CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill
No. 947

Introduced by Senator Dodd

February 10, 2020

An act to add Sections 719 and 913.13 to the Public Utilities Code, relating to electricity.


LEGISLATIVE COUNSEL'S DIGEST


SB 947, as introduced, Dodd. Electrical corporations: financial performance-based incentives and performance-based metrics.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations. The California Constitution authorizes the commission, among other things, to establish its own procedures, subject to statute and due process, and to fix rates and establish rules for all public utilities, subject to control by the Legislature.
This bill would require the commission to evaluate financial performance-based incentives and performance-based metric tracking to identify mechanisms that may serve to better align electrical corporation operations, expenditures, and investments with public benefit goals, including safety, reliability, cost efficiency, and other state energy policies the commission believes may benefit from performance-based ratemaking. The bill would require the commission to report the results of the evaluation to the relevant policy and fiscal committees of the Legislature, as specified, by January 1, 2022.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 719 is added to the Public Utilities Code, to read:

719.
 The commission, in a public proceeding, shall evaluate financial performance-based incentives and performance-based metric tracking to identify mechanisms that may serve to better align electrical corporation operations, expenditures, and investments with public benefit goals, including safety, reliability, cost efficiency, and other state energy policies the commission believes may benefit from performance-based ratemaking. The evaluation shall consist of a review of existing and potential metrics, including future test years, and consideration of new performance-based incentives. The commission shall report its findings based upon the evaluation pursuant to Section 913.13.

SEC. 2.

 Section 913.13 is added to the Public Utilities Code, to read:

913.13.
 (a) By January 1, 2022, the commission shall report the results of its evaluation of financial performance-based incentives and performance-based metric tracking, undertaken pursuant to Section 719, to the relevant Senate and Assembly policy and fiscal committees.
(b) The report shall include all of the following:
(1) A general determination as to whether a transition to performance-based metrics regulation of electrical corporations would be net beneficial to the state, in terms of enhancing electrical grid safety, including the reduction of utility-caused wildfires and a reduction in the number, geographic scope, and duration of deenergization events, as well as meeting stated objectives of the commission and related statutory requirements.
(2) Actions that the commission may pursue to guide the change to a performance-based metrics regulation.
(3) Directives to be given to electrical corporations under a performance-based ratemaking model.
(4) A proposed timeline for transition to performance-based metrics.
(c) The report may include any recommendations of legislation needed to fully realize the benefits of performance-based metrics regulation, including identifying any existing statute that would serve as an impediment to realizing the full benefits of a transition to performance-based metrics regulation and recommending changes to those statutes.