.</xhtml:p><xhtml:p>(d)<xhtml:span class="EnSpace"/>Subsidies for residential rooftop solar have been provided to spur installation since the enactment of Senate Bill of the 1995–96 Regular Session (Chapter of the Statutes of 1995).

These subsidies offer solar customers credits on their electricity bills for the self-generated electricity they send back to the electrical grid.</xhtml:p><xhtml:p>(e)<xhtml:span class="EnSpace"/>The current rates of these subsidies create a significant shortfall for covering the fixed costs of the electrical grid, and nonsolar ratepayers make up the difference, often referred to as a cost shift.</xhtml:p><xhtml:p>(f)<xhtml:span class="EnSpace"/>According to the Public Advocate’s Office of the Public Utilities Commission, this cost shift on nonrooftop solar customers of Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas & Electric Company has grown from $3.4 billion annually in to $8.5 billion annually by the end of 2024.

These trends suggest that the cost shift will continue to grow.</xhtml:p><xhtml:p>(g)<xhtml:span class="EnSpace"/>For the average nonsolar ratepayer, this cost shift accounts for to percent, inclusive, of their electricity bill.</xhtml:p><xhtml:p>(h)<xhtml:span class="EnSpace"/>In 2023, the average annual household income of residential rooftop solar customers was an estimated $115,000.</xhtml:p><xhtml:p>(i)<xhtml:span class="EnSpace"/>Conversely, in 2021, low-income customers that were enrolled in the California Alternate Rates for Energy program represented percent of total residential customers, but only 13.1 percent of these customers benefited from rooftop solar subsidy programs.</xhtml:p><xhtml:p>(j)<xhtml:span class="EnSpace"/>As the overall cost of living increases in the state, the Legislature must mitigate cost shift inequities and reduce utility bills by evaluating programs funded by utility ratepayers.</xhtml:p></caml:Content></caml:BillSection><caml:BillSection id="id_5380870A-2D0F-4A6E-8EA9-F4F5C6E5E341"><caml:Num>SEC. 2.</caml:Num><caml:ActionLine action="IS_ADDED" xlink:href="urn:caml:codes:PUC:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2F%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'2827.2'%5D)" xlink:label="fractionType: LAW_SECTION" xlink:type="locator">Section 2827.2 is added to the <caml:DocName>Public Utilities Code</caml:DocName>, to read:</caml:ActionLine><caml:Fragment><caml:LawSection id="id_7898460A-4BF8-4BDD-BAE9-CAB3F211171F"><caml:Num>2827.2.</caml:Num><caml:LawSectionVersion id="id_74C4CB1F-006F-4EA3-A234-43949E274DCD"><caml:Content><xhtml:p>(a)<xhtml:span class="EnSpace"/>On and after January 1, 2026, all of the following shall apply to a customer of a large electrical corporation that becomes a new eligible customer-generator by purchasing real property that contains a renewable electrical generation facility upon which a prior eligible customer-generator took service:</xhtml:p><xhtml:p>(1)<xhtml:span class="EnSpace"/>The new eligible customer-generator shall take service under the then-current applicable tariff adopted by the commission pursuant to

Section 2827.1 after December 1, 2022.</xhtml:p><xhtml:p>(2)<xhtml:span class="EnSpace"/>The new eligible customer-generator shall not be eligible for the avoided cost calculator plus glide path provided in commission Decision 22-12-056 (December 19, 2022), Order Instituting Rulemaking to Revisit Net Energy Metering Tariffs Pursuant to Decision 16-01-044, and to Address Other Issues Related to Net Energy Metering.</xhtml:p><xhtml:p>(3)<xhtml:span class="EnSpace"/>The new eligible customer-generator shall pay all nonbypassable charges applicable to customers who are not eligible customer-generators.</xhtml:p><xhtml:p>(b)<xhtml:span class="EnSpace"/>The commission may adopt a new tariff for new eligible customer-generators described in subdivision (a), and may require those eligible customer-generators to use that new tariff if it results in a lower cost impact on customers who are not eligible customer-generators than the prior tariff that was applicable to those eligible customer-generators.</xhtml:p><xhtml:p>(c)<xhtml:span class="EnSpace"/>On and after January 1, 2026, eligible customer-generators shall not receive the customer credit provided in

Section 748.5.</xhtml:p><xhtml:p>(d)<xhtml:span class="EnSpace"/>This

section does not apply to new eligible customer-generators that are public schools or agricultural customers.</xhtml:p><xhtml:p>(e)<xhtml:span class="EnSpace"/>For purposes of this section, all of the following

definitions apply:</xhtml:p><xhtml:p>(1)<xhtml:span class="EnSpace"/>“Eligible customer-generator” has the same meaning as defined in

Section 2827.</xhtml:p><xhtml:p>(2)<xhtml:span class="EnSpace"/>“Large electrical corporation” has the same meaning as defined in

Section 2827.</xhtml:p><xhtml:p>(3)<xhtml:span class="EnSpace"/>“Public school” means a school operated by a school district as described in

Section 41302.5 of the Education Code, a charter school that has been granted a charter pursuant to the Charter Schools Act of 1992 (Part 26.8 (commencing with

Section 47600) of Division of Title of the Education Code), or a public higher education entity as described in

Section of the Education Code.</xhtml:p><xhtml:p>(4)<xhtml:span class="EnSpace"/>“Renewable electrical generation facility” has the same meaning as in

Section 2827. </xhtml:p></caml:Content></caml:LawSectionVersion></caml:LawSection></caml:Fragment></caml:BillSection><caml:BillSection id="id_481FCDE4-2C53-41D4-BDAC-D84C39C40C8A"><caml:Num>SEC. 3.</caml:Num><caml:Content><xhtml:p>No reimbursement is required by this act pursuant to

Section of

Article XIII<xhtml:span class="ThinSpace"/>B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of

Section of the Government Code, or changes the definition of a crime within the meaning of

Section of

Article XIII<xhtml:span class="ThinSpace"/>B of the California Constitution.</xhtml:p></caml:Content></caml:BillSection>"?>