Bill Text: CA AB1167 | 2025-2026 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Electrical corporations and gas corporations: rate recovery: political activities and promotional advertising.

Sponsorship: Partisan Bill (Democrat 10)

Status: (Passed) 2025-10-11 - Chaptered by Secretary of State - Chapter 634, Statutes of 2025. [AB1167 Detail]

Download: California-2025-AB1167-Amended.html

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Amended  IN  Assembly  March 25, 2025

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Assembly Bill

No. 1167

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Introduced by Assembly Member Berman Members Berman and Addis
(Coauthors: Assembly Members Kalra, Schiavo, and Schultz)
(Coauthor: Senator Allen)

February 21, 2025

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An act to amend Section 451 of the Public Utilities Code, relating to public utilities. An act to add Section 748.3 to the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL'S DIGEST

AB 1167, as amended, Berman. Public utilities: rates. Electrical corporations and gas corporations: rate recovery: political activities and promotional advertising.

Existing law authorizes the Public Utilities Commission to fix the rates and charges for public utilities, including electrical corporations and gas corporations, and requires those rates and charges to be just and reasonable. Under existing law, a regulated public utility is prohibited from using ratepayer funds for advocacy-related activities that are political or do not otherwise benefit ratepayers.

This bill would prohibit, except as provided, an electrical corporation or gas corporation from recording various expenses associated with political influence activities, as defined, or with promotional advertising, as defined, to accounts that contain expenses that the electrical corporation or gas corporation recovers from ratepayers. The bill would require electrical corporations and gas corporations to clearly and conspicuously disclose in all of its advertising whether the costs of the advertising are paid for by the corporation’s shareholders or ratepayers. The bill would require an electrical corporation or gas corporation, on or before April 30, 2026, and annually thereafter, to provide the commission with a report of expenses from the previous calendar year and would require that, for each business unit of the corporation that performs work associated with political influence activities or promotional advertising, the report contain specified information. The bill would require the commission to make the report publicly available and would authorize the commission to redact information that the commission deems to be confidential in the report.

The bill would require the commission to assess a civil penalty against an electrical corporation or gas corporation that violates the prohibition described above, or that fails or neglects to comply with any part or provision of any order, decision, decree, rule, direction, demand, or requirement of the commission related to implementing the bill’s requirements, as provided.

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

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 provisions would be part of the act and a violation of a commission action implementing this 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 authorizes the Public Utilities 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 a public utility to furnish and maintain adequate, efficient, just, and reasonable service, instrumentalities, equipment, and facilities as are necessary to promote the safety, health, comfort, and convenience of its patrons, its employees, and the public.

This bill would make nonsubstantive changes to those requirements.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NOYES  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 This act shall be known, and may be cited, as the California Ratepayer Protection Act of 2025.

SEC. 2.

 (a) The Legislature finds and declares that energy bills for customers of California’s investor-owned utilities are increasingly unaffordable, particularly for low-income customers.

(b) It is the intent of the Legislature to protect the customers of California’s investor-owned utilities from funding those utilities’ political influence, promotional advertising, and other activities that are primarily for the benefit of utility shareholders.

SEC. 3.

 Section 748.3 is added to the Public Utilities Code, to read:

748.3.

 (a) For purposes of this section, all of the following definitions apply:

(1) “Above-the-line account” means an account that contains expenses that a utility recovers from ratepayers, including an account that contains expenses that the utility used to calculate a revenue requirement request in its general rate case.

(2) “Below-the-line account” means an account that contains expenses that a utility does not recover from ratepayers.

(3) “Compensation” means salary, a bonus, benefits, or other consideration of any value.

(4) “Covered business unit” means a division, department, or other organizational employee group within a utility that performs activities specified in subdivision (b).

(5) “Covered political influence employee” means an employee of a utility who conducts a political influence activity.

(6) “Expense” includes a payment to an external entity, a cost incurred by a parent company or corporate affiliate and invoiced to a utility, and compensation paid to an employee of a utility.

(7) (A) “Political influence activity” means either of the following:

(i) An activity for the purpose of directly or indirectly influencing any of the following:

(I) The adoption, repeal, or modification of federal, state, or local legislation, regulations, or ordinances.

(II) The election, recall, appointment, or removal of a public official or the adoption of initiatives or referenda.

(III) The approval, modification, or revocation of franchises of a utility.

(IV) Public opinion with respect to legislation, regulations, ordinances, elections, referenda, or rate setting of a utility.

(V) Decisions of federal, state, or local public officials.

(ii) Research, preparation, or any other activity undertaken to support any activities specified in clause (i).

(B) “Political influence activity” does not include either of the following:

(i) An activity that is directly and necessarily related to appearances before regulatory bodies in connection with the utility’s existing or proposed operations of the utility’s regulated system. Policies affecting demand for gaseous fuels or electricity are not directly and necessarily related to the utility’s existing or proposed operations.

(ii) An activity that is directly related to a commission-approved energy efficiency program or another commission-approved public purpose program if the participation of the utility has not otherwise been prohibited by the commission.

(8) (A) “Promotional advertising” means written, online, video, or audio communications that primarily build the public image of a utility, including communications about the undergrounding of electrical lines or other actions that a utility may take in the future.

(B) “Promotional advertising” does not include any of the following:

(i) Public messages that the utility is directed to publish by a federal, state, or local agency.

(ii) Public messages providing information on safety measures, emergency conditions, or service interruptions.

(iii) Public messages providing necessary information to customers about specific actions the customers can take for their safety.

(9) “Public official” means a decisionmaker within an administrative agency or legislative body at the local, state, or federal level, and the staff that support the decisionmaker’s policy development.

(10) “Utility” means an electrical corporation or gas corporation.

(11) “Utility affiliate” means an entity that is related to the utility as a subsidiary, parent, or sibling corporation, including by shareholding or other means of control.

(12) “Vendor” means a person or business that provides goods and services.

(b) Except as provided in subdivision (c), a utility shall not record to an above-the-line account direct or indirect costs of any of the following:

(1) Membership dues, sponsorships, or other contributions to an industry trade association, group, or related entity incorporated under Section 501 of the Internal Revenue Code of 1986, as amended, if any portion of those contributions support political influence activities or advertising. This paragraph does not apply to fees for professional licenses necessary for employee job duties.

(2) Charitable giving, including contributions to an organization that qualified under Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended.

(3) Political influence activities.

(4) Promotional advertising.

(5) Payments to outside attorneys or experts for work related to commission proceedings, including both the hourly rates and number of total hours devoted by each individual to relevant tasks, that exceed the amounts that would be permitted for rate recovery under the commission’s intervenor compensation program.

(6) Contributions to political candidates, political parties, campaign committees, issue committees, or independent expenditure committees, or other political expenses.

(7) Litigation regarding existing or proposed federal, state, or local regulations, legislation, or ordinances.

(8) A cost, including marketing, administration, or customer service, for products or services not regulated by the commission.

(9) Penalties or fines, including tax penalties or fines, issued against a utility.

(10) Board of directors and officers liability insurance, and travel, lodging, food, or beverage expenses for a utility’s board of directors and officers or the board of directors and officers of a utility affiliate.

(11) An owned, leased, or chartered aircraft for the utility’s board of directors and offices or the board of directors and officers of a utility affiliate.

(12) Investor relations.

(c) Subdivision (b) does not prohibit a utility from recording to an above-the-line account payments made pursuant to an agreement authorized by the National Labor Relations Act (29 U.S.C. Sec. 151 et seq.) or payments authorized by the federal National Labor Management Cooperation Act of 1978 (Pub. L. 95-524), and does not restrict any use permitted by federal law of moneys paid pursuant to those federal acts.

(d) (1) A utility shall clearly and conspicuously disclose in all of its advertising whether the costs of the advertising are being paid for by the utility’s shareholders or ratepayers.

(2) A disclosure is not clear and conspicuous if the disclosure is difficult to hear or read, or if the placement of the disclosure is easily overlooked.

(3) For an advertising recorded to an above-the-line account, the utility shall identify, in response to a public request, which expense or capital account is the source of the funding.

(e) (1) On or before April 30, 2026, and annually thereafter, each utility shall submit to the commission a report of expenses from the previous calendar year to ensure the utility’s compliance with this section. The report shall include, but not be limited to, all of the following:

(A) A list of covered business units of the utility. For each covered business unit, the report shall contain all of the following:

(i) A list of each employee’s name and job title.

(ii) A job description of each listed employee job title sufficient to describe the employee’s responsibilities.

(iii) The total annual compensation provided to each employee with a listed employee job title.

(iv) The number of hours booked to an above-the-line account for each employee with a listed employee job title.

(v) The percent of total annual compensation booked to an above-the-line account for each employee.

(B) To the extent the utility retains outside vendors to perform activities described in subdivision (b) and those vendors conduct any other work where the costs of the work are recorded to above-the-line accounts, the utility shall provide the Federal Energy Regulatory Commission Uniform System of Accounts number under which those costs are recorded and a log documenting the time, work performed, total cost incurred, and how those costs benefit ratepayers, and the reason those activities are not deemed to be activities for which the recovery through rates of those costs is prohibited pursuant to subdivision (b).

(C) A detailed accounting of expenses booked to an above-the-line account for participation in each commission proceeding for which the utility is a party, including employee compensation, and vendor and other expenses.

(2) The commission shall make all reports filed pursuant to paragraph (1) with the commission publicly available. The commission may redact information that the commission has determined to be necessary to protect confidential information, including any personally identifiable information that is not otherwise available to the public, in the reports made publicly available.

(f) The commission shall monitor and investigate compliance and noncompliance with this section. The Public Advocate’s Office of the Public Utilities Commission shall have the same authority to discover information and review utility accounts as the commission.

(g) Moving an expense to a below-the-line account after it was booked to an above-the-line account does not protect that expense from being disclosed.

(h) (1) In addition to any refunds that the commission orders a utility to pay ratepayers, the commission shall assess a civil penalty in accordance with paragraph (2) against a utility that violates subdivision (b) or fails or neglects to comply with any part or provision of any order, decision, decree, rule, direction, demand, or requirement of the commission implementing subdivision (b).

(2) (A) A utility that violates subdivision (b) or that fails or neglects to comply with any part or provision of any order, decision, decree, rule, direction, demand, or requirement of the commission implementing subdivision (b) is subject to a civil penalty of not less than one thousand dollars ($1,000) and not more than ten thousand dollars ($10,000) for each violation.

(B) For an expense for which a utility has improperly recorded to an above-the-line account in violation of subdivision (b), the utility shall have 30 days from the date on which the expense was initially recorded to the above-the-line account to record that expense to a below-the-line account. After the 30-day time period, each day the expense remains improperly recorded in an above-the-line account in violation of subdivision (b) constitutes a separate and distinct violation.

(i) Notwithstanding Section 2104, one-fourth of the moneys collected pursuant to any settlement or penalties collected for violations of subdivision (b) shall, upon appropriation by the Legislature, be used by the commission for purposes of increasing resources for the enforcement of this section.

SEC. 4.

 The Legislature finds and declares that Section 3 of this act, which adds Section 748.3 to the Public Utilities Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:

To preserve confidential information of an electrical corporation or gas corporation, including any personally identifiable information that is not otherwise available to the public to protect the privacy of individuals, it is necessary to limit the disclosure of certain information provided by the electrical corporation or gas corporation to the commission.

SEC. 5.

 No reimbursement is required by this act pursuant to Section 6 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 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.

SECTION 1.Section 451 of the Public Utilities Code is amended to read:

451.

(a)All charges demanded or received by a public utility, or by any two or more public utilities, for a product or commodity furnished or to be furnished or a service rendered or to be rendered shall be just and reasonable. Every unjust or unreasonable charge demanded or received for that product, commodity, or service is unlawful.

(b)Every public utility shall furnish and maintain adequate, efficient, just, and reasonable service, instrumentalities, equipment, and facilities, including telephone facilities, as defined in Section 54.1 of the Civil Code, as are necessary to promote the safety, health, comfort, and convenience of its patrons, its employees, and the public.

(c)All rules made by a public utility affecting or pertaining to its charges or service to the public shall be just and reasonable.