AB 1774 California Assembly · 2025-2026 Regular Session

Electrical corporations: wildfire mitigation plans: expenditures.

Summary

Existing law requires an electrical corporation to submit to the Office of Energy Infrastructure Safety a wildfire mitigation plan at least once every 4 years for review. Existing law requires the office to approve or deny each wildfire mitigation plan within 9 months of its submission. Existing law requires the Public Utilities Commission to assess a penalty on an electrical corporation that fails to substantially comply with its wildfire mitigation plan. Existing law prohibits a large electrical corporation from including in its equity rate base its share for the first $5,000,000,000 expended in aggregate by large electrical corporations on fire risk mitigation capital expenditure, as provided, and authorizes those expenditures to be financed through a financing order, as described. Existing law requires the commission, in addition to the $5,000,000,000, to prohibit a large electrical corporation from including in its equity rate base its share of the first $6,000,000,000 expended in aggregate by large electrical corporations on fire risk mitigation capital expenditures approved by the commission on or after January 1, 2026, and authorizes the electrical corporation's share of the fire risk mitigation capital expenditures and the debt financing cost of these fire risk mitigation capital expenditures to be financed through a financing order, as provided. This bill would require the commission, on or before June 30, 2027, to complete a one-time independent audit of all wildfire mitigation expenditures incurred by each electrical corporation between January 1, 2021, and January 1, 2027, as provided. The bill would require that the audit be conducted by an independent third-party auditor. The bill would require the commission, in the next appropriate proceeding following the audit, to consider the findings of the audit in determining the terms and conditions under which an electrical corporation's requested cost recovery may be authorized, as provided. The bill would require the commission to establish a schedule for conducting future independent audits of each electrical corporation's wildfire mitigation expenditures incurred during the preceding 4 calendar years. The bill would require the commission, pursuant to that schedule, to conduct an independent audit of an electrical corporation's prior wildfire mitigation expenditures before any proceeding in which the electrical corporation seeks to recover, collect, or expend ratepayer funds for wildfire mitigation programs, including, but not limited to, expenditures authorized pursuant to an approved wildfire mitigation plan. Under existing law, a violation of an order, decision, rule, direction, demand, or requirement of the commission is a crime. Because a violation of a commission action implementing the bill's requirements would be a crime, this 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.

Issues: ✓ Energy

Bill status in committee 1 of 4 stages cleared

Introduction

Feb 2026

Committee Review

Floor Vote

Governor

Introduced Feb 9, 2026 Last action May 14, 2026

Maddy AI version diff · 4 comparisons

What changed between versions

04/13/26 - Amended Assembly → AB1774 · 1 edit

MINOR

The diff between these two versions of AB 1774 reflects a change in document format from the legislative counsel's printed layout (with line numbers and page headers) to a web-published format (with navigation elements). The substantive bill text - which would add Section 8386.11 to the Public Utilities Code requiring independent audits of electrical corporations' wildfire mitigation expenditures before ratepayer cost recovery - appears unchanged between the two versions.

TECHNICAL

Document formatting changed from legislative counsel printed format (with line numbers, page headers, and column layout) to a web-published format with navigation menus and different text presentation. No substantive policy language was added, removed, or altered.

03/19/26 - Amended Assembly → 04/13/26 - Amended Assembly · 9 edits · Apr 13, 2026

MAJOR

AB 1774 was substantially expanded in this amendment to add a recurring audit schedule (covering the preceding four calendar years), require the commission to consider audit findings in cost recovery proceedings, set a hard deadline of December 31, 2027 for the one-time initial audit with a public explanation requirement if the June 30, 2027 deadline is missed, and add new transparency provisions including express findings when the commission departs from audit conclusions. Assembly Member Rogers was also added as a co-author.

Scope change

The bill's scope expanded from a one-time audit mechanism to an ongoing, recurring audit regime with a defined schedule, plus new procedural requirements tying audit findings directly to future cost recovery decisions. The application now covers all future ratepayer funding proceedings for wildfire mitigation, not just the initial audit period.

REQUIREMENT

New recurring audit schedule: the commission must establish a schedule for independent audits of each electrical corporation's wildfire mitigation expenditures from the preceding four calendar years, with no more than one audit per corporation per calendar year.

The commission must consider audit findings in the next appropriate proceeding when determining terms and conditions for an electrical corporation's requested cost recovery.

If the commission departs from the findings of the audit, it must make express findings explaining its basis for doing so.

The commission must conduct an independent audit before any proceeding in which an electrical corporation seeks to recover, collect, or expend ratepayer funds for wildfire mitigation programs.

Auditor independence requirements expanded to include compliance with applicable professional independence standards and conflict-of-interest standards, not just a prohibition on financial or contractual relationships.

ENFORCEMENT

If the commission determines based on the audit that an expenditure was unreasonable, imprudent, or improperly incurred (or records were insufficient), it must disallow that expenditure pursuant to Section 463, consistent with Section 747.

TIMELINE

The one-time initial audit (covering January 1, 2021 through January 1, 2027) now has a firm deadline of June 30, 2027, with a fallback: if the commission cannot meet that date, it must publish a written explanation and complete the audit by December 31, 2027.

TECHNICAL

New provision allowing the commission's auditor to use data from existing independent evaluator assessments or audits if feasible, while requiring that the full scope of information still be covered.

Recordkeeping authority (subdivision g) now explicitly cites Sections 701, 792, and 794 of the Public Utilities Code as the statutory basis for prescribing books, records, and accounting procedures.

02/09/26 - Introduced → 03/10/26 - Amended Assembly · 10 edits · Mar 10, 2026

MAJOR

The amendment adds an entirely new section (8386.11) to the Public Utilities Code requiring independent third-party audits of electrical corporations' wildfire mitigation expenditures before they can recover or spend ratepayer funds on new or ongoing programs. The audit must cover the preceding five calendar years and assess whether spending was reasonable, prudent, cost-effective, and properly allocated, with the commission empowered to disallow recovery, order refunds, or impose additional conditions if problems are found. A new Section 1 also states legislative intent to reduce utility rates by 25 percent.

REQUIREMENT

New Section 8386.11 requires the Public Utilities Commission to mandate an independent audit of an electrical corporation's wildfire mitigation expenditures before the corporation may recover, collect, or expend ratepayer funds for new or ongoing wildfire mitigation programs.

The audit must examine all wildfire mitigation expenditures from the preceding five calendar years and determine whether they were reasonable, prudent, cost-effective, used for authorized purposes, resulted in measurable risk reductions, and were not duplicative, excessive, misallocated, or improperly charged to ratepayers.

The audit must be conducted by an independent third-party auditor selected by the commission who has no financial or contractual relationship with the corporation being audited. The corporation may recover reasonable audit compliance costs only if it maintained records per commission requirements.

The commission must prescribe books, records, and accounting procedures for wildfire mitigation programs that support and enable the independent audit.

ENFORCEMENT

If the commission finds wildfire mitigation expenditures unreasonable, imprudent, or improperly incurred, it must disallow recovery from ratepayers, order refunds or bill credits, and may impose additional conditions, reporting requirements, or limitations on future wildfire mitigation funding.

If a corporation fails to prepare and maintain records sufficient to enable the audit, the commission shall disallow those expenses for rate-setting purposes. For pre-January 1, 2027 expenditures, similar disallowance applies if records are insufficient.

Audit reports and commission determinations under the new section are public records (except lawfully confidential information), and the commission must post audit findings on its website.

The bill now imposes a state-mandated local program (changed from 'no' to 'yes') because a violation of a commission action implementing the new requirements would be a crime under existing law.

SCOPE

New Section 1 states it is the intent of the Legislature to enact legislation that would reduce utility rates by 25 percent.

FISCAL

A no-reimbursement provision is added stating that no state reimbursement is required under Article XIII B of the California Constitution because any local agency costs arise only from the creation of a new crime or infraction.

Floor votes

How they voted

No floor votes recorded yet.

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

May 14, 2026

Lower · Passed

In committee: Held under submission.

lower

May 13, 2026

Committee

In committee: Set, first hearing. Referred to APPR. suspense file.

lower

Apr 14, 2026

Committee

Re-referred to Com. on APPR.

lower

Apr 13, 2026

Lower · Passed

Read second time and amended.

lower

Apr 9, 2026

Introduced

From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 13. Noes 0.) (April 8).

lower

Mar 23, 2026

Committee

Re-referred to Com. on U. & E.

lower

Mar 19, 2026

Introduced

From committee chair, with author's amendments: Amend, and re-refer to Com. on U. & E. Read second time and amended.

lower

Mar 11, 2026

Committee

Re-referred to Com. on U. & E.

lower

Mar 10, 2026

Introduced

From committee chair, with author's amendments: Amend, and re-refer to Com. on U. & E. Read second time and amended.

lower

Mar 9, 2026

Committee

Referred to Com. on U. & E.

lower

Feb 10, 2026

Lower · Passed

From printer. May be heard in committee March 12.

lower

1 primary · 3 co-sponsors