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AB 2383

Electricity: data centers.

2025-2026 Regular Session Introduced by Rebecca Bauer-Kahan and 3 co-sponsors

Implements a new LEUF category with a separate rate schedule and mandated contracts for transmission, generation, and energizing costs starting 2027, pending CPUC approval.

Read second time and amended. Re-referred to Com. on APPR.
#electricity #datacenters
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Bill Summary · AB 2383

AB 2383 (2025-2026) – Electricity: large energy use facilities

What the bill aims to do

  • Establish a separate regulatory framework within the California Public Utilities Commission (CPUC) for retail electricity consumers classified as large energy use facilities (LEUFs).
  • Create a distinct rate schedule and contractual framework for LEUFs, separate from existing classifications for other commercial or industrial electricity customers.
  • Require certain long-term contracts and specific provisions governing transmission, generation, distribution, and energizing costs for LEUFs receiving service from an electrical corporation or a load-serving entity (LSE) starting in 2027.

Key provisions and changes

  1. New LEUF classification and rate schedule

    • The CPUC must, by January 1, 2028, proceed in a new or existing proceeding to classify LEUFs as a separate retail electricity customer category.
    • This LEUF classification would have its own dedicated rate schedule, distinct from other commercial/industrial service classifications.
    • If the CPUC has not approved a rate schedule for LEUFs by that date, an electrical corporation and the LEUF would not be required to use the LEUF classification, i.e., the new framework would not be mandatory until approval.

  2. Contractual requirements for service to LEUFs

    • The CPUC must require the electrical corporation or LSE providing service to an LEUF to enter into a contract with the LEUF.
    • The contract must cover:
      • Transmission, generation, or distribution of electricity service as applicable.
      • Cost of service and the cost of energizing the LEUF.
    • Contracts entered under this framework must meet specified requirements established by the CPUC (details not provided in the summary but to be defined in rulemaking).

  3. Effective date and applicability

    • These provisions apply to LEUFs that receive electricity service from an electrical corporation or an LSE on or after January 1, 2027.
    • The transition relies on CPUC action approving a dedicated LEUF rate schedule; otherwise, the LEUF-specific requirements can be delayed.

  4. Enforcement and penalties

    • Violations of the Public Utilities Act, CPUC orders, rules, or directives related to these provisions would be a crime.
    • Because the bill's provisions would be incorporated into the act, implementing actions by the CPUC could constitute state-imposed criminal penalties.

  5. State-mandated local program and reimbursement

    • The bill includes a state-mandated local program; however, it specifies that no reimbursement is required to local agencies or school districts for costs mandated by this act (per the California Constitution’s reimbursement provisions).

Who would be affected

  • Large energy use facilities (LEUFs): Entities designated as LEUFs would be subject to a new, separate rate schedule and the CPСU-imposed contract requirements for service.
  • Electrical corporations and load-serving entities (LSEs): These entities would be required to offer LEUFs service under the new framework, including entering into specific contracts that detail transmission, generation, distribution, and energizing costs.
  • CPUC: The commission would undertake a new or extended proceeding to establish LEUF classification, rate schedules, and contract standards, with associated enforcement responsibilities.

Procedural and timeline notes

  • The CPUC must publish a LEUF classification and rate schedule by January 1, 2028.
  • The LEUF framework would apply to service arrangements starting January 1, 2027, but full mandatory adoption hinges on CPUC approval of the LEUF rate schedule.
  • The bill has passed committee and is moving through the legislative process (as of the latest update, it received approval from the Committee with do-pass recommendations and is advancing to further readings).

Practical implications

  • The creation of a dedicated LEUF classification could tailor rates and contracts to the unique cost structure and reliability requirements of large energy-intensive facilities.
  • By mandating explicit contracts for transmission, generation, and energizing costs, LEUFs may gain clearer price transparency and longer-term price risk management, but could also face higher regulatory complexity and potential rate disparities relative to other commercial/industrial customers.
  • The bill emphasizes regulatory oversight, with criminal penalties for noncompliance, underscoring the state’s commitment to implementing the new framework if approved.

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

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