Investor-Owned Utilities Accountability Act.

New Section 25252 requires the research institute to complete a first phase of the comparative analysis by December 31, 2026, producing an interim report on threshold legal issues including legal parameters of each corporate form, current legal obligations of electrical corporations, legal barriers and pathways to transition, necessary changes in law, and recommendations for narrowing the scope of the remaining analysis.

The Energy Commission must convene a group of state attorneys from the legal departments of agencies that regulate electrical corporations (including PUC, CEC, ISO, ARB, OES, CAL FIRE, Attorney General, and Natural Resources Agency) to advise the research institute on the first phase legal analysis.

Removed the requirement that an electrical corporation must replace equipment or electrical lines identified by a third-party auditor as having reached end of life if located in a high fire-threat district within 5 years. The triennial audit requirement and PUC fine authority remain.

The PUC must provide any public nonconfidential data collected on residential gas and electrical service disconnections to the Office of Energy Infrastructure Safety for use in reviewing ratepayer affordability when assessing executive compensation under the safety certification provisions.

Safety certification requirements are expanded: the Office of Energy Infrastructure Safety must now approve an executive incentive compensation structure that is structured to promote safety as a priority, ensure public safety and utility financial stability with performance metrics, and ensure ratepayer affordability. Previously only required documentation to include specified dollar amounts.

Service disconnection data posting changes from a quarterly requirement to an annual requirement, with investor-owned electrical corporations and gas corporations required to post by March 1, 2026, and local publicly owned electric utilities by March 1, 2027.

The bill summary now references amending Section 718 of the Public Utilities Code (in addition to Section 706) and removes the reference to adding a new Section 706.5, indicating a shift in which statutory provisions are being amended.

Legislative findings are restructured into numbered sub-items and updated with new sourcing: rate comparisons now cite a January 2025 Legislative Analyst's Office report, wildfire liability language is softened from 'The IOUs have caused' to 'Investigations have concluded that IOUs have caused,' and the $21 billion wildfire fund is described as 'funded in part by ratepayers' rather than 'all passed onto ratepayer bills.' A new finding explains how IOU rates are set through general rate cases.

The separate 'historical energy justice assessment' component (formerly Section 25254) was entirely removed. This had required the study team to assess IOUs' historical impacts on communities, including health harms from wildfires, rate increases, disconnections, pollution, and liability.

The bill's scope was narrowed from all investor-owned utilities (IOUs), including gas corporations, to only 'electrical corporations' as defined in Section 218 of the Public Utilities Code (excluding electrical cooperatives). References to IOUs and gas utilities were replaced throughout.

The bill now also amends existing Sections 706 and 8389 of the Public Utilities Code (in addition to adding new sections), indicating additional regulatory provisions were added in the Assembly version.

The request-for-proposals process was eliminated. The Senate version required the Energy Commission to issue an RFP by March 31, 2026, select a study team by June 30, 2026, and impose detailed qualification requirements (income limits from IOUs, experience thresholds, conflict-of-interest safeguards). The Assembly version simply requires the commission to 'select a research institute.'

The formal advisory council requirement was removed. The Senate version required convening a 13-member council by December 31, 2026 with specific membership criteria, per diem compensation, and a role in reviewing all drafts. The Assembly version replaces this with a less formal provision allowing the commission, research institute, and disadvantaged communities advisory group to 'solicit input from stakeholders.'

A new provision requires that documentation related to compensation submitted for safety certification purposes include specified dollar amounts, adding transparency to executive pay disclosures tied to the PUC's safety certification process.

Several definitions were removed: 'clean energy investments, incentives, and ownership,' 'energy burden,' 'investor-owned utilities' or 'IOUs,' 'microgrid,' and 'study team.' A new definition of 'electrical corporation' was added. The 'research institute' definition was retained with examples including UCLA's Institute of the Environment and Sustainability, UC Berkeley's Goldman School, and Cal Poly San Luis Obispo.

The best value procurement model provision was modified from a general requirement to develop a model 'for consideration' to requiring its use 'in a new or existing proceeding' for procuring equipment and materials for electrical corporation infrastructure projects that compares costs and benefits of potential supplies.

Wildfire mitigation cost recovery language was clarified: only costs that the commission finds to be 'just and reasonable' may be recovered from ratepayers, replacing broader language about prohibiting recovery of undergrounding and covered conductor costs.

The study structure is fundamentally reorganized. Previously a single 'study team' conducted three components including an implementation plan. Now the comparative analysis of transitioning IOUs to a successor entity is assigned to a separate 'research institute' selected by the Energy Commission, with a $5 million cost cap and a January 1, 2029 deadline. The implementation plan component (Section 25257) appears removed from the study team's scope.

Amendments to Public Utilities Code Sections 3289 and 3292 and the addition of Section 748.7 are removed from the bill's scope, narrowing the codes affected by this legislation.

A new defined term 'research institute' is introduced to conduct the comparative analysis of transitioning IOUs to a public entity, nonprofit public benefit corporation, or mutual benefit corporation. This entity is distinct from the existing 'study team' definition.

The provision prohibiting electrical corporations from proposing compounded annual rate increases above CPI for residential customers (for PUC-approved rates) and limiting non-PUC-approved rate increases to one per year is entirely removed from the bill.

Shutoff protections are dramatically reduced. The old version prohibited disconnecting residential service for customers at or below 200% of the federal poverty line and for households with pregnant persons or those 0-12 weeks postpartum, required a citation/penalty program, and authorized court actions. The new version replaces these with a requirement for utilities to quarterly post information about terminations due to nonpayment on their websites.

The requirement for utilities to offer percentage-of-income payment plans to eligible residential customers is removed, along with the requirement for monthly data collection and submission to the PUC on terminations, reconnections, arrears, and payment plans.

The best value procurement model is narrowed in scope. Previously it applied to all electrical corporation infrastructure projects and required demonstrating the selected contractor was the best value. Now it applies only to equipment and materials for infrastructure projects and requires comparing costs and benefits of potential supplies.

The Wildfire Fund cost-shifting provision is removed. Previously the bill would have required the PUC to reduce the ratepayer charge to 5% of Wildfire Fund costs and require IOUs to contribute the remaining 95%. It also removed the definition of 'prudent' actions including annual audits, replacing end-of-life equipment, and deenergizing under threatening conditions.

The undergrounding cost recovery provision is significantly softened. The old version flatly prohibited recovering the cost of undergrounding, covered conductors, or other wildfire mitigation strategies from ratepayers. The new version only authorizes those costs that the PUC finds to be just and reasonable to be recovered from ratepayers.

The deadline for the Energy Commission to present the study/analysis at a publicly noticed business meeting is extended from September 30, 2028 to September 30, 2029.

References to the Office of Energy Infrastructure Safety are replaced with the PUC in several provisions, including the best value procurement model requirement, shifting regulatory responsibility back to the commission.

Third-party audit frequency for electrical corporation equipment and lines changed from annual to triennial (every three years), substantially reducing oversight frequency.

Post-emergency rebuild requirement changed from mandating undergrounding methods to requiring 'the most cost-effective wildfire mitigation strategies that conform to state and industry safety standards... including consideration of undergrounding and covered conductor methods.' Undergrounding is no longer the required method but merely one option to consider.

New requirement for the Office of Energy Infrastructure Safety to develop a best value procurement model for all electrical corporation infrastructure projects, and for each electrical corporation to demonstrate to the commission that the selected contractor is the best value contractor.

Equipment replacement requirement for items identified by auditors changed from applying to equipment in a 'high fire risk area' to a 'fire-threat district,' which may be a different or narrower geographic designation.

Audit completion and submission deadlines changed from fixed dates (June 30 completion, August 31 submission) to being 'in alignment with the wildfire mitigation plan cycle, as specified,' giving more scheduling flexibility.

The prohibition on recovering costs from ratepayers expanded from covering only undergrounding costs to also cover 'installing covered conductors, or other cost-effective wildfire mitigation strategies.'

New sections 748.7 and 8386.8 added to the Public Utilities Code, along with a new Article 4.5 (commencing with Section 570) in Chapter 3 of Part 1 of Division 1, expanding the bill's reach into additional areas of utility regulation.

Removed the provision requiring the PUC to annually allocate $100,000,000 of greenhouse gas allowance revenues to the Transformative Climate Communities Program and Community Resilience Center Program for fiscal years 2026 through 2036.

Changed the frequency of independent third-party audits of electrical corporation equipment from annual to triennial (every three years).

Added a requirement for utilities and community choice aggregators to quarterly post specified information concerning termination of service due to nonpayment on their respective internet websites.

Removed specific audit deadlines (June 30 completion, August 31 submission) and replaced them with a requirement that audits be completed in alignment with the wildfire mitigation plan cycle.

Changed the agency responsible for developing the best value procurement model from the Office of Energy Infrastructure Safety to the PUC, and added language that the model is 'for consideration in the procurement' rather than a direct requirement.

Changed the Energy Commission's action on the IOU transition study from a formal vote to approve by September 30, 2028, to presenting the study at a publicly noticed business meeting by that date.

Removed the requirement that all large electrical corporations must participate in the expedited utility distribution infrastructure undergrounding program (previously it only allowed participation).

Removed references to amending or adding Sections 748.5, 748.3, 8386.7, and 8388.5 from the bill's stated scope in the Public Utilities Code.

Changed terminology from 'high fire risk area' to 'high fire-threat district' for the geographic scope of equipment replacement requirements.