Public utilities: review of accounts: electrical and gas corporations: rates: political influence activities.

The bill no longer amends Section 314 of the Public Utilities Code. Instead, the inspection and discovery authority provisions previously in Section 314 are consolidated into Section 309.5(e)(1), which now states the Public Advocate's Office 'has the same authority as the commission to discover information and review the accounts of any entity regulated by the commission.'

Opposition to municipalization of electrical or gas utility service (including lobbying, engaging in city or county proceedings, and other activities to prevent a publicly owned municipal utility) was moved from a standalone prohibited item (former subdivision (b)(12)) into the definition of 'political influence activity' at subdivision (a)(6)(A)(ii). The practical effect is similar - utilities still cannot recover these costs - but it now operates through the existing prohibition on political influence activities in subdivision (b)(3) rather than as a separate category.

The deadline for the Public Advocate's Office to submit its annual report to the Legislature was changed from January 10 to February 1 of each year.

In Section 309.5(c), the condition for the commission's attorney fulfilling legal personnel requests was changed from 'provided if the office has sufficient moneys and positions' to simply 'if the office has sufficient moneys and positions,' removing the word 'provided.'

A new section amending Public Utilities Code Section 309.5 is added to the bill. This section formally establishes the structure, powers, funding, and accountability mechanisms of the Public Advocate's Office of the Public Utilities Commission.

The Public Advocate's Office is now explicitly authorized to compel the production or disclosure of any information it deems necessary from any entity regulated by the commission, both to perform its own duties and to support the commission's duties. It also has the same authority as the commission to discover information and review accounts of regulated entities.

A new 'Public Utilities Commission Public Advocate's Office Account' is created in the General Fund. Moneys are transferred from the existing 'Public Utilities Commission Utilities Reimbursement Account' via the annual Budget Act. The office must submit an annual staffing report comparing staffing levels across five-year periods.

The director of the Public Advocate's Office must annually appear before the appropriate policy committees of both the Assembly and Senate to report on the office's activities. The office must also provide annual reports to the fiscal committee chairpersons and the Joint Legislative Budget Committee detailing personnel years used, dollars expended and proposed, and workload standards.

The commission is required to develop procedures (including a code of conduct) to ensure the Public Advocate's Office does not create a conflict of roles, specifically that advocates on a case are not also advising decisionmakers on the same case.

Before issuing a report or pleading to the commission regarding alleged misconduct by a regulated entity, the Public Advocate's Office must meet and confer in good faith with that entity to attempt to reach agreement on the issues raised.

In Section 748.3(b)(5), references to 'utilities' (plural) are corrected to 'a utility' (singular) when describing payments to outside attorneys and experts in commission proceedings.

Standalone Section 748.4 was eliminated entirely. This section had provided a specific prohibition on recovering municipalization-opposition costs, its own set of definitions, a dedicated commission monitoring and investigation requirement, and an anti-avoidance rule preventing utilities from moving expenses to below-the-line accounts to hide them.

The municipalization opposition prohibition is now item (12) in subdivision (b) of Section 748.3, making it one of twelve categories of non-recoverable costs rather than a standalone statutory provision with its own enforcement mechanism.

The specific requirement that the commission monitor and investigate compliance with the municipalization prohibition (former 748.4(c)) was removed. The broader Section 748.3 has its own civil penalty and enforcement provisions that would now cover this category.

Minor drafting changes in Section 748.3: 'utilities' changed to 'a utility' in subdivision (b)(5) regarding outside attorney payments, and a likely typo introduced changing 'franchises of a utility' to 'franchise a franchise of a utility' in the political influence activity definition.

Bill authorship expanded from Senator McNerney alone to Senators McNerney and Wahab, with coauthors Senators Allen and Wiener and Assembly Members Berman, Ortega, and Ransom added.

All fusion energy data center provisions are deleted, including the requirement for the commission to initiate an agreement with the US Department of Energy to establish a fusion energy data center (former Section 25604 of the Public Resources Code) and the associated legislative findings about California's fusion economy.

A new comprehensive amendment to Section 748.3 of the Public Utilities Code is added, prohibiting utilities from recovering from ratepayers a broad list of 12 categories of costs: trade association dues supporting political activity, charitable giving, political influence activities, promotional advertising, outside attorney fees exceeding intervenor rates, political contributions, costs for unregulated products or services, penalties and fines, board liability insurance and travel expenses, aircraft for boards and officers, investor relations, and anti-municipalization activities.

The bill title and digest are updated to remove all references to fusion energy and the Public Resources Code, reflecting that the bill now focuses solely on public utility cost recovery and political influence restrictions under the Public Utilities Code.

New definitions are added in Section 748.3: 'covered business unit' (a division or department performing prohibited activities), 'promotional advertising' (communications that primarily build a utility's public image), 'utility affiliate' (subsidiary, parent, or sibling corporation), and 'vendor.'

The definition of 'political influence activity' exclusions in Section 748.3 adds a new exception not present in Section 748.4: activities that respond to a request by a legislative committee, the commission, or a government agency for technical information from the utility.

Utilities must clearly and conspicuously disclose in all public messages whether costs are paid by shareholders or ratepayers, consistent with candidate disclosure rules. For messages funded from above-the-line accounts, utilities must identify the funding source upon request in a general rate case.

Annual reporting is required starting May 31, 2026, including employee-level data (names, job titles, compensation, hours booked to above-the-line accounts) for covered business units, vendor logs, and detailed accounting of expenses in commission proceedings. The commission must make these reports publicly available.

The commission is given explicit authority to assess civil penalties against utilities that violate the cost-recovery prohibitions or fail to comply with commission orders implementing them, in addition to any disallowance or future adjustment.

The bill now amends Section 314 of and adds Section 748.4 to the Public Utilities Code, expanding its scope beyond fusion energy to cover utility ratepayer fund restrictions related to municipalization opposition.

The state-mandated local program designation changed from 'no' to 'no yes,' reflecting that the new provisions create a crime whose enforcement imposes costs on local agencies, though no reimbursement is required under Article XIII B of the California Constitution.

New Section 748.4 prohibits electrical or gas corporations from recording to above-the-line accounts (or otherwise recovering from ratepayers) direct or indirect costs of opposing municipalization, including lobbying, engaging in city or county political proceedings, and other political influence activities intended to undermine or prevent a publicly owned municipal utility.

New definitions added for 'above-the-line account,' 'below-the-line account,' 'compensation,' 'expense,' 'political influence activity,' 'public official,' and 'utility.' Political influence activity is broadly defined to cover activities influencing legislation, elections, franchise decisions, public opinion on rate setting, and decisions of public officials.

The commission is required to monitor and investigate compliance and noncompliance with the municipalization opposition prohibition. The Public Advocate's Office is granted the same authority to discover information and review utility accounts as the commission itself (new Section 314(c)).

An anti-evasion provision states that moving an expense from an above-the-line account to a below-the-line account after booking does not protect it from disclosure to the commission or in discovery requests.

A typo in the fusion energy data center section was corrected: 'ignition data and mechanisms fusion energy research data' was changed to 'fusion energy research data and mechanisms for outside entities to access fusion energy research data.'

A labor law exemption preserves the ability of utilities to record payments made pursuant to the National Labor Relations Act or the federal National Labor Management Cooperation Act of 1978 to above-the-line accounts.

Removed Section 1, which stated the Legislature's intent to enact subsequent legislation developing standards for nuclear fusion research data sharing. The bill no longer includes this forward-looking commitment to future data sharing standards legislation.

Criterion (g) of the new Section 25604 was expanded from requiring access to 'ignition data' to requiring access to 'ignition fusion energy research data,' broadening the category of data that outside entities must be able to access through the data center.

Corrected a typo in the legislative findings: 'United Sates' was changed to 'United States.'

New Section 25604 added to the Public Resources Code requiring the California Energy Commission to initiate an agreement with the US Department of Energy for a fusion energy data center. This transforms the bill from a non-binding intent statement into an actionable mandate on the commission.

Bill title changed from 'An act relating to energy' to 'An act to add Section 25604 to the Public Resources Code, relating to energy,' reflecting the new codified requirement.

Eight specific criteria for the fusion energy data center: (a) supercomputer access for public and private researchers, (b) data acceptance with established standards, (c) public data availability subject to security and IP protections, (d) location at an established fusion research site, (e) large dataset storage and management, (f) ample and scalable energy supply, (g) access to ignition data with mechanisms for outside entities, and (h) ability to leverage federal matching funds.

New legislative findings section establishing context: California's 100% clean energy target by 2045, fusion energy's potential as dispatchable baseload power without long-lasting nuclear waste, California hosting one-third of US fusion startups and supporting over 20,000 jobs, and the DOE Decadal Fusion Energy Strategy targeting a fusion pilot plant in the 2030s.

Fiscal committee review changed from 'no' to 'yes,' indicating the amendment introduces potential fiscal implications requiring committee analysis.