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AB 99

Electrical corporations: rates.

2025-2026 Regular Session Introduced by Tri Ta

AB 99 would require customer votes to approve systemwide rate increases above inflation for investor‑owned utilities, with a CPI cap unless safety/modernization or fuel costs apply

In committee: Held under submission.
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Bill Summary · AB 99

AB 99 (Ta.) — Summary: Electrical corporations: rates

Status: In committee — Held under submission (last action: 2025-05-23)
Introduced: January 8, 2025. Amended March 27–28, 2025. Referred to Assembly Appropriations; referred to suspense file and held under submission.

Purpose

AB 99 would amend the Public Utilities Code by adding Section 748.3 to limit when investor‑owned electrical corporations may propose, and the California Public Utilities Commission (CPUC) may approve, systemwide rate increases above the rate of inflation for a general rate case cycle. The bill requires customer approval by election for most above‑inflation increases, while preserving limited CPUC authority to authorize increases tied to safety/modernization or higher commodity/fuel costs.

Key provisions

  • Adds Section 748.3 to the Public Utilities Code.
  • Core prohibition: An electrical corporation may not propose (and the CPUC may not approve) a systemwide rate increase above the “rate of inflation” for any general rate case cycle.
    • “Rate of inflation” is defined as the annual increase in the California Consumer Price Index (CPI).
  • Customer election requirement for above‑inflation increases:
    • A proposed above‑inflation increase is allowed only if a majority of the electrical corporation’s voting customers approve it in an election.
    • Election rules include: one ballot per customer; the utility must provide information about the proposal; the CPUC may set additional procedures and rules.
    • Election costs must be paid exclusively by the utility’s shareholders.
    • The utility may submit multiple alternative rate plans and hold additional elections until a plan receives majority support.
    • The CPUC must set an interim rate plan (not exceeding the inflation rate) while awaiting election approval.
  • Exception: The CPUC may approve above‑inflation increases without a customer election if it finds the costs are directly related to safety enhancements and modernization or to higher commodity or fuel costs.
  • Enforcement/legal note: Because violations of CPUC orders are criminalized under existing law, the bill creates a state‑mandated local program; however, the bill asserts no state reimbursement is required under Article XIII B, Section 6 of the California Constitution for specified reasons.

Who is affected

  • Electrical corporations (investor‑owned utilities): constrained in proposing above‑inflation systemwide rate increases; liable for shareholder‑borne election costs; may conduct repeated elections.
  • Customers (residential and commercial): gain a direct vote on above‑inflation rate proposals; subject to interim increases up to CPI until an election concludes.
  • Shareholders: bear the cost of conducting elections and any financial effects of constrained rate adjustments.
  • CPUC: gains new procedural duties to establish election rules and interim rate plans; retains exception authority for safety/commodity reasons.
  • Local agencies/schools: referenced only regarding mandated‑cost/reimbursement treatment.

Procedural / timeline notes

  • Introduced Jan 8, 2025; printed Jan 9, 2025.
  • Referred to Assembly Committee on Utilities and Energy (Feb 3, 2025).
  • Amended and passed out of committee Mar 27, 2025; read second time and amended Mar 28, 2025.
  • Re‑referred to Appropriations (Apr 1, 2025); set for hearing and placed on suspense file in April.
  • Held under submission as of May 23, 2025.

Potential impacts and considerations

  • Would limit utilities’ routine ability to recover costs that drive rates above CPI without direct customer approval, potentially affecting utility revenue recovery and investment plans.
  • The safety/modernization and commodity/fuel exceptions preserve a mechanism for cost recovery in defined circumstances but may require CPUC determinations.
  • Election logistics (turnout, information quality, timing) could influence outcomes and create administrative burdens for utilities and the CPUC.
  • Requiring shareholders to fund elections shifts direct costs off ratepayers but could affect investor returns or utility finances.
  • Legal and enforcement dynamics: integrating customer elections into CPUC rate processes could raise procedural and constitutional questions (e.g., scope of regulatory authority, voting thresholds, clarity on “systemwide average,” and interaction with standard general rate case processes).

Compiled from official sources — confirm details with the bill’s official record.

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