AB 1975 California Assembly · 2025-2026 Regular Session

Electrical corporations: distribution grid utilization metric.

Summary

Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations. Existing law authorizes the commission to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable. This bill would require the commission, on or before December 31, 2027, to develop a methodology for calculating a distribution grid utilization metric, as specified. The bill would require each large electrical corporation, in a manner, frequency, and geographic scope determined by the commission, to submit a publicly available report to the commission with the results of the large electrical corporation's distribution grid utilization metric calculations, as specified. The bill would require the commission to establish and periodically update, as appropriate, a distribution grid utilization standard for each large electrical corporation and to ensure the distribution grid utilization standard encourages, and does not inhibit, electrification. The bill would authorize the commission to direct each large electrical corporation to implement programs, rate designs, or other incentives, or to establish financial performance-based incentives or disincentives correlated with achieving the distribution grid utilization standard, as specified. 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-described provisions would be part of the act and 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.

Bill status in committee 1 of 4 stages cleared

Introduction

Feb 2026

Committee Review

Floor Vote

Governor

Introduced Feb 13, 2026 Last action May 14, 2026

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What changed between versions

03/03/26 - Amended Assembly → 04/27/26 - Amended Assembly · 7 edits · Apr 27, 2026

MODERATE

The April 27 amendment to AB 1975 significantly narrows and softens the bill in several ways. It removes an entirely separate provision that would have required the Public Utilities Commission to consider anticipated maintenance costs when ordering the location of utility structures (Section 762.5). For the core grid utilization metric, it replaces mandatory annual minimum values with a more flexible 'standard' that the commission updates periodically as appropriate, changes the incentive mechanism from a requirement to an option, and adds conditions that must be met before performance-based incentives can be established.

Scope change

The bill's scope was reduced by removing the Section 762.5 amendment (utility structure location factors). Within the remaining grid utilization provisions, the commission was given substantially more discretion: the metric formula now includes a specific calculation but with commission-determined parameters, the minimum value requirement became a flexible standard, and the incentive mechanism changed from mandatory to permissive with additional preconditions.

SCOPE

The entire amendment to Section 762.5 of the Public Utilities Code was removed. That provision would have required the commission to consider 'anticipated maintenance costs' as a factor when making orders about the location of utility structures, in addition to existing factors like community values and environmental impact.

Legislative findings were softened with more hedging language. For example, 'directly impacts energy affordability' became 'can directly impact energy affordability,' 'distribution system expansion can be avoided' became 'may be avoided,' and 'reduces the average cost of the distribution rate, reducing electricity rates' became 'can reduce the average cost of the distribution services, which may help lower electricity rates.'

DEFINITION

The term 'grid utilization metric' was changed throughout to 'distribution grid utilization metric,' narrowing the focus specifically to distribution grids rather than the broader electrical grid.

REQUIREMENT

A specific formula for the metric was added: average electricity delivered over a distribution segment over a period of time divided by that segment's maximum electrical capacity, expressed as a percentage. The commission is given discretion to determine both the geographic scope of each distribution segment and the time period used.

The requirement that the commission 'annually establish a minimum value' that 'shall increase annually' was replaced with a requirement to 'establish and periodically update, as appropriate, a distribution grid utilization standard.' This removes the mandatory annual increase and gives the commission more flexibility in timing.

Quarterly reporting requirements were expanded. The commission now determines the manner, frequency, and geographic scope of reports. Reports must now include: the distribution grid utilization metric for each distribution segment, data on performance of programs intended to increase utilization, and data sufficient to identify opportunities to improve utilization and reduce distribution system costs.

ENFORCEMENT

The commission's obligation to 'establish financial performance-based incentives or disincentives' was changed to permissive language: the commission 'may direct each large electrical corporation to implement programs, rate designs, or other incentives, or may establish financial performance-based incentives or disincentives.' A new condition was added requiring that before any performance-based incentive can be established, a methodology must have been developed, utility performance must have been measured over a reasonable period, and the commission must be able to evaluate the impact of utility actions on utilization.

02/13/26 - Introduced → 03/03/26 - Amended Assembly · 8 edits · Mar 3, 2026

MODERATE

The amendment adds a substantial new section (762.6) to the Public Utilities Code requiring the CPUC to establish a grid utilization metric that measures electrical load as a percentage of rated capacity, with quarterly public reporting by large electrical corporations, annually increasing minimum thresholds, and financial incentives or disincentives tied to performance. The goal is to reduce distribution system expansion costs and lower electricity rates by encouraging utilities to use existing grid infrastructure more efficiently before building new capacity.

SCOPE

Adds an entirely new Section 762.6 to the Public Utilities Code creating a grid utilization metric framework for large electrical corporations, expanding the bill from a single amendment to a two-act bill.

REQUIREMENT

Requires the CPUC to establish a grid utilization metric by December 31, 2027, measuring electrical load as a percentage of rated capacity, calculated separately for peak and average load, and designed to work on individual distribution circuits and averaged across multiple circuits.

Requires each large electrical corporation to submit a publicly available quarterly report to the CPUC with grid utilization metric results at the level of individual distribution circuits, individual substations, and the entire service territory.

Requires the CPUC to annually establish a minimum value for the grid utilization metric within each large electrical corporation's distribution grid, with the minimum increasing annually at the commission's discretion. The process must encourage rather than inhibit electrification.

FISCAL

Requires the CPUC to establish financial performance-based incentives or disincentives correlated with achieving the grid utilization metric minimum value, provided they result in a net benefit for retail customers.

TIMELINE

Requires each large electrical corporation to propose grid utilization programs by July 31, 2028, which the CPUC may only approve if feasible and cost effective, considering rate impacts, reliability, maximizing existing infrastructure, and demand flexibility technologies.

DEFINITION

Defines 'large electrical corporation' by reference to Section 2827 of the Public Utilities Code.

TECHNICAL

Minor grammatical corrections to existing Section 762.5: removed redundant 'on,' before 'the following factors' and changed 'which that will be subject' to 'that will be subject.'

Floor votes

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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 28, 2026

Committee

Re-referred to Com. on APPR.

lower

Apr 27, 2026

Lower · Passed

Read second time and amended.

lower

Apr 23, 2026

Introduced

From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 16. Noes 0.) (April 22).

lower

Mar 4, 2026

Committee

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

lower

Mar 3, 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 2, 2026

Committee

Referred to Com. on U. & E.

lower

Feb 14, 2026

Lower · Passed

From printer. May be heard in committee March 16.

lower

1 primary · 0 co-sponsors