Public Utilities Commission: electrical corporations: wildfire victim restitution shortfalls: report: restitution mechanisms.

Assembly Member Hadwick was removed from the list of coauthors.

The bill title had a duplicated sentence ('An act to add Section 719.3...') which was corrected to a single statement.

The legislative counsel's digest was reorganized to eliminate a confusing repeated structure that described existing law, then the bill, then repeated existing law with a slightly different bill description. It is now a single clean narrative.

A duplicate second 'SECTION 1' at the end of the bill (containing a simpler, earlier-draft version of Section 719.3 without the detailed subsections) was removed, eliminating confusion about which version controlled.

Subsection (c)(1) was changed from 'In developing the restitution mechanisms, the commission shall ensure' to 'In developing the restitution mechanisms, mechanisms to be included in the report, the commission shall ensure,' clarifying that the mechanisms referenced are those to appear in the required report.

Subsection (d) was changed from 'the restitution mechanisms shall do all of the following' to 'the restitution mechanisms developed for the report shall do all of the following,' adding the same report-specific clarification.

New Section 1 adds legislative findings and declarations establishing that ultimate responsibility for wildfire victim restitution rests with the electrical corporation, that utility financial incentives should be aligned with public outcomes, and that restitution must be paid directly to victims and not used for attorney fees.

The bill now includes priority and expedited remedies for victims of wildfires occurring between January 1, 2015, and July 12, 2019, while still covering all pre-July 12, 2019 electrical corporation-caused wildfires.

New definitions added for 'Fire Victim Trust,' 'Full compensation' (with distinct definitions for PG&E bankruptcy cases versus other electrical corporation cases), 'Timely,' and 'Verified restitution shortfalls.'

New subdivision (c) requires the commission to ensure verified restitution shortfalls are consistently and fairly paid, that incremental payments are proportional where full immediate payment is not feasible, and that timelines and benchmarks for achieving full compensation are established.

New subdivision (d) requires a path to full restitution for PG&E 2015-2018 wildfire victims, a foundation for equitable restitution including the 2025 Eaton Fire if an electrical corporation is found responsible, and a framework to reduce administration costs and streamline victim restitution processes.

New subdivision (e) explicitly prohibits rate recovery for restitution payments and lists specific alternative mechanisms: deferred or reduced shareholder dividends, retained earnings or equity contributions, bonds or other debt mechanisms, access to existing wildfire-related financial structures, and other tools that preserve utility financial stability.

New subdivision (g) requires that the commission cannot implement restitution mechanisms unless explicitly authorized by statute, adding a legislative check on implementation.

New subdivision (f) clarifies that the section does not require taking of private property but establishes conditions on continued exercise of utility privileges including rate collection, capital market access, and operation under a certificate of public convenience and necessity.

The requirement that the commission generate a report recommending a decrease in the kilowatt-per-hour electricity rate by not less than 30 percent by January 1, 2028 was entirely removed.

The wildfire restitution shortfall assessment (for victims of wildfires caused by electrical corporations occurring before July 12, 2019) was retained but restructured from a secondary addition to the rate reduction mandate into the bill's primary and essentially sole substantive requirement.

All implementation requirements for the rate reduction were removed, including: reviewing public purpose programs for cost-effectiveness, considering suggestions from the CPUC Response to Executive Order No. N-5-24, auditing electrical corporation wildfire mitigation plan costs, and evaluating programs listed in Table A-2 of that response.

The new Public Utilities Code section was renumbered from Section 739.14 to Section 719.3, placing it immediately following Section 719 rather than in a different part of the code.

The bill author name was updated from 'Assembly Member Gallagher' to 'Assembly Member Gallagher Patterson.'

The bill now adds two sections to the Public Utilities Code (739.14 and 719.3) instead of one, broadening its structural footprint in the code.

Subdivision (c) of Section 739.14, which required the commission to include a restitution shortfall assessment within its rate reduction report, was removed from that section entirely.

A new Section 719.3 was added requiring the commission to generate a standalone report on verified restitution shortfalls for wildfire victims (from fires before July 12, 2019) by January 1, 2028, including recommendations for mechanisms to address those shortfalls without authorizing rate recovery.

The restitution shortfall reporting now has its own explicit deadline of January 1, 2028 as a standalone obligation, rather than being tied to the timing of the broader rate reduction report.

The amendment to Section 738.6 of the Public Utilities Code (a nonsubstantive change to air pollution compliance cost-recovery rules in federally designated nonattainment areas) was removed entirely from the bill.

New subdivision (c) requires the CPUC to include in its rate-reduction report an assessment of verified restitution shortfalls for victims of wildfires caused by electrical corporations that occurred before July 12, 2019, and to recommend mechanisms for those corporations to address the shortfalls so victims are fully and fairly compensated in a timely manner while supporting long-term rate stability.

The new subdivision (c) explicitly prohibits the commission's recommendations from including any measures that authorize rate recovery for restitution payments, meaning wildfire restitution costs cannot be passed on to ratepayers through rates.

Assembly Member Hadwick is added as a coauthor of the bill.

The fiscal committee designation changed from 'no' to 'yes,' indicating the bill now requires review by the Assembly Fiscal Committee, likely due to the new restitution-related provisions having potential fiscal impact.

New Section 739.14 requires the CPUC to generate a report with recommendations to decrease the kilowatt-per-hour electricity rate charged to ratepayers by not less than 30% by January 1, 2028.

The CPUC must review each public purpose program that is not cost effective and evaluate any program it has not yet evaluated for cost-effectiveness.

For the climate credit under Section 748.5, the CPUC must consider adopting suggestions from its February 18, 2025 response to Executive Order N-5-24.

The CPUC must evaluate each program listed in Table A-2 of its response to Executive Order N-5-24 for cost-effectiveness; for programs found not cost effective, the commission must eliminate them, reform them, or recommend action by the Legislature.

The CPUC must audit costs claimed by electrical corporations for implementing wildfire mitigation plans under Section 314.6 and recommend rate reductions if those costs are found unreasonable.

Fiscal committee review changed from 'no' to 'yes,' indicating the amended bill now has budgetary implications requiring fiscal analysis.