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.

This bill would require the commission, in any decision issued on or after January 1, 2028, determining an authorized return on equity, as defined, for an electrical corporation or gas corporation, to include specified information reflecting the commission’s independent analytical basis for making that determination, including, among other things, an identification of each financial model the commission relied upon in determining the authorized return on equity and an analysis of the relationship between the credit quality of the electrical corporation or gas corporation and the authorized return on equity. If, in any cost of capital proceeding, as defined, the commission adopts a methodology for determining the authorized return on equity that differs in any material respect from the methodology disclosed in the most recent prior decision in which the commission determined an authorized return on equity for the same electrical corporation or gas corporation, the bill would require the commission to identify each material departure from the prior methodology and provide a reasoned explanation for each material departure.

The bill would also require the commission to initiate a rulemaking proceeding to update its determinations of the cost of capital to conform with the requirements of the bill. The bill would require the proceeding to consider a long-term plan related to these requirements, as specified.

Existing law requires the commission to develop, publish, and annually update a report containing specified information, including the commission’s annual work plan and a summary of deenergization event trends, as specified. Existing law requires the commission to post the report in a conspicuous area of its internet website.

This bill would require the commission to include the analysis of the trends in the California corporation credit ratings described above in that annual report to the Legislature.

Under existing law, a violation of an order, decision, rule, direction, demand, or requirement of the commission is a crime.