Bill Text

Bill Information

PDF |Add To My Favorites |Track Bill | print page

AB-1513 Energy.(2019-2020)

SHARE THIS:share this bill in Facebookshare this bill in Twitter
Date Published: 10/02/2019 09:00 PM
AB1513:v94#DOCUMENT

Assembly Bill No. 1513
CHAPTER 396

An act to amend Sections 8899.70, 8899.72, 15470, 15471, 15473, 15474, 15475, 16480.45, and 20194.5 of the Government Code, to amend Sections 10089.6, 10089.7, and 11797 of the Insurance Code, to amend Sections 311, 326.1, 336, 371, 374, 379.5, 384, 394.25, 399.20, 451.1, 701.1, 714, 715, 740.3, 785, 850, 850.1, 854.2, 895, 1701.8, 1822, 2774.6, 2840.2, 2854, 3280, 3281, 3282, 3283, 3288, 3289, 3291, 3292, 3295, 3296, 3297, 8386.3, 8389, and 9607 of the Public Utilities Code, to amend Sections 80524, 80544, and 80550 of, to amend and renumber Sections 80502 and 80503 of, and to repeal Section 80500 of, the Water Code, and to amend Sections 1, 2, and 25 of Chapter 79 of the Statutes of 2019, relating to energy.

[ Approved by Governor  October 02, 2019. Filed with Secretary of State  October 02, 2019. ]

LEGISLATIVE COUNSEL'S DIGEST


AB 1513, Holden. Energy.
Existing law creates the California Catastrophe Response Council, establishes the California Wildfire Safety Advisory Board, establishes the Office of Energy Infrastructure Safety, and establishes the Wildfire Safety Division of the Public Utilities Commission. Existing law provides mechanisms for electrical corporations to recover costs and expenses arising from covered wildfires, as defined, establishes the Wildfire Fund to pay eligible claims arising from a covered wildfire, and requires each electrical corporation, local publicly owned electric utility, and electrical cooperative to annually prepare and submit a wildfire mitigation plan.
This bill would make nonsubstantive changes to provisions related to these entities, mechanisms, and requirements, and the Wildfire Fund.
Existing law provides for the financing of energy or water efficiency improvements through the issuance of Property Assessed Clean Energy (PACE) bonds that are secured by a voluntary contractual assessment on property or a special tax on property.
This bill would update references to the definition of PACE bonds.
The Public Utilities Code defines “Energy Commission” to mean the State Energy Resources Conservation and Development Commission for purposes of that code.
This bill would change existing references to the State Energy Resources Conservation and Development Commission or the California Energy Resources Conservation and Development Commission in the Public Utilities Code to Energy Commission.
This bill would incorporate additional changes to Section 8386.3 of the Public Utilities Code proposed by SB 247 to be operative only if this bill and SB 247 are enacted and this bill is enacted last.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 8899.70 of the Government Code is amended to read:

8899.70.
 (a) There is hereby created in state government the California Catastrophe Response Council to oversee the California Earthquake Authority to the extent provided in Section 10089.6 of the Insurance Code and the Wildfire Fund Administrator.
(b) The council shall consist of the following nine members.
(1) The Governor or the Governor’s designee.
(2) The Treasurer or the Treasurer’s designee.
(3) The Insurance Commissioner or the Insurance Commissioner’s designee.
(4) The Secretary of the Natural Resources Agency or the secretary’s designee.
(5) Three members of the public appointed by the Governor.
(6) A member appointed by the Senate Committee on Rules.
(7) A member appointed by the Speaker of the Assembly.
(c) The members appointed by the Senate Committee on Rules, the Speaker of the Assembly, and the three members appointed by the Governor shall have four-year staggered terms. The Governor’s initial appointees shall serve two-year terms.
(d) Until a majority of the council is appointed, the governing board of the California Earthquake Authority shall assume the authorities and duties of the council.

SEC. 2.

 Section 8899.72 of the Government Code is amended to read:

8899.72.
 The council shall appoint the Wildfire Fund Administrator and oversee the administrator’s operation, management, and administration of the Wildfire Fund created pursuant to Section 3284 of the Public Utilities Code. The administrator shall have relevant experience in claims administration, the management of claims trusts, or other relevant experience. Until the administrator is appointed, the California Earthquake Authority shall exercise the powers of the administrator.

SEC. 3.

 Section 15470 of the Government Code is amended to read:

15470.
 (a) The state has long recognized the critical nature of its energy and communication infrastructure, in its importance in driving the engine of the state’s prosperity, in the hardships placed on the state’s residents in the absence of the services the infrastructure provides, and in the devastation that can occur when the operators of the infrastructure lose operational control of the infrastructure. To ensure that the operations of energy and communication infrastructure within the state will be managed adequately, the Legislature finds and declares all of the following are necessary:
(1) To provide for a state office to be known and referred to as the Office of Energy Infrastructure Safety, within the Natural Resources Agency, and to prescribe the powers and duties of the director of that office.
(2) To provide for the coordination of functions among state entities with jurisdiction over other functions of the state’s energy and communication service providers.
(3) To authorize the establishment of organizations and the taking of actions necessary and proper to carry out the provisions of this part.
(b) It is further declared to be the purpose of this part and the policy of this state that all environmental, health, and safety functions of this state shall be coordinated as far as possible with the comparable functions of its political subdivisions, of the federal government, including its various departments and agencies, of other states, and of private agencies of every type, to the end that the most effective use may be made of all manpower, resources, and facilities in managing the environmental, health, and safety of energy and communication infrastructure in the state.

SEC. 4.

 Section 15471 of the Government Code is amended to read:

15471.
 This part shall be known and may be cited as the “California Energy Infrastructure Safety Act.”

SEC. 5.

 Section 15473 of the Government Code is amended to read:

15473.
 (a) There is in state government, within the Natural Resources Agency, the Office of Energy Infrastructure Safety. The office shall be under the supervision of the Director of the Office of Energy Infrastructure Safety, who shall have all rights and powers of a head of an office as provided by this code.
(b) The director shall be appointed by, and hold office at the pleasure of, the Governor. The appointment of the director is subject to confirmation by the Senate.
(1) The director shall receive an annual salary as set forth in Section 11552.
(2) The Governor may appoint a deputy director of the office. The deputy director shall hold office at the pleasure of the Governor.
(c) In carrying out the provisions of this part, the director may:
(1) Cooperate and contract with public and private agencies for the performance of acts, the rendition of services, and the affording of facilities as may be necessary and proper.
(2) Do other acts and things as may be necessary and incidental to the exercise of powers and the discharge of duties conferred or imposed by the provisions of this part.

SEC. 6.

 Section 15474 of the Government Code is amended to read:

15474.
 Nothing in this part shall operate to prevent the office from formally recognizing committees or boards established by, or with segments of, the private sector, public agencies, or both the private sector and public agencies, that control facilities, resources, or the provision of services essential to the operation of energy or communication infrastructure.

SEC. 7.

 Section 15475 of the Government Code is amended to read:

15475.
 The office is the successor to, and, effective July 1, 2021, is vested with, all of the duties, powers, and responsibilities of the Wildfire Safety Division established pursuant to Section 326 of the Public Utilities Code, including, but not limited to, the power to compel information and conduct investigations. All laws prescribing the duties, powers, and responsibilities of the Wildfire Safety Division to which the office succeeds, together with all lawful rules and regulations established under those laws, are expressly continued in force.

SEC. 8.

 Section 16480.45 of the Government Code is amended to read:

16480.45.
 In addition to any other investment authorized by this article, the Treasurer may invest in Property Assessed Clean Energy (PACE) bonds, as defined in Section 26054 of the Public Resources Code.

SEC. 9.

 Section 20194.5 of the Government Code is amended to read:

20194.5.
 In addition to the other investments authorized by this article, the board may invest in Property Assessed Clean Energy (PACE) bonds, as defined in Section 26054 of the Public Resources Code.

SEC. 10.

 Section 10089.6 of the Insurance Code is amended to read:

10089.6.
 (a) (1) There is hereby created the California Earthquake Authority, which shall be administered and governed by the governing board described in Section 10089.7 under the authority of the commissioner and overseen by the California Catastrophe Response Council solely with regard to any administrative or support services the authority may provide to, or for the benefit of, the Wildfire Fund created pursuant to Section 3284 of the Public Utilities Code or the Wildfire Fund Administrator appointed pursuant to Section 8899.72 of the Government Code. All other businesses or activities of the authority unrelated to the Wildfire Fund shall be governed solely by the board. The authority shall have the powers conferred by this chapter. The authority shall be authorized to transact insurance in this state as necessary to sell policies of basic residential earthquake insurance in the manner set forth in Sections 10089.26, 10089.27, and 10089.28. The authority shall have no authority to transact any other type of insurance business.
(2) The authority shall be authorized to exercise the powers of the Wildfire Fund Administrator as provided in Section 3281 of the Public Utilities Code until the appointment of the administrator by the council.
(b) (1) The investments of the authority shall be limited to those securities eligible under Section 16430 of the Government Code.
(2) The rights, obligations, and duties owed by the authority to its insureds, beneficiaries of insureds, and applicants for insurance shall be the same as the rights, obligations, and duties owed by insurers to its insureds, beneficiaries of insureds, and applicants for insurance under common law, regulations, and statutes. The authority shall be liable to its insureds, beneficiaries of insureds, and applicants for insurance as an insurer is liable to its insureds, beneficiaries of insureds, and applicants for insurance under common law, regulations, and statutes.
(c) The operating expenses of the authority shall be capped at not more than 6 percent of the premium income received by the authority. The funds shall be available to pay any advocacy fees awarded in a proceeding under subdivision (c) of Section 10089.11.
(d) For purposes of this section, the term “operating expenses of the authority” excludes solely the following:
(1) The costs of and transaction expenses associated with risk-transfer purchases, including the purchase of reinsurance and with capital-market contracts.
(2) The expense of securing and repaying bonds.
(3) The cost of repayment of bonds guaranteed, insured, or otherwise backed by any department or agency of the United States or of this state, or by any private entity.
(4) Payments to third parties for all of the following services provided to the authority:
(A) Investment.
(B) Loss-modeling.
(C) Legal services.
(5) Costs associated with the authority’s efforts to acquaint the public with and market authority products, promote earthquake preparedness, and earthquake-loss mitigation under the authority’s duly adopted strategic plan.
(6) Producer compensation.
(7) Participating insurer fees and reimbursement amounts arising under written contracts.
(8) Amounts paid by the authority to support research in seismic science and seismic engineering.
(9) Loans, grants, and expenses to support and maintain the authority’s earthquake loss-mitigation goals and programs, whether conducted by the authority alone or in collaboration with or by other persons.
(10) The costs of and loss-adjustment expenses associated with adjusting and paying policyholder claims for earthquake losses that are incurred by the authority under its earthquake insurance policies, including all costs and expenses associated with claim-related litigation, provided that all of those costs and expenses shall be reported to the Legislature in the manner required by subdivision (e) of Section 10089.13.
(11) Any cost incurred to provide administrative services and other support to or for the benefit of the Wildfire Fund created pursuant to Section 3284 of the Public Utilities Code, which cost shall be borne by the Wildfire Fund.
(e) The board may authorize the authority to contract with the Wildfire Fund created under Section 3284 of the Public Utilities Code to provide services and other support as the Wildfire Fund may require.

SEC. 11.

 Section 10089.7 of the Insurance Code is amended to read:

10089.7.
 (a) The authority shall be governed by a three-member governing board consisting of the Governor, the Treasurer, and the Insurance Commissioner, each of whom may name designees to serve as board members in their place. The Speaker of the Assembly and the Chairperson of the Senate Committee on Rules shall serve as nonvoting, ex officio members of the board, and may name designees to serve in their place.
(b) The board shall be advised by an advisory panel whose members shall be appointed by the Governor, except as provided in this subdivision. The advisory panel shall consist of four members who represent insurance companies that are licensed to transact fire insurance in the state, two of whom shall be appointed by the commissioner, two licensed insurance agents, one of whom shall be appointed by the commissioner, and three members of the public not connected with the insurance industry, at least one of whom shall be a consumer representative. In addition, the Speaker of the Assembly, and the Chairperson of the Senate Committee on Rules may each appoint one member of the public not connected with the insurance industry. Panel members shall serve for four-year terms, which may be staggered for administrative convenience, and panel members may be reappointed. The commissioner shall be a nonvoting, ex officio member of the panel and shall be entitled to attend all panel meetings, either in person or by representative.
(c) The board shall have the power to conduct the affairs of the authority and may perform all acts necessary or convenient in the exercise of that power. Without limitation, the board may: (1) employ or contract with officers and employees to administer the authority; (2) retain outside actuarial, geological, and other professionals; (3) enter into other obligations relating to the operation of the authority; (4) invest the moneys in the California Earthquake Authority Fund; (5) obtain reinsurance and financing for the authority as authorized by this chapter; (6) contract with participating insurers to service the policies of basic residential earthquake insurance issued by the authority; (7) issue bonds payable from and secured by a pledge of the authority of all or any part of the revenues of the authority to finance the activities authorized by this chapter and sell those bonds at public or private sale in the form and on those terms and conditions as the Treasurer shall approve; (8) pledge all or any part of the revenues of the authority to secure bonds and any repayment or reimbursement obligations of the authority to any provider of insurance or a guarantee of liquidity or credit facility entered into to provide for the payment of debt service on any bond of the authority; (9) employ and compensate bond counsel, financial consultants, and other advisers determined necessary by the Treasurer in connection with the issuance and sale of any bonds; (10) issue or obtain from any department or agency of the United States or of this state, or any private company, any insurance or guarantee of liquidity or credit facility determined to be appropriate by the Treasurer to provide for the payment of debt service on any bond of the authority; (11) engage the commissioner to collect revenues of the authority; (12) issue bonds to refund or purchase or otherwise acquire bonds on terms and conditions as the Treasurer shall approve; (13) exercise the powers of the California Catastrophe Response Council created in Section 8899.70 of the Government Code until a majority of the council members are appointed; and (14) perform all acts that relate to the function and purpose of the authority, whether or not specifically designated in this chapter.
(d) The authority shall reimburse board and panel members for their reasonable expenses incurred in attending meetings and conducting the business of the authority.
(e) (1) There shall be a limited civil immunity, and no criminal liability in a private capacity, on account of any act performed or omitted or obligation entered into in an official capacity, when done or omitted in good faith and without intent to defraud, on the part of the board, the panel, or any member of either, or on the part of any officer, employee, or agent of the authority. This provision shall not eliminate or reduce the responsibility of the authority under the covenant of good faith and fair dealing.
(2) In any claim against the authority based upon an earthquake policy issued by the authority, the authority shall be liable for any damages, including damages under Section 3294 of the Civil Code, for a breach of the covenant of good faith and fair dealing by the authority or its agents.
(3) In any claim based upon an earthquake policy issued by the authority, the participating carrier shall be liable for any damages for a breach of a common law, regulatory, or statutory duty as if it were a contracting insurer. The authority shall indemnify the participating carrier from any liability resulting from the authority’s actions or directives. The board shall not indemnify a participating carrier for any loss resulting from failure to comply with directives of the authority or from violating statutory, regulatory, or common law governing claims handling practices.
(4) A licensed insurer, its officers, directors, employees, or agents, shall not have any antitrust civil or criminal liability under the Cartwright Act (Part 2 (commencing with Section 16600) of Division 7 of the Business and Professions Code) by reason of its activities conducted in compliance with this chapter. Further, the California Earthquake Authority shall be deemed a joint arrangement established by statute to ensure the availability of insurance pursuant to subdivision (b) of Section 1861.03.
(5) Subject to Section 10089.21, this chapter shall not be construed to limit any exercise of the commissioner’s power, including enforcement and disciplinary actions, or the imposition of fines and orders to ensure compliance with this chapter, the rules and guidelines of the authority, or any other law or rule applicable to the business of insurance.
(6) Except as provided in paragraph (3) and by any other provision of this chapter, liability on the part of, and a cause of action, shall not be permitted in law or equity against, any participating insurer for any earthquake loss to property for which the authority has issued a policy unless the loss is covered by an insurance policy issued by the participating insurer. A policy issued by the authority shall not be deemed to be a policy issued by a participating insurer.
(f) The Attorney General, in the Attorney General’s discretion, shall provide a representative of the Attorney General’s office to attend and act as antitrust counsel at all meetings of the panel. The Attorney General shall be compensated for legal service rendered in the manner specified in Section 11044 of the Government Code.
(g) The authority may sue or be sued and may employ or contract with that staff and those professionals the board deems necessary for its efficient administration.
(h) (1) The authority may contract for the services of a chief executive officer, a chief financial officer, a chief mitigation officer, and an operations manager, and may contract for the services of reinsurance intermediaries, financial market underwriters, modeling firms, a computer firm, an actuary, an insurance claims consultant, counsel, and private money managers. These contracts shall not be subject to otherwise applicable provisions of the Government Code and the Public Contract Code and, for those purposes, the authority shall not be considered a state agency or other public entity. Other employees of the authority shall be subject to civil service provisions.
(2) When the authority hires multiple private money managers to manage the assets of the California Earthquake Authority Fund, other than the primary custodian of the securities, the authority shall consider small California-based firms who are qualified to manage the money in the fund. The purpose of this provision is to prevent the exclusion of small qualified investment firms solely because of their size.
(i) Members of the board and panel, and their designees, and the chief executive officer, the chief financial officer, the chief mitigation officer, and the operations manager of the authority shall be required to file financial disclosure statements with the Fair Political Practices Commission. The appointing authorities for members and designees of the board and panel shall, when making appointments, avoid appointing persons with conflicts of interest. Section 87406 of the Government Code, the Milton Marks Postgovernment Employment Restrictions Act of 1990, shall apply to the authority. Members of the board, the chief financial officer, the chief executive officer, the chief operations manager, the chief counsel, and any other person designated by the authority shall be deemed to be designated employees for the purpose of that act. In addition, no member of the board, nor the chief financial officer, the chief executive officer, the chief operations manager, and the chief counsel, shall, upon leaving the employment of the authority, seek, accept, or enter into employment or a consulting or other contractual arrangement for the period of one year with any employer or entity that entered into a participating agreement, or a reinsurance, bonding, letter of credit, or private capital markets contract with the authority during the time the employee was employed by the authority, which that member or employee had negotiated or approved, or participated in negotiating. A violation of these provisions shall be subject to enforcement pursuant to Chapter 11 (commencing with Section 91000) of Title 9 of the Government Code.
(j) The board shall establish the duties of, and give direction to, the chief mitigation officer, to support and enhance the authority’s appropriate efforts to create and maintain all of the following:
(1) Program activities that mitigate against seismic risks, for the benefit of homeowners, other property owners, including landlords with smaller holdings, and the general public of the state.
(2) Collaboration with academic institutions, nonprofit entities, and commercial business entities in joint efforts to conduct mitigation-related research and educational activities, and conduct program activities to mitigate against seismic risk.
(3) Programs to provide financial assistance in the form of loans, grants, credits, rebates, or other financial incentives to further efforts to mitigate against seismic risk, including, but not limited to, structural and contents retrofitting of residential structures.
(4) Collaborations and joint programs with subdivisions and programs of local, state, and federal governments and with other national programs that may further California’s disaster preparedness, protection, and mitigation goals.
(5) Other programs, support efforts, and activities deemed appropriate by the board to further the authority’s appropriate mitigation and mitigation-related goals.
(k) The authority may accept grants and gifts of property, real or personal, tangible and intangible, and services for the Earthquake Loss Mitigation Fund, established pursuant to Section 10089.37, or the related residential retrofit program from federal, state, and local government sources and private sources.
(l) The Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code) applies to meetings of the board and the panel.

SEC. 12.

 Section 11797 of the Insurance Code, as amended by Section 1 of Chapter 839 of the Statutes of 2012, is amended to read:

11797.
 (a) The board of directors shall cause all moneys in the State Compensation Insurance Fund that are in excess of current requirements to be invested and reinvested, from time to time, in the same manner as provided for private insurance carriers pursuant to Article 3 (commencing with Section 1170) and Article 4 (commencing with Section 1190) of Chapter 2 of Part 2 of Division 1, but excluding Sections 1191, 1191.1, 1191.5, 1192.2, 1192.4, 1192.6, 1192.7, 1192.9, 1192.95, 1192.10, 1194.7, 1194.8, 1194.81, 1194.82, 1194.85, 1198, and 1199. Notwithstanding the foregoing, the State Compensation Insurance Fund may invest or reinvest an aggregated maximum of 20 percent of moneys that are in excess of the admitted assets over the liabilities and required reserves in the investments allowed pursuant to Sections 1191, 1192.4, 1192.6, 1192.10, 1194.7, and 1198.
(b) (1) (A) Notwithstanding any other law, the State Compensation Insurance Fund may purchase general obligation bonds or other evidence of indebtedness issued by the state, including, but not limited to, warrants issued pursuant to Part 4 (commencing with Section 17000) of Division 4 of Title 2 of the Government Code or notes issued pursuant to Part 5 (commencing with Section 17300) of Division 4 of Title 2 of the Government Code, in any amount and to enter into purchase contracts with the state for this purpose.
(B) Notwithstanding any other law, the State Compensation Insurance Fund may purchase Property Assessed Clean Energy (PACE) bonds, as defined in Section 26054 of the Public Resources Code.
(2) The bonds or other evidence of indebtedness specified in paragraph (1), upon delivery to the State Compensation Insurance Fund, shall, for all purposes, be valid and binding obligations of the issuer thereof, be validly issued and outstanding in accordance with their stated terms, and not be deemed to be owned by or on behalf of the issuer thereof.
(c) The Department of Insurance shall submit to the Legislature by January 31, 2019, a report that assesses the benefit and risk of the State Compensation Insurance Fund’s equities investment history by measuring the volatility and total return of the State Compensation Insurance Fund’s investment portfolio with and without equities. The report shall be submitted pursuant to Section 9795 of the Government Code.
(d) This section shall remain in effect only until January 1, 2025, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2025, deletes or extends that date.

SEC. 13.

 Section 11797 of the Insurance Code, as added by Section 2 of Chapter 839 of the Statutes of 2012, is amended to read:

11797.
 (a) The board of directors shall cause all moneys in the State Compensation Insurance Fund that are in excess of current requirements to be invested and reinvested, from time to time, in the same manner as provided for private insurance carriers pursuant to Article 3 (commencing with Section 1170) and Article 4 (commencing with Section 1190) of Chapter 2 of Part 2 of Division 1, but excluding Sections 1191, 1191.1, 1191.5, 1192.2, 1192.4, 1192.6, 1192.7, 1192.9, 1192.95, 1192.10, 1194.7, 1194.8, 1194.81, 1194.82, 1194.85, 1198, and 1199.
(b) (1) (A) Notwithstanding any other law, the State Compensation Insurance Fund may purchase general obligation bonds or other evidence of indebtedness issued by the state, including, but not limited to, notes issued pursuant to Part 5 (commencing with Section 17300) of Division 4 of Title 2 of the Government Code or warrants issued pursuant to Part 4 (commencing with Section 17000) of Division 4 of Title 2 of the Government Code, in any amount and to enter into purchase contracts with the state for this purpose.
(B) Notwithstanding any other law, the State Compensation Insurance Fund may purchase Property Assessed Clean Energy (PACE) bonds, as defined in Section 26054 of the Public Resources Code.
(2) The bonds or other evidence of indebtedness specified in paragraph (1), upon delivery to the State Compensation Insurance Fund, shall, for all purposes, be valid and binding obligations of the issuer thereof, be validly issued and outstanding in accordance with their stated terms, and not be deemed to be owned by or on behalf of the issuer thereof.
(c) This section shall become operative on January 1, 2025.

SEC. 14.

 Section 311 of the Public Utilities Code is amended to read:

311.
 (a) The commission, each commissioner, the executive director, and the assistant executive directors may administer oaths, certify to all official acts, and issue subpoenas for the attendance of witnesses and the production of papers, waybills, books, accounts, documents, and testimony in any inquiry, investigation, hearing, or proceeding in any part of the state.
(b) The administrative law judges may administer oaths, examine witnesses, issue subpoenas, and receive evidence, under rules that the commission adopts.
(c) The evidence in any hearing shall be taken by the commissioner or the administrative law judge designated for that purpose. The commissioner or the administrative law judge may receive and exclude evidence offered in the hearing in accordance with the rules of practice and procedure of the commission.
(d) Consistent with the procedures contained in Sections 1701.1, 1701.2, 1701.3, 1701.4, and 1701.8, the assigned commissioner or the administrative law judge shall prepare and file an opinion setting forth recommendations, findings, and conclusions. The opinion of the assigned commissioner or the administrative law judge is the proposed decision and a part of the public record in the proceeding. The proposed decision of the assigned commissioner or the administrative law judge shall be filed with the commission and served upon all parties to the action or proceeding without undue delay, not later than 90 days after the matter has been submitted for decision. The commission shall issue its decision not sooner than 30 days following filing and service of the proposed decision by the assigned commissioner or the administrative law judge, except that the 30-day period may be reduced or waived by the commission in an unforeseen emergency situation or upon the stipulation of all parties to the proceeding or as otherwise provided by law. The commission may, in issuing its decision, adopt, modify, or set aside the proposed decision or any part of the decision. Where the modification is of a decision in an adjudicatory hearing it shall be based upon the evidence in the record. Every finding, opinion, and order made in the proposed decision and approved or confirmed by the commission shall, upon that approval or confirmation, be the finding, opinion, and order of the commission.
(e) Any item appearing on the commission’s public agenda as an alternate item to a proposed decision or to a decision subject to subdivision (g) shall be served upon all parties to the proceeding without undue delay and shall be subject to public review and comment before it may be voted upon. For purposes of this subdivision, “alternate” means either a substantive revision to a proposed decision that materially changes the resolution of a contested issue or any substantive addition to the findings of fact, conclusions of law, or ordering paragraphs. The commission shall adopt rules that provide for the time and manner of review and comment and the rescheduling of the item on a subsequent public agenda, except that the item may not be rescheduled for consideration sooner than 30 days following service of the alternate item upon all parties. The alternate item shall be accompanied by a digest that clearly explains the substantive revisions to the proposed decision. The commission’s rules may provide that the time and manner of review and comment on an alternate item may be reduced or waived by the commission in an unforeseen emergency situation.
(f) The commission may specify that the administrative law judge assigned to a proceeding involving an electrical, gas, telephone, railroad, or water corporation, or a highway carrier, initiated by customer or subscriber complaint need not prepare, file, and serve an opinion, unless the commission finds that to do so is required in the public interest in a particular case.
(g) (1)  Before voting on any commission decision not subject to subdivision (d), the decision shall be served on parties and subject to at least 30 days public review and comment. Any alternate to any commission decision shall be subject to the same requirements as provided for alternate decisions under subdivision (e). For purposes of this subdivision, “decision” also includes resolutions, including resolutions on advice letter filings.
(2) The 30-day period may be reduced or waived in an unforeseen emergency situation, upon the stipulation of all parties in the proceeding, for an uncontested matter in which the decision grants the relief requested, or for an order seeking temporary injunctive relief, or, in the case of a catastrophic wildfire proceeding, may be reduced to no less than 15 days at the discretion of the assigned commissioner.
(3) This subdivision does not apply to uncontested matters that pertain solely to water corporations, or to orders instituting investigations or rulemakings, categorization resolutions under Sections 1701.1 to 1701.4, inclusive, and Section 1701.8, or orders authorized by law to be considered in executive session. Consistent with regulatory efficiency and the need for adequate prior notice and comment on commission decisions, the commission may adopt rules, after notice and comment, establishing additional categories of decisions subject to waiver or reduction of the time period in this section.
(h) Notwithstanding any other provision of law, amendments, revisions, or modifications by the commission of its Rules of Practice and Procedure shall be submitted to the Office of Administrative Law for prior review in accordance with Sections 11349, 11349.3, 11349.4, 11349.5, 11349.6, and 11350.3 of, and subdivisions (a) and (b) of Section 11349.1 of, the Government Code. If the commission adopts an emergency revision to its Rules of Practice and Procedure based upon a finding that the revision is necessary for the preservation of the public peace, health and safety, or general welfare, this emergency revision shall only be reviewed by the Office of Administrative Law in accordance with subdivisions (b) to (d), inclusive, of Section 11349.6 of the Government Code. The emergency revision shall become effective upon filing with the Secretary of State and shall remain in effect for no more than 120 days. A petition for writ of review pursuant to Section 1756 of a commission decision amending, revising, or modifying its Rules of Practice and Procedure shall not be filed until the regulation has been approved by the Office of Administrative Law, the Governor, or a court pursuant to Section 11350.3 of the Government Code. If the period for filing the petition for writ of review would otherwise have already commenced under Section 1733 or 1756 at the time of that approval, then the period for filing the petition for writ of review shall continue until 30 days after the date of that approval. Nothing in this subdivision shall require the commission to comply with Article 5 (commencing with Section 11346) of Chapter 3.5 of Part 1 of Division 3 of Title 2 of the Government Code. This subdivision is only intended to provide for the Office of Administrative Law review of procedural commission decisions relating to commission Rules of Practice and Procedure, and not general orders, resolutions, or other substantive regulations.
(i) The commission shall immediately notify the Legislature whenever the commission reduces or waives the time period for public review and comment due to an unforeseen emergency situation, as provided in subdivision (d), (e), or (g).

SEC. 15.

 Section 326.1 of the Public Utilities Code is amended to read:

326.1.
 (a) There is hereby established the California Wildfire Safety Advisory Board. The board shall advise the Wildfire Safety Division established pursuant to Section 326.
(b) The board shall consist of seven members. Five members shall be appointed by the Governor, one member shall be appointed by the Speaker of the Assembly, and one member shall be appointed by the Senate Committee on Rules. The members of the board shall serve four-year staggered terms. The initial members of the board shall be appointed by January 1, 2020. The Governor shall designate three of the initial members who shall serve two-year terms. Members of the board shall be selected from industry experts, academics, and persons with labor and workforce safety experience or other relevant qualifications and shall represent a cross-section of relevant expertise including, at all times, at least three members experienced in the safe operation, design, and engineering of electrical infrastructure.
(c) The board shall meet at least quarterly and alternate meeting locations between northern, central, and southern California, when feasible.
(d) Members of the board who are not salaried state service employees shall be eligible for reasonable compensation, not to exceed a per diem of four hundred dollars ($400), for attendance at board meetings.
(e) All reasonable costs incurred by the board, including staffing, travel at state travel reimbursement rates, and administrative costs, shall be reimbursed through the Public Utilities Commission Utilities Reimbursement Account provided for in Section 402 and shall be part of the budget of the commission. The commission shall consult with the board in the preparation of this portion of the commission’s proposed annual budget.
(f) Communications by the board, its staff, and individual members of the board are not subject to the commission’s ex parte rules set forth in Article 1 (commencing with Section 1701) of Chapter 9.

SEC. 16.

 Section 336 of the Public Utilities Code is amended to read:

336.
 (a) The five-member Oversight Board shall be comprised as follows:
(1) Three members, who are California residents and electricity ratepayers, appointed by the Governor from a list jointly provided by the Energy Commission and the Public Utilities Commission, and subject to confirmation by the Senate.
(2) One member of the Assembly appointed by the Speaker of the Assembly.
(3) One member of the Senate appointed by the Senate Committee on Rules.
(b) Legislative members shall be nonvoting members, however, they are otherwise full members of the board with all rights and privileges pertaining thereto.
(c) Oversight Board members shall serve three-year terms with no limit on reappointment. For purposes of the initial appointments set forth in paragraph (1), the Governor shall appoint one member to a one-year term, one to a two-year term, and one to a three-year term.
(d) The Governor shall designate one of the voting members as the chairperson of the Oversight Board who shall preside over meetings and direct the executive director in the routine administration of the Oversight Board’s business. The chairperson may designate one of the other voting members to preside over meetings in the absence of the chairperson.
(e) Two voting members shall constitute a quorum. Any decision or action of the Oversight Board shall be by majority vote of the voting members.
(f) The members of the Oversight Board shall serve without compensation, but shall be reimbursed for all necessary expenses incurred in the performance of their duties.

SEC. 17.

 Section 371 of the Public Utilities Code is amended to read:

371.
 (a) Except as provided in Sections 372 and 374, the uneconomic costs provided in Sections 367, 368, 375, and 376 shall be applied to each customer based on the amount of electricity purchased by the customer from an electrical corporation or alternate supplier of electricity, subject to changes in usage occurring in the normal course of business.
(b) Changes in usage occurring in the normal course of business are those resulting from changes in business cycles, termination of operations, departure from the utility service territory, weather, reduced production, modifications to production equipment or operations, changes in production or manufacturing processes, fuel switching, including installation of fuel cells pending a contrary determination by the Energy Commission, enhancement or increased efficiency of equipment or performance of existing self-cogeneration equipment, replacement of existing cogeneration equipment with new power generation equipment of similar size as described in paragraph (1) of subdivision (a) of Section 372, installation of demand-side management equipment or facilities, energy conservation efforts, or other similar factors.
(c) Nothing in this section shall be interpreted to exempt or alter the obligation of a customer to comply with Chapter 5 (commencing with Section 119075) of Part 15 of Division 104 of the Health and Safety Code. Nothing in this section shall be construed as a limitation on the ability of residential customers to alter their pattern of electricity purchases by activities on the customer side of the meter.

SEC. 18.

 Section 374 of the Public Utilities Code is amended to read:

374.
 (a) In recognition of statutory authority and past investments existing as of December 20, 1995, and subject to the firewall specified in subdivision (e) of Section 367, the obligation to pay the uneconomic costs identified in Sections 367, 368, 375, and 376 shall not apply to the following:
(1) One hundred ten megawatts of load served by irrigation districts, as hereafter allocated by this paragraph:
(A) The 110 megawatts of load shall be allocated among the service territories of the three largest electrical corporations in the ratio of the number of irrigation districts in the service territory of each utility to the total number of irrigation districts in the service territories of all three utilities.
(B) The total amount of load allocated to each utility service area shall be phased in over five years beginning January 1, 1997, so that one-fifth of the allocation is allocated in each of the five years. Any allocation that remains unused at the end of any year shall be carried over to the succeeding year and added to the allocation for that year.
(C) The load allocated to each utility service territory pursuant to subparagraph (A) shall be further allocated among the respective irrigation districts within that service territory by the Energy Commission. An individual irrigation district requesting an allocation shall submit to the commission by January 31, 1997, detailed plans that show the load that it serves or will serve and for which it intends to use the allocation within the timeframe requested. These plans shall include specific information on the irrigation districts’ organization for electric distribution, contracts, financing and engineering plans for capital facilities, as well as detailed information about the loads to be served, and shall not be less than eight megawatts or more than 40 megawatts, provided, however, that any portion of the 110 megawatts that remains unallocated may be reallocated to projects without regard to the 40 megawatts limitation. In making an allocation among irrigation districts, the Energy Commission shall assess the viability of each submission and whether it can be accomplished in the timeframe proposed. The Energy Commission shall have the discretion to allocate the load covered by this section in a manner that best ensures its usage within the allocation period.
(D) At least 50 percent of each year’s allocation to a district shall be applied to that portion of load that is used to power pumps for agricultural purposes.
(E) Any load pursuant to this subdivision shall be served by distribution facilities owned by, or leased to, the district in question.
(F) Any load allocated pursuant to this paragraph shall be located within the boundaries of the affected irrigation district, or within the boundaries specified in an applicable service territory boundary agreement between an electrical corporation and the affected irrigation district. The provisions of subparagraph (C) of this paragraph shall be applicable to any load within the County of Stanislaus or San Joaquin, or both, served by any irrigation district that is currently serving or will be serving retail customers.
(2) Seventy-five megawatts of load served by the Merced Irrigation District hereafter prescribed in this paragraph:
(A) The total allocation provided by this paragraph shall be phased in over five years beginning January 1, 1997, so that one-fifth of the allocation is received in each of the five years. Any allocation that remains unused at the end of any year shall be carried over to the succeeding year and added to the allocation for that year.
(B) Any load to which the provision of this paragraph is applicable shall be served by distribution facilities owned by, or leased to, Merced Irrigation District.
(C) A load to which the provisions of this paragraph are applicable shall be located within the boundaries of Merced Irrigation District as those boundaries existed on December 20, 1995, together with the territory of Castle Air Force Base that was located outside of the district on that date.
(D) The total allocation provided by this paragraph shall be phased in over five years beginning January 1, 1997, with the exception of load already being served by the district as of June 1, 1996, which shall be deducted from the total allocation and shall not be subject to the costs provided in Sections 367, 368, 375, and 376.
(3) To loads served by irrigation districts, water districts, water storage districts, municipal utility districts, and other water agencies that, on December 20, 1995, were members of the Southern San Joaquin Valley Power Authority, or the Eastside Power Authority, provided, however, that this paragraph shall be applicable only to that portion of each district or agency’s load that is used to power pumps that are owned by that district or agency as of December 20, 1995, or replacements thereof, and is being used to pump water for district purposes. The rates applicable to these districts and agencies shall be adjusted as of January 1, 1997.
(4) The provisions of this subdivision shall no longer be operative after March 31, 2002.
(5) The provisions of paragraph (1) shall not be applicable to any irrigation district, water district, or water agency described in paragraph (2) or (3).
(6) Transmission services provided to any irrigation district described in paragraph (1) or (2) shall be provided pursuant to otherwise applicable tariffs.
(7) Nothing in this chapter shall be deemed to grant the commission any jurisdiction over irrigation districts not already granted to the commission by existing law.
(b) To give the full effect to the legislative intent in enacting Section 701.8, the costs provided in Sections 367, 368, 375, and 376 shall not apply to the load served by preference power purchased from a federal power marketing agency, or its successor, pursuant to Section 701.8 as it existed on January 1, 1996, provided that the power is used solely for the customer’s own systems load and not for sale. The costs of this provision shall be borne by all ratepayers in the affected service territory, notwithstanding the firewall established in subdivision (e) of Section 367.
(c) To give effect to an existing relationship, the obligation to pay the uneconomic costs specified in Sections 367, 368, 375, and 376 shall not apply to that portion of the load of the University of California campus situated in the County of Yolo that was being served as of May 31, 1996, by preference power purchased from a federal marketing agency, or its successor, provided that the power is used solely for the facility load of that campus and not, directly or indirectly, for sale.

SEC. 19.

 Section 379.5 of the Public Utilities Code is amended to read:

379.5.
 Notwithstanding any other provision of law, on or before March 7, 2001, the commission, in consultation with the Independent System Operator, shall take all of the following actions, and shall include the reasonable costs involved in taking those actions in the distribution revenue requirements of utilities regulated by the commission, as appropriate:
(a) (1) Identify and undertake those actions necessary to reduce or remove constraints on the state’s existing electrical transmission and distribution system, including, but not limited to, reconductoring of transmission lines, the addition of capacitors to increase voltage, the reinforcement of existing transmission capacity, and the installation of new transformer banks. The commission shall, in consultation with the Independent System Operator, give first priority to those geographical regions where congestion reduces or impedes electrical transmission and supply.
(2) Consistent with the existing statutory authority of the commission, afford electrical corporations a reasonable opportunity to fully recover costs it determines are reasonable and prudent to plan, finance, construct, operate, and maintain any facilities under its jurisdiction required by this section.
(b) In consultation with the Energy Commission, adopt energy conservation demand-side management and other initiatives in order to reduce demand for electricity and reduce load during peak demand periods. Those initiatives shall include, but not be limited to, all of the following:
(1) Expansion and acceleration of residential and commercial weatherization programs.
(2) Expansion and acceleration of programs to inspect and improve the operating efficiency of heating, ventilation, and air-conditioning equipment in new and existing buildings, to ensure that these systems achieve the maximum feasible cost-effective energy efficiency.
(3) Expansion and acceleration of programs to improve energy efficiency in new buildings, in order to achieve the maximum feasible reductions in uneconomic energy and peak electricity consumption.
(4) Incentives to equip commercial buildings with the capacity to automatically shut down or dim nonessential lighting and incrementally raise thermostats during a peak electricity demand period.
(5) Evaluation of installing local infrastructure to link temperature setback thermostats to real-time price signals.
(6) Incentives for load control and distributed generation to be paid for enhancing reliability.
(7) Differential incentives for renewable or super clean distributed generation resources pursuant to Section 379.6.
(8) Reevaluation of all efficiency cost-effectiveness tests in light of increases in wholesale electricity costs and of natural gas costs to explicitly include the system value of reduced load on reducing market clearing prices and volatility.
(c) In consultation with the Energy Commission, adopt and implement a residential, commercial, and industrial peak reduction program that encourages electric customers to reduce electricity consumption during peak power periods.

SEC. 20.

 Section 384 of the Public Utilities Code is amended to read:

384.
 (a) Funds transferred to the Energy Commission pursuant to this article for purposes of public interest research, development, and demonstration shall be transferred to the Public Interest Research, Development, and Demonstration Fund, which is hereby created in the State Treasury. The fund is a trust fund and shall contain money from all interest, repayments, disencumbrances, royalties, and any other proceeds appropriated, transferred, or otherwise received for purposes pertaining to public interest research, development, and demonstration. Any appropriations that are made from the fund shall have an encumbrance period of not longer than two years, and a liquidation period of not longer than four years.
(b) Funds deposited in the Public Interest Research, Development, and Demonstration Fund may be expended for projects that serve the energy needs of both stationary and transportation purposes if the research provides an electricity ratepayer benefit.
(c) The Energy Commission shall report annually to the appropriate budget committees of the Legislature on any encumbrances or liquidations that are outstanding at the time the commission’s budget is submitted to the Legislature for review.

SEC. 21.

 Section 394.25 of the Public Utilities Code is amended to read:

394.25.
 (a) The commission may enforce the provisions of Sections 2102, 2103, 2104, 2105, 2107, 2108, and 2114 against electric service providers as if those electric service providers were public utilities as defined in these code sections. Notwithstanding the above, nothing in this section grants the commission jurisdiction to regulate electric service providers other than as specifically set forth in this part. Electric service providers shall continue to be subject to the provisions of Sections 2111 and 2112. Upon a finding by the commission’s executive director that there is evidence to support a finding that the electric service provider has committed an act constituting grounds for suspension or revocation of registration as set forth in subdivision (b) of Section 394.25, the commission shall notify the electric service provider in writing and notice an expedited hearing on the suspension or revocation of the electric service provider’s registration to be held within 30 days of the notification to the electric service provider of the executive director’s finding of evidence to support suspension or revocation of registration. The commission shall, within 45 days after holding the hearing, issue a decision on the suspension or revocation of registration, which shall be based on findings of fact and conclusions of law based on the evidence presented at the hearing. The decision shall include the findings of fact and the conclusions of law relied upon.
(b) An electric service provider may have its registration suspended or revoked, immediately or prospectively, in whole or in part, for any of the following acts:
(1) Making material misrepresentations in the course of soliciting customers, entering into service agreements with those customers, or administering those service agreements.
(2) Dishonesty, fraud, or deceit with the intent to substantially benefit the electric service provider or its employees, agents, or representatives, or to disadvantage retail electricity customers.
(3) Where the commission finds that there is evidence that the electric service provider is not financially or operationally capable of providing the offered electric service.
(4) The misrepresentation of a material fact by an applicant in obtaining a registration pursuant to Section 394.
(c) Pursuant to its authority to revoke or suspend registration, the commission may suspend a registration for a specified period or revoke the registration, or in lieu of suspension or revocation, impose a moratorium on adding or soliciting additional customers. Any suspension or revocation of a registration shall require the electric service provider to cease serving customers within the boundaries of electrical corporations, and the affected customers shall be served by the electrical corporation until the time when they may select service from another service provider. Customers shall not be liable for the payment of any early termination fees or other penalties to any electric service provider under the service agreement if the serving electric service provider’s registration is suspended or revoked.
(d) The commission shall require any electric service provider whose registration is revoked pursuant to paragraph (4) of subdivision (b) to refund all of the customer credit funds that the electric service provider received from the Energy Commission pursuant to subdivision (a) of Section 25744 of the Public Resources Code. The repayment of these funds shall be in addition to all other penalties and fines appropriately assessed against the electric service provider for committing those acts under other provisions of law. All customer credit funds refunded under this subdivision shall be deposited in the Renewable Resource Trust Fund for redistribution by the Energy Commission pursuant to Chapter 8.6 (commencing with Section 25740) of Division 15 of the Public Resources Code. This subdivision may not be construed to apply retroactively.
(e) If a customer of an electric service provider or a community choice aggregator is involuntarily returned to service provided by an electrical corporation, any reentry fee imposed on that customer that the commission deems is necessary to avoid imposing costs on other customers of the electrical corporation shall be the obligation of the electric service provider or a community choice aggregator, except in the case of a customer returned due to default in payment or other contractual obligations or because the customer’s contract has expired. As a condition of its registration, an electric service provider or a community choice aggregator shall post a bond or demonstrate insurance sufficient to cover those reentry fees. In the event that an electric service provider becomes insolvent and is unable to discharge its obligation to pay reentry fees, the fees shall be allocated to the returning customers.

SEC. 22.

 Section 399.20 of the Public Utilities Code is amended to read:

399.20.
 (a) It is the policy of this state and the intent of the Legislature to encourage electrical generation from eligible renewable energy resources.
(b) As used in this section, “electric generation facility” means an electric generation facility located within the service territory of, and developed to sell electricity to, an electrical corporation that meets all of the following criteria:
(1) Has an effective capacity of not more than three megawatts, with the exception of those facilities participating in a tariff made available pursuant to paragraph (2) of subdivision (f).
(2) Is interconnected and operates in parallel with the electrical transmission and distribution grid.
(3) (A) Except as provided in subparagraph (B), is strategically located and interconnected to the electrical transmission and distribution grid in a manner that optimizes the deliverability of electricity generated at the facility to load centers.
(B) For purposes of paragraph (2) of subdivision (f), is strategically located and interconnected to the electrical transmission and distribution grid in a manner that optimizes the deliverability of electricity generated at the facility to load centers or is interconnected to an existing transmission line.
(4) Is an eligible renewable energy resource.
(c) Every electrical corporation shall file with the commission a standard tariff for electricity purchased from an electric generation facility. The commission may modify or adjust the requirements of this section for any electrical corporation with less than 100,000 service connections, as individual circumstances merit.
(d) (1) The tariff shall provide for payment for every kilowatthour of electricity purchased from an electric generation facility for a period of 10, 15, or 20 years, as authorized by the commission. The payment shall be the market price determined by the commission pursuant to paragraph (2) and shall include all current and anticipated environmental compliance costs, including, but not limited to, mitigation of emissions of greenhouse gases and air pollution offsets associated with the operation of new generating facilities in the local air pollution control or air quality management district where the electric generation facility is located.
(2) The commission shall establish a methodology to determine the market price of electricity for terms corresponding to the length of contracts with an electric generation facility, in consideration of the following:
(A) The long-term market price of electricity for fixed price contracts, determined pursuant to an electrical corporation’s general procurement activities as authorized by the commission.
(B) The long-term ownership, operating, and fixed-price fuel costs associated with fixed-price electricity from new generating facilities.
(C) The value of different electricity products including baseload, peaking, and as-available electricity.
(3) The commission may adjust the payment rate to reflect the value of every kilowatthour of electricity generated on a time-of-delivery basis.
(4) The commission shall ensure, with respect to rates and charges, that ratepayers that do not receive service pursuant to the tariff are indifferent to whether a ratepayer with an electric generation facility receives service pursuant to the tariff.
(e) An electrical corporation shall provide expedited interconnection procedures to an electric generation facility located on a distribution circuit that generates electricity at a time and in a manner so as to offset the peak demand on the distribution circuit, if the electrical corporation determines that the electric generation facility will not adversely affect the distribution grid. The commission shall consider and may establish a value for an electric generation facility located on a distribution circuit that generates electricity at a time and in a manner so as to offset the peak demand on the distribution circuit.
(f) (1) An electrical corporation shall make the tariff available to the owner or operator of an electric generation facility within the service territory of the electrical corporation, upon request, on a first-come-first-served basis, until the electrical corporation meets its proportionate share of a statewide cap of 750 megawatts cumulative rated generation capacity served under this section and Section 399.32. The proportionate share shall be calculated based on the ratio of the electrical corporation’s peak demand compared to the total statewide peak demand.
(2) By June 1, 2013, the commission shall, in addition to the 750 megawatts identified in paragraph (1), direct the electrical corporations to collectively procure at least 250 megawatts of cumulative rated generating capacity from developers of bioenergy projects that commence operation on or after June 1, 2013. The commission shall, for each electrical corporation, allocate shares of the additional 250 megawatts based on the ratio of each electrical corporation’s peak demand compared to the total statewide peak demand. In implementing this paragraph, the commission shall do all of the following:
(A) Allocate the 250 megawatts identified in this paragraph among the electrical corporations based on the following categories:
(i) For biogas from wastewater treatment, municipal organic waste diversion, food processing, and codigestion, 110 megawatts.
(ii) For dairy and other agricultural bioenergy, 90 megawatts.
(iii) For bioenergy using byproducts of sustainable forest management, 50 megawatts. Allocations under this category shall be determined based on the proportion of bioenergy that sustainable forest management providers derive from sustainable forest management in fire threat treatment areas, as designated by the Department of Forestry and Fire Protection.
(B) Direct the electrical corporations to develop standard contract terms and conditions that reflect the operational characteristics of the projects, and to provide a streamlined contracting process.
(C) Coordinate, to the maximum extent feasible, any incentive or subsidy programs for bioenergy with the agencies listed in subparagraph (A) of paragraph (3) in order to provide maximum benefits to ratepayers and to ensure that incentives are used to reduce contract prices.
(D) The commission shall encourage gas and electrical corporations to develop and offer programs and services to facilitate development of in-state biogas for a broad range of purposes.
(E) Direct the electrical corporations to authorize a bioenergy electric generation facility with an effective capacity of up to five megawatts to participate in the tariff made available pursuant to this paragraph, if it meets the following conditions:
(i) It delivers no more than three megawatts to the grid at any time.
(ii) It complies with the electrical corporation’s Electric Rule 21 tariff or other distribution access tariff.
(F) Payment is made pursuant to paragraph (1) of subdivision (d) and no payment is made for any electricity delivered to the grid in excess of three megawatts at any time.
(3) (A) The commission, in consultation with the Energy Commission, the State Air Resources Board, the Department of Forestry and Fire Protection, the Department of Food and Agriculture, and the Department of Resources Recycling and Recovery, may review the allocations of the 250 additional megawatts identified in paragraph (2) to determine if those allocations are appropriate.
(B) If the commission finds that the allocations of the 250 additional megawatts identified in paragraph (2) are not appropriate, the commission may reallocate the 250 megawatts among the categories established in subparagraph (A) of paragraph (2).
(4) (A) A project identified in clause (iii) of subparagraph (A) of paragraph (2) is eligible, in regards to interconnection, for the tariff established to implement paragraph (2) or to participate in any program or auction established to implement paragraph (2), if it meets at least one of the following requirements:
(i) The project is already interconnected.
(ii) The project has been found to be eligible for interconnection pursuant to the fast track process under the relevant tariff.
(iii) A system impact study or other interconnection study has been completed for the project under the relevant tariff, and there was no determination in the study that, with the identified interconnection upgrades, if any, a condition specified in paragraph (2), (3), or (4) of subdivision (n) would exist. Such a project is not required to have a pending, active interconnection application to be eligible.
(B) For a project meeting the eligibility requirements pursuant to clause (iii) of subparagraph (A) of this paragraph, both of the following apply:
(i) The project is hereby deemed to be able to interconnect within the required time limits for the purpose of determining eligibility for the tariff.
(ii) The project shall submit a new application for interconnection within 30 days of execution of a standard contract pursuant to the tariff if it does not have a pending, active interconnection application or a completed interconnection. For those projects, the time to achieve commercial operation shall begin to run from the date when the new system impact study or other interconnection study is completed rather than from the date of execution of the standard contract.
(5) For the purposes of this subdivision, “bioenergy” means biogas and biomass.
(g) The electrical corporation may make the terms of the tariff available to owners and operators of an electric generation facility in the form of a standard contract subject to commission approval.
(h) Every kilowatthour of electricity purchased from an electric generation facility shall count toward meeting the electrical corporation’s renewables portfolio standard annual procurement targets for purposes of paragraph (1) of subdivision (b) of Section 399.15.
(i) The physical generating capacity of an electric generation facility shall count toward the electrical corporation’s resource adequacy requirement for purposes of Section 380.
(j) (1) The commission shall establish performance standards for any electric generation facility that has a capacity greater than one megawatt to ensure that those facilities are constructed, operated, and maintained to generate the expected annual net production of electricity and do not impact system reliability.
(2) The commission may reduce the three megawatt capacity limitation of paragraph (1) of subdivision (b) if the commission finds that a reduced capacity limitation is necessary to maintain system reliability within that electrical corporation’s service territory.
(k) (1) Any owner or operator of an electric generation facility that received ratepayer-funded incentives in accordance with Section 379.6 of this code, or with Section 25782 of the Public Resources Code, and participated in a net metering program pursuant to Sections 2827, 2827.9, and 2827.10 of this code before January 1, 2010, shall be eligible for a tariff or standard contract filed by an electrical corporation pursuant to this section.
(2) In establishing the tariffs or standard contracts pursuant to this section, the commission shall consider ratepayer-funded incentive payments previously received by the generation facility pursuant to Section 379.6 of this code or Section 25782 of the Public Resources Code. The commission shall require reimbursement of any funds received from these incentive programs to an electric generation facility, in order for that facility to be eligible for a tariff or standard contract filed by an electrical corporation pursuant to this section, unless the commission determines ratepayers have received sufficient value from the incentives provided to the facility based on how long the project has been in operation and the amount of renewable electricity previously generated by the facility.
(3) A customer that receives service under a tariff or contract approved by the commission pursuant to this section is not eligible to participate in any net metering program.
(l) An owner or operator of an electric generation facility electing to receive service under a tariff or contract approved by the commission shall continue to receive service under the tariff or contract until either of the following occurs:
(1) The owner or operator of an electric generation facility no longer meets the eligibility requirements for receiving service pursuant to the tariff or contract.
(2) The period of service established by the commission pursuant to subdivision (d) is completed.
(m) Within 10 days of receipt of a request for a tariff pursuant to this section from an owner or operator of an electric generation facility, the electrical corporation that receives the request shall post a copy of the request on its internet website. The information posted on the internet website shall include the name of the city in which the facility is located, but information that is proprietary and confidential, including, but not limited to, address information beyond the name of the city in which the facility is located, shall be redacted.
(n) An electrical corporation may deny a tariff request pursuant to this section if the electrical corporation makes any of the following findings:
(1) The electric generation facility does not meet the requirements of this section.
(2) The transmission or distribution grid that would serve as the point of interconnection is inadequate.
(3) The electric generation facility does not meet all applicable state and local laws and building standards and utility interconnection requirements.
(4) The aggregate of all electric generating facilities on a distribution circuit would adversely impact utility operation and load restoration efforts of the distribution system.
(o) Upon receiving a notice of denial from an electrical corporation, the owner or operator of the electric generation facility denied a tariff pursuant to this section shall have the right to appeal that decision to the commission.
(p) In order to ensure the safety and reliability of electric generation facilities, the owner of an electric generation facility receiving a tariff pursuant to this section shall provide an inspection and maintenance report to the electrical corporation at least once every other year. The inspection and maintenance report shall be prepared at the owner’s or operator’s expense by a California-licensed contractor who is not the owner or operator of the electric generation facility. A California-licensed electrician shall perform the inspection of the electrical portion of the generation facility.
(q) The contract between the electric generation facility receiving the tariff and the electrical corporation shall contain provisions that ensure that construction of the electric generating facility complies with all applicable state and local laws and building standards, and utility interconnection requirements.
(r) (1) All construction and installation of facilities of the electrical corporation, including at the point of the output meter or at the transmission or distribution grid, shall be performed only by that electrical corporation.
(2) All interconnection facilities installed on the electrical corporation’s side of the transfer point for electricity between the electrical corporation and the electrical conductors of the electric generation facility shall be owned, operated, and maintained only by the electrical corporation. The ownership, installation, operation, reading, and testing of revenue metering equipment for electric generating facilities shall only be performed by the electrical corporation.

SEC. 23.

 Section 451.1 of the Public Utilities Code is amended to read:

451.1.
 (a) For purposes of this section, the following terms have the following meanings:
(1) “Covered wildfire” has the same meaning as defined in Section 1701.8.
(2) “Wildfire Fund” means the Wildfire Fund created pursuant to Section 3284.
(b)  When determining an application by an electrical corporation to recover costs and expenses arising from a covered wildfire, the commission shall allow cost recovery if the costs and expenses are just and reasonable. Costs and expenses arising from a covered wildfire are just and reasonable if the conduct of the electrical corporation related to the ignition was consistent with actions that a reasonable utility would have undertaken in good faith under similar circumstances, at the relevant point in time, and based on the information available to the electrical corporation at the relevant point in time. Reasonable conduct is not limited to the optimum practice, method, or act to the exclusion of others, but rather encompasses a spectrum of possible practices, methods, or acts consistent with utility system needs, the interest of the ratepayers, and the requirements of governmental agencies of competent jurisdiction. Costs and expenses in the application may be allocated for cost recovery in full or in part taking into account factors both within and beyond the utility’s control that may have exacerbated the costs and expenses, including humidity, temperature, and winds.
(c)  An electrical corporation bears the burden to demonstrate, based on a preponderance of the evidence, that its conduct was reasonable pursuant to subdivision (b) unless it has a valid safety certification pursuant to Section 8389 for the time period in which the covered wildfire that is the subject of the application ignited. If the electrical corporation has received a valid safety certification for the time period in which the covered wildfire ignited, an electrical corporation’s conduct shall be deemed to have been reasonable pursuant to subdivision (b) unless a party to the proceeding creates a serious doubt as to the reasonableness of the electrical corporation’s conduct. Once serious doubt has been raised, the electrical corporation has the burden of dispelling that doubt and proving the conduct to have been reasonable.
(d)  If an electrical corporation has drawn amounts from the Wildfire Fund for eligible claims for a covered wildfire, then the electrical corporation shall file an application to recover costs and expenses pursuant to Section 1701.8 after it has paid substantially all third-party liability claims arising from the covered wildfire.
(e) Notwithstanding Section 451, this section shall direct the commission’s evaluation of applications for recovery of costs and expenses arising from a covered wildfire. This section shall not apply to any other applications for cost recovery.
(f) This section shall not affect any civil action, appeal, or other action or proceeding.
(g) This section shall become inoperative if Section 3292 becomes inoperative pursuant to subdivision (k) of that section and this section shall be repealed on the first January 1 more than three months after this section becomes inoperative. The commission shall notify the Secretary of State as to whether this section becomes inoperative and is repealed.

SEC. 24.

 Section 701.1 of the Public Utilities Code is amended to read:

701.1.
 (a) (1) The Legislature finds and declares that, in addition to other ratepayer protection objectives, a principal goal of electric and natural gas utilities’ resource planning and investment shall be to minimize the cost to society of the reliable energy services that are provided by natural gas and electricity, and to improve the environment and to encourage the diversity of energy sources through improvements in energy efficiency, the development of renewable energy resources, such as wind, solar, biomass, and geothermal energy, and widespread transportation electrification.
(2) The amendment made to this subdivision by the Clean Energy and Pollution Reduction Act of 2015 (Chapter 547 of the Statutes of 2015) does not expand the authority of the commission beyond that provided by other law.
(b) The Legislature further finds and declares that, in addition to any appropriate investments in energy production, electrical and natural gas utilities should seek to exploit all practicable and cost-effective conservation and improvements in the efficiency of energy use and distribution that offer equivalent or better system reliability and that are not being exploited by any other entity.
(c) In calculating the cost-effectiveness of energy resources, including conservation and load management options, the commission shall include, in addition to other ratepayer protection objectives, a value for any costs and benefits to the environment, including air quality. The commission shall ensure that any values it develops pursuant to this section are consistent with values developed by the Energy Commission pursuant to Section 25000.1 of the Public Resources Code. However, if the commission determines that a value developed pursuant to this subdivision is not consistent with a value developed by the Energy Commission pursuant to subdivision (c) of Section 25000.1 of the Public Resources Code, the commission may nonetheless use this value if, in the appropriate record of its proceedings, it states its reasons for using the value it has selected.
(d) In determining the emission values associated with the current operating capacity of existing electric powerplants pursuant to subdivision (c), the commission shall adhere to the following protocol in determining values for air quality costs and benefits to the environment. If the commission finds that an air pollutant that is subject to regulation is a component of residual emissions from an electric powerplant and that the owner of that powerplant is either of the following:
(1) Using a tradable emission allowance, right, or offset for that pollutant, which (A) has been approved by the air quality district regulating the powerplant, (B) is consistent with federal and state law, and (C) has been obtained, authorized, or acquired in a market-based system.
(2) Paying a tax per measured unit of that pollutant.
The commission shall not assign a value or cost to that residual pollutant for the current operating capacity of that powerplant because the alternative protocol for dealing with the pollutant operates to internalize its cost for the purpose of planning for and acquiring new generating resources.
(e) (1) The values determined pursuant to subdivision (c) to represent costs and benefits to the environment shall not be used by the commission, in and of themselves, to require early decommissioning or retirement of an electric utility powerplant that complies with applicable prevailing environmental regulations.
(2) Further, the environmental values determined pursuant to subdivision (c) shall not be used by the commission in a manner that, when those values are aggregated, will result in advancing an electric utility’s need for new powerplant capacity by more than 15 months.
(f) This subdivision shall apply whenever a powerplant bid solicitation is required by the commission for an electric utility and a portion of the amount of new powerplant capacity, which is the subject of the bid solicitation, is the result of the commission’s use of environmental values to advance that electric utility’s need for new powerplant capacity in the manner authorized by paragraph (2) of subdivision (e). The affected electric utility may propose to the commission any combination of alternatives to that portion of the new powerplant capacity that is the result of the commission’s use of environmental values as authorized by paragraph (2) of subdivision (c). The commission shall approve an alternative in place of the new powerplant capacity if it finds all of the following:
(1) The alternative has been approved by the relevant air quality district.
(2) The alternative is consistent with federal and state law.
(3) The alternative will result in needed system reliability for the electric utility at least equivalent to that which would result from bidding for new powerplant capacity.
(4) The alternative will result in reducing system operating costs for the electric utility over those that would result from the process of bidding for new powerplant capacity.
(5) The alternative will result in equivalent or better environmental improvements at a lower cost than would result from bidding for new powerplant capacity.
(g) This section does not require an electric utility to alter the dispatch of its powerplants for environmental purposes.
(h) This section does not preclude an electric utility from submitting to the commission any combination of alternatives to meet a commission-identified need for new capacity, if the submission is otherwise authorized by the commission.
(i) This section does not change or alter any provision of commission Decision 92-04-045 (April 22, 1992), Application of Pacific Gas and Electric Company for an Ex Parte Order Approving Settlement Agreements Between Pacific Gas and Electric Company and Certain Winning Bidders in Pacific Gas and Electric Company’s Biennial Resource Plan Update Auction.

SEC. 25.

 Section 714 of the Public Utilities Code is amended to read:

714.
 (a) The commission, no later than July 1, 2017, shall open a proceeding to determine the feasibility of minimizing or eliminating use of the Aliso Canyon natural gas storage facility located in the County of Los Angeles while still maintaining energy and electrical reliability for the region. This determination shall be consistent with the Clean Energy and Pollution Reduction Act of 2015 (Chapter 547 of the Statutes of 2015) and Executive Order B-30-2015. The commission shall consult with the Energy Commission, the Independent System Operator, the local publicly owned electric utilities that rely on natural gas for electricity generation, the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation, affected balancing authorities, and other relevant government entities, in making its determination.
(b) This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.

SEC. 26.

 Section 715 of the Public Utilities Code is amended to read:

715.
 (a) The commission shall direct the operator of the Aliso Canyon natural gas storage facility located in the County of Los Angeles to provide all information the commission deems necessary for the commission to determine, in consultation with the Energy Commission, the Independent System Operator, and affected publicly owned utilities, the range of working gas necessary to ensure safety and reliability for the region and just and reasonable rates in California. The determination shall be based on best available data, and shall incorporate data from recent and ongoing studies being conducted to determine energy and gas use in the region by the commission, the Energy Commission, the Independent System Operator, and affected publicly owned utilities.
(b) Within 30 days of the effective date of the act adding this section, the commission shall publish a report that includes, but is not limited to, all of the following:
(1) The range of working gas necessary at the facility to ensure safety and reliability and just and reasonable rates in California determined pursuant to subdivision (a).
(2) The amount of natural gas production at the facility needed to meet safety and reliability requirements.
(3) The number of wells and associated injection and production capacity required.
(4) The availability of sufficient natural gas production using gas storage wells that have satisfactorily completed testing and remediation required under subparagraph (B) of paragraph (4) of subdivision (c) of Section 3217 of the Public Resources Code.
(c) The commission shall make the report required under subdivision (b) available on its internet website and seek, either through written comments or a workshop, public comments on the report.
(d) The executive director of the commission, in consultation with the State Oil and Gas Supervisor, shall direct the operator to maintain the specified range of working gas, determined pursuant to subdivision (a), at the facility to ensure reliability and just and reasonable rates in California, after all of the following occur:
(1) The gas storage well comprehensive safety review is complete pursuant to paragraph (5) of subdivision (c) of Section 3217 of the Public Resources Code.
(2) The State Oil and Gas Supervisor has approved the maximum and minimum reservoir pressure pursuant to subdivision (e) of Section 3217 of the Public Resources Code.
(3) The State Oil and Gas Supervisor has allowed injections of natural gas at the facility, pursuant to subdivision (f) of Section 3217 of the Public Resources Code.
(4) The commission has allowed, and received, public comment on the report pursuant to subdivision (c).
(e) In no case may the volume of working gas set by the executive director of the commission result in reservoir pressures that fall out of the range established pursuant to subdivision (e) of Section 3217 of the Public Resources Code.
(f) This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.

SEC. 27.

 Section 740.3 of the Public Utilities Code is amended to read:

740.3.
 (a) The commission, in cooperation with the Energy Commission, the State Air Resources Board, air quality management districts and air pollution control districts, regulated electrical and gas corporations, and the motor vehicle industry, shall evaluate and implement policies to promote the development of equipment and infrastructure needed to facilitate the use of electricity and natural gas to fuel low-emission vehicles. Policies to be considered shall include both of the following:
(1) The sale-for-resale and the rate-basing of low-emission vehicles and supporting equipment such as batteries for electric vehicles and compressor stations for natural gas fueled vehicles.
(2) The development of statewide standards for electric vehicle charger connections and compressed natural gas vehicle fueling connections, including installation procedures and technical assistance to installers.
(b) The commission shall hold public hearings as part of its effort to evaluate and implement the new policies considered in subdivision (a).
(c) The commission’s policies authorizing utilities to develop equipment or infrastructure needed for electricity-powered and natural gas-fueled low-emission vehicles shall ensure that the costs and expenses of those programs are not passed through to electrical or gas ratepayers unless the commission finds and determines that those programs are in the ratepayers’ interest. The commission’s policies shall also ensure that utilities do not unfairly compete with nonutility enterprises.

SEC. 28.

 Section 785 of the Public Utilities Code is amended to read:

785.
 To the extent consistent with federal law and regulation and contractual obligations regarding other available gas, the commission shall, in consultation with the Division of Oil and Gas of the Department of Conservation and with the Energy Commission, encourage, as a first priority, the increased production of gas in this state, including gas produced from that area of the Pacific Ocean along the coast of California commonly known as the outer continental shelf, and shall require, after a hearing, every gas corporation to purchase that gas which is compatible with the corporation’s gas plant and which is produced in this state having an actual delivered cost, measured in equivalent heat units, equal to or less than other available gas, unless this requirement will result in higher overall costs of gas or other consequences adverse to the interests of gas customers.

SEC. 29.

 Section 850 of the Public Utilities Code is amended to read:

850.
 (a) This article applies in either of the following circumstances:
(1) If an electrical corporation applies to the commission for recovery of costs and expenses related to a catastrophic wildfire and the commission finds some or all of the costs and expenses to be reasonable pursuant to Section 451.1, or for the amount of costs and expenses determined pursuant to subdivision (c) of Section 451.2, then the electrical corporation may file an application requesting the commission to issue a financing order to authorize these costs and expenses to be recovered through fixed recovery charges pursuant to this article.
(2) If an electrical corporation submits an application for recovery of costs and expenses related to catastrophic wildfires, including fire risk mitigation capital expenditures identified in subdivision (e) of Section 8386.3, in a proceeding to recover costs and expenses in rates and the commission finds that some or all of the costs and expenses identified in the electrical corporation’s application are just and reasonable pursuant to Section 451, the electrical corporation may file an application requesting the commission to issue a financing order to authorize the recovery of those just and reasonable costs and expenses by means of a financing order, with those costs and expenses being recovered through a fixed charge pursuant to this article. This paragraph does not apply for costs and expenses incurred by the electrical corporation after December 31, 2035.
(b) For the purposes of this article, the following terms shall have the following meanings:
(1) “Ancillary agreement” means a bond insurance policy, letter of credit, reserve account, surety bond, swap arrangement, hedging arrangement, liquidity or credit support arrangement, or other similar agreement or arrangement entered into in connection with the issuance of recovery bonds that is designed to promote the credit quality and marketability of the bonds or to mitigate the risk of an increase in interest rates.
(2) “Catastrophic wildfire amounts” means the portion of costs and expenses the commission finds to be just and reasonable pursuant to Section 451.1 or the amount determined pursuant to subdivision (c) of Section 451.2.
(3) “Consumer” means any individual, governmental body, trust, business entity, or nonprofit organization that consumes electricity that has been transmitted or distributed by means of electric transmission or distribution facilities, whether those electric transmission or distribution facilities are owned by the consumer, the electrical corporation, or any other party.
(4) “Financing costs” means the costs to issue, service, repay, or refinance recovery bonds, whether incurred or paid upon issuance of the recovery bonds or over the life of the recovery bonds, if they are approved for recovery by the commission in a financing order. “Financing costs” may include any of the following:
(A) Principal, interest, and redemption premiums that are payable on recovery bonds.
(B) A payment required under an ancillary agreement.
(C) An amount required to fund or replenish reserve accounts or other accounts established under an indenture, ancillary agreement, or other financing document relating to the recovery bonds.
(D) Taxes, franchise fees, or license fees imposed on fixed recovery charges.
(E) Costs related to issuing and servicing recovery bonds or the application for a financing order, including, without limitation, servicing fees and expenses, trustee fees and expenses, legal fees and expenses, accounting fees, administrative fees, underwriting and placement fees, financial advisory fees, original issue discount, capitalized interest, rating agency fees, and any other related costs that are approved for recovery in the financing order.
(F) Other costs as specifically authorized by a financing order.
(5) “Financing entity” means the electrical corporation or any subsidiary or affiliate of the electrical corporation that is authorized by the commission to issue recovery bonds or acquire recovery property, or both.
(6) “Financing order” means an order of the commission adopted in accordance with this article, which shall include, without limitation, a procedure to require the expeditious approval by the commission of periodic adjustments to fixed recovery charges and to any associated fixed recovery tax amounts included in that financing order to ensure recovery of all recovery costs and the costs associated with the proposed recovery, financing, or refinancing thereof, including the costs of servicing and retiring the recovery bonds contemplated by the financing order.
(7) “Fixed recovery charges” means those nonbypassable rates and other charges, including, but not limited to, distribution, connection, disconnection, and termination rates and charges, that are authorized by the commission in a financing order to recover both of the following:
(A) Recovery costs specified in the financing order.
(B) The costs of recovering, financing, or refinancing those recovery costs through a plan approved by the commission in the financing order, including the costs of servicing and retiring recovery bonds.
(8) “Fixed recovery tax amounts” means those nonbypassable rates and other charges, including, but not limited to, distribution, connection, disconnection, and termination rates and charges, that are needed to recover federal and State of California income and franchise taxes associated with fixed recovery charges authorized by the commission in a financing order, but are not approved as financing costs financed from proceeds of recovery bonds.
(9) “Recovery bonds” means bonds, notes, certificates of participation or beneficial interest, or other evidences of indebtedness or ownership, issued pursuant to an executed indenture or other agreement of a financing entity, the proceeds of which are used, directly or indirectly, to recover, finance, or refinance recovery costs, and that are directly or indirectly secured by, or payable from, recovery property.
(10) “Recovery costs” means any of the following:
(A) The catastrophic wildfire amounts or costs pursuant to paragraph (2) of subdivision (a) authorized by the commission in a financing order for recovery.
(B) Federal and State of California income and franchise taxes associated with recovery of the amounts pursuant to subparagraph (A).
(C) Financing costs.
(D) Professional fees, consultant fees, redemption premiums, tender premiums, and other costs incurred by the electrical corporation in using proceeds of recovery bonds to acquire outstanding securities of the electrical corporation, as authorized by the commission in a financing order.
(11) (A) “Recovery property” means the property right created pursuant to this article, including, without limitation, the right, title, and interest of the electrical corporation or its transferee:
(i) In and to the fixed recovery charges established pursuant to a financing order, including all rights to obtain adjustments to the fixed recovery charges in accordance with Section 850.1 and the financing order.
(ii) To be paid the amount that is determined in a financing order to be the amount that the electrical corporation or its transferee is lawfully entitled to receive pursuant to the provisions of this article and the proceeds thereof, and in and to all revenues, collections, claims, payments, moneys, or proceeds of or arising from the fixed recovery charges that are the subject of a financing order.
(B) “Recovery property” shall not include a right to be paid fixed recovery tax amounts.
(C) “Recovery property” shall constitute a current property right, notwithstanding the fact that the value of the property right will depend on consumers using electricity or, in those instances where consumers are customers of the electrical corporation, the electrical corporation performing certain services.
(12) “Service territory” means the geographical area that the electrical corporation provides with electric distribution service.
(13) “True-up adjustment” means a formulaic adjustment to the fixed recovery charges as they appear on customer bills that is necessary to correct for any overcollection or undercollection of the fixed recovery charges authorized by a financing order and to otherwise ensure the timely and complete payment and recovery of recovery costs over the authorized repayment term.

SEC. 30.

 Section 850.1 of the Public Utilities Code is amended to read:

850.1.
 (a) If an electrical corporation files for recovery of recovery costs and the commission finds some or all of those costs and expenses to be just and reasonable pursuant to Section 451 or 451.1, as applicable, or the commission allocates to the ratepayers some or all of those costs and expenses pursuant to subdivision (c) of Section 451.2, the commission may issue a financing order to allow recovery through fixed recovery charges, which would therefore constitute recovery property under this article, and order that any portion of the electrical corporation’s federal and State of California income and franchise taxes associated with those fixed recovery charges and not financed from proceeds of recovery bonds may be recovered through fixed recovery tax amounts.
(1) (A) Following application by an electrical corporation, the commission shall issue a financing order if the commission determines that the following conditions are satisfied:
(i) The recovery cost to be reimbursed from the recovery bonds have been found to be just and reasonable pursuant to Section 451 or 451.1, as applicable, or are allocated to the ratepayers pursuant to subdivision (c) of Section 451.2.
(ii) The issuance of the recovery bonds, including all material terms and conditions of the recovery bonds, including, without limitation, interest rates, rating, amortization redemption, and maturity, and the imposition and collection of fixed recovery charges as set forth in an application satisfy all of the following conditions, as applicable:
(I) They are just and reasonable.
(II) They are consistent with the public interest.
(III) The recovery of recovery costs through the designation of the fixed recovery charges and any associated fixed recovery tax amounts, and the issuance of recovery bonds in connection with the fixed recovery charges, would reduce, to the maximum extent possible, the rates on a present value basis that consumers within the electrical corporation’s service territory would pay as compared to the use of traditional utility financing mechanisms, which shall be calculated using the electrical corporation’s corporate debt and equity in the ratio approved by the commission at the time of the financing order.
(B) The electrical corporation may request the determination specified in subparagraph (A) by the commission in a separate proceeding or in an existing proceeding or both. If the commission makes the determination specified in subparagraph (A), the commission shall establish, as part of the financing order, a procedure for the electrical corporation to submit applications from time to time to request the issuance of additional financing orders designating fixed recovery charges and any associated fixed recovery tax amounts as recoverable. The electrical corporation may submit an application with respect to recovery costs that an electrical corporation (i) has paid, (ii) has an existing legal obligation to pay, or (iii) would be obligated to pay pursuant to an executed settlement agreement. The commission shall, within 180 days of the filing of that application, issue a financing order, which may take the form of a resolution, if the commission determines that the amounts identified in the application are recovery costs.
(2) Fixed recovery charges and any associated fixed recovery tax amounts shall be imposed only on existing and future consumers in the service territory. Consumers within the service territory shall continue to pay fixed recovery charges and any associated fixed recovery tax amounts until the recovery bonds and associated financing costs are paid in full by the financing entity.
(3) An electrical corporation may exercise the same rights and remedies under its tariff and applicable law and regulation based upon a consumer’s nonpayment of fixed recovery charges and any associated fixed recovery tax as it could for a consumer’s failure to pay any other charge payable to that electrical corporation.
(b) The commission may establish in a financing order an effective mechanism that ensures recovery of recovery costs through nonbypassable fixed recovery charges and any associated fixed recovery tax amounts from existing and future consumers in the service territory, and those consumers shall be required to pay those charges until the recovery bonds and all associated financing costs are paid in full by the financing entity, at which time those charges shall be terminated. Fixed recovery charges shall be irrevocable, notwithstanding the true-up adjustment pursuant to subdivision (g).
(c) Recovery bonds authorized by the commission’s financing orders may be issued in one or more series on or before December 31, 2035.
(d) The commission shall issue financing orders in accordance with this article to facilitate the recovery, financing, or refinancing of recovery costs. A financing order may be adopted only upon the application of the electrical corporation and shall become effective in accordance with its terms only after the electrical corporation files with the commission the electrical corporation’s written consent to all terms and conditions of the financing order. A financing order may specify how amounts collected from a consumer shall be allocated between fixed recovery charges, any associated fixed recovery tax amounts, and other charges.
(e) Notwithstanding Section 455.5 or 1708, or any other law, and except as otherwise provided in subdivision (g), with respect to recovery property that has been made the basis for the issuance of recovery bonds and with respect to any associated fixed recovery tax amounts, the financing order, the fixed recovery charges, and any associated fixed recovery tax amounts shall be irrevocable. The commission shall not, either by rescinding, altering, or amending the financing order or otherwise, revalue or revise for ratemaking purposes the recovery costs or the costs of recovering, financing, or refinancing the recovery costs, in any way reduce or impair the value of recovery property or of the right to receive any associated fixed recovery tax amounts either directly or indirectly by taking fixed recovery charges or any associated fixed recovery tax amounts into account when setting other rates for the electrical corporation or when setting charges for the Department of Water Resources. The amount of revenues shall not be subject to reduction, impairment, postponement, or termination. The State of California does hereby pledge and agree with the electrical corporation, owners of recovery property, financing entities, and holders of recovery bonds that the state shall neither limit nor alter, except as otherwise provided with respect to the true-up adjustment of the fixed recovery charges pursuant to subdivision (i), the fixed recovery charges, any associated fixed recovery tax amounts, recovery property, financing orders, or any rights under a financing order until the recovery bonds, together with the interest on the recovery bonds and associated financing costs, are fully paid and discharged, and any associated fixed recovery tax amounts have been satisfied or, in the alternative, have been refinanced through an additional issue of recovery bonds, provided that nothing contained in this section shall preclude the limitation or alteration if and when adequate provision shall be made by law for the protection of the electrical corporation and of owners and holders of the recovery bonds. The financing entity is authorized to include this pledge and undertaking for the state in these recovery bonds. When setting other rates for the electrical corporation, nothing in this subdivision shall prevent the commission from taking into account either of the following:
(1) Any collection of fixed recovery charges in excess of amounts actually required to pay recovery costs financed or refinanced by recovery bonds.
(2) Any collection of fixed recovery tax amounts in excess of amounts actually required to pay federal and State of California income and franchise taxes associated with fixed recovery charges, provided that this would not result in a recharacterization of the tax, accounting, and other intended characteristics of the financing, including, but not limited to, either of the following:
(A) Treating the recovery bonds as debt of the electrical corporation or its affiliates for federal income tax purposes.
(B) Treating the transfer of the recovery property by the electrical corporation as a true sale for bankruptcy purposes.
(f) (1) Neither financing orders nor recovery bonds issued under this article shall constitute a debt or liability of the state or of any political subdivision thereof, nor shall they constitute a pledge of the full faith and credit of the state or any of its political subdivisions, but are payable solely from the funds provided therefor under this article and shall be consistent with Sections 1 and 18 of Article XVI of the California Constitution. All recovery bonds shall contain on the face thereof a statement to the following effect: “Neither the full faith and credit nor the taxing power of the State of California is pledged to the payment of the principal of, or interest on, this bond.”
(2) The issuance of recovery bonds under this article shall not directly, indirectly, or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation therefor or to make any appropriation for their payment.
(g) The commission shall establish procedures for the expeditious processing of an application for a financing order, which shall provide for the approval or disapproval of the application within 120 days of the application. Any fixed recovery charge authorized by a financing order shall appear on consumer bills. The commission shall, in any financing order, provide for a procedure for periodic true-up adjustments to fixed recovery charges, which shall be made at least annually and may be made more frequently. The electrical corporation shall file an application with the commission to implement any true-up adjustment.
(h) Fixed recovery charges are recovery property when, and to the extent that, a financing order authorizing the fixed recovery charges has become effective in accordance with this article, and the recovery property shall thereafter continuously exist as property for all purposes, and all of the rights and privileges relating to that property accorded by this article shall continuously exist for the period and to the extent provided in the financing order, but in any event until the recovery bonds are paid in full, including all principal, premiums, if any, and interest with respect to the recovery bonds, and all associated financing costs are paid in full. A financing order may provide that the creation of recovery property shall be simultaneous with the sale of the recovery property to a transferee or assignee as provided in the application of the pledge of the recovery property to secure the recovery bonds.
(i) Recovery costs shall not be imposed upon customers participating in the California Alternative Rates for Energy or Family Electric Rate Assistance programs discount pursuant to Section 739.1.
(j) Any successor to a financing entity shall be bound by the requirements of this article and shall perform and satisfy all obligations of, and have the same rights under a financing order as and to the same extent as, the financing entity, including the obligation to collect and pay energy transition revenues to persons entitled to receive the revenues.
(k) This article and any financing order made pursuant to this article do not amend, reduce, modify, or otherwise affect the right of the Department of Water Resources to recover its revenue requirements and to receive the charges that it is to recover and receive pursuant to Division 27 (commencing with Section 80000) and Division 28 (commencing with Section 80500) of the Water Code, or pursuant to any agreement entered into by the commission and the Department of Water Resources pursuant to the applicable division.

SEC. 31.

 Section 854.2 of the Public Utilities Code is amended to read:

854.2.
 (a) The Legislature finds and declares all of the following:
(1) California’s electric and gas utilities provide essential services to California residents and businesses, which are necessary to maintaining the vitality of California’s economy.
(2) Consistent with Sections 913.4, 961, and 977, an adequately sized workforce of experienced electric and gas utility employees with the appropriate training and skills, as well as the knowledge of an electric or gas utility’s facilities and equipment, is essential to the safe, efficient, and uninterrupted provision of electrical and gas services. Safe and reliable electric and gas utility service is vital to public health, public safety, air quality, and reducing emissions of greenhouse gases.
(3) Changes in the ownership or control of an electrical corporation or gas corporation may create uncertainty regarding the safe, efficient, and continuous provision of safe and reliable electrical and gas service to California consumers, leading to economic instability.
(4) Mass displacement of electrical corporation or gas corporation workers as a result of a change in the ownership or control of an electrical corporation or gas corporation causes excessive reliance on the unemployment insurance system, and public social services and health programs, increasing costs to these vital governmental programs and placing a significant burden on the state and California taxpayers.
(5) The state has a compelling interest in ensuring that when there is a change in the ownership or control of an electrical corporation or gas corporation, the new employer maintains a qualified and knowledgeable workforce with the ability to ensure safe, efficient, reliable, and continuous service to California consumers and communities.
(6) Because of destructive and deadly wildfires and gas pipeline explosions, the electric and gas industries are in an unprecedented state of instability. One combined electrical and gas corporation has sought bankruptcy protection. All the major electrical corporations have had their credit ratings lowered to junk bond status or are at risk of downgrades to junk bond status. This jeopardizes the ability of these corporations to provide safe and reliable electric and gas service, to reduce the risk of future catastrophes, to provide service at just and reasonable rates, to meet the state’s mandates to reduce carbon emissions, and to address the risks of climate change.
(7) There is a nationwide shortage of the qualified utility line workers and qualified line clearance tree trimmers needed to prevent and respond to wildfires, storms, and other major events. Because this work is performed on and near high voltage lines and other energized electrical equipment, these jobs require substantial training and are highly dangerous. Current efforts to hire enough qualified people to perform these functions have fallen short even though exceptional compensation packages are being offered. Any reduction in the number or qualifications of these employees would increase the risk to employees and the risk of future catastrophic wildfires, and would increase the frequency and duration of outages, particularly as a result of more common and more severe major storms. It is in the interest of the state and its citizens that utilities have the qualified workforce necessary to minimize the risk of future wildfires, to minimize future outages, and to restore service as promptly as possible after storms.
(8) For the reasons provided in this subdivision, the Legislature must take action to stabilize the utility workforce so as to preserve the ability of utilities to provide safe and reliable electric and gas service. This requires that the size of the workforce be preserved or increased, and workers not be lost to other utilities offering more stable employment or better compensation.
(b) For purposes of this section, the following definitions shall apply:
(1) “Change of control” means any of the following:
(A) An event that triggers the application of Section 851 or 854.
(B) A material change in ownership of the electric corporation or gas corporation, its parent company, or its holding company.
(C) A filing seeking bankruptcy protection.
(D) The sale of all or a material portion of the assets of the electrical corporation or gas corporation, its parent company, or its holding company, or any merger, consolidation, or acquisition of the electrical corporation or gas corporation, its parent company, or its holding company with, by, or into another corporation, entity, or person.
(E) In the case of a combined electrical and gas corporation, the change in ownership of all or a substantial portion of either the gas or electric line of business of the combined corporation.
(F) A voluntary or involuntary change in ownership of assets from an electrical or gas corporation to ownership by a public entity.
(2) (A) “Covered employee” means an individual who has been employed by an electrical corporation or gas corporation for at least 90 days immediately before a change of control affecting that individual’s principal place of employment. A change of control affects a covered employee’s principal place of employment where the change of control results in the predecessor employer transferring control of the place of employment to the successor employer.
(B) “Covered employee” does not include any of the following:
(i) A managerial, supervisory, or confidential employee.
(ii) A temporary employee.
(iii) A part-time employee who has worked less than 20 hours per week for the predecessor employer for at least 90 days immediately before the change of control.
(3) “Person” means a corporation as defined in Section 204, a person as defined in Section 205, any other individual, corporation, partnership, limited partnership, limited liability partnership, limited liability company, business trust, estate, trust, association, joint venture, agency, instrumentality, or any other legal or commercial entity, whether domestic or foreign.
(4) “Predecessor employer” means the person who controls the electric or gas utility before the change of control.
(5) “Principal place of employment” of an employee means the office or other facility of the electrical corporation or gas corporation where the employee is principally assigned to work by the predecessor employer.
(6) “Successor employer” means the person who controls the electrical corporation or gas corporation after the change of control.
(7) “Total compensation” means the combined value of the covered employee’s wages and benefits immediately before the change of control. Total compensation may be paid entirely as wages or in any combination of wages and fringe benefits, to be determined by the successor employer. Total compensation includes, but is not necessarily limited to, both of the following amounts:
(A) The covered employee’s hourly wage rate or the per diem value of the covered employee’s monthly salary.
(B) Employer payments toward the covered employee’s health and welfare and pension benefits. Employer payments toward health and welfare and pension benefits shall include only those payments that are recognized as employer payments under paragraphs (1) and (2) of subdivision (b) of Section 1773.1 of the Labor Code.
(8) “Transition period” means a period of 180 days immediately following the effective date of a change of control.
(c) (1) Except as otherwise provided in this section, a successor employer shall retain all covered employees for at least the transition period following a change of control, unless the commission approves a reduction in the workforce pursuant to subdivision (i). During the transition period, the successor employer shall not reduce the total compensation of a covered employee.
(2) During the transition period, a successor employer shall not terminate a covered employee without cause.
(d) (1) No later than 15 days before the effective date of a change of control, the predecessor employer shall do both of the following:
(A) Cause to be posted, in a conspicuous place in a manner that is readily viewed by covered employees, a public notice of the change of control at each principal place of employment of any covered employee.
(B) Cause the notice to be sent to any labor organization that represents covered employees.
(2) The notice shall include the name of the predecessor employer and its contact information, the name of the successor employer and its contact information, and the effective date of the change of control. The notice shall be posted in a conspicuous place in a manner that is readily viewed by covered employees.
(e) This part shall not be construed to limit the right of covered employees to bring legal action for wrongful termination.
(f) The rights and remedies provided pursuant to this section are in addition to, and are not intended to supplant, any existing rights or remedies.
(g) No later than 15 days before the effective date of a change of control, a predecessor employer shall provide to the successor employer the name, address, date of hire, total compensation, and classification of each covered employee.
(h) A successor employer shall retain the following written or electronic records for at least three years:
(1) The list provided to the successor employer pursuant to subdivision (g).
(2) Any offer of employment made to a covered employee.
(3) Any termination of a covered employee during a transition period, including the reasons for the termination.
(4) Any written evaluation of a covered employee.
(i) For three years after the transition period and subject to the provisions of any existing collective bargaining agreement, a successor employer shall provide to employees who would have qualified as covered employees had they been employed during the 90-day period immediately before a change of control no less than the wages, hours, and other terms and conditions of employment provided before the change of control, including any previously negotiated increase in wages, and shall maintain no less than the total number of employees who would have qualified as covered employees had they been employed during the 90-day period immediately before a change of control. The successor employer may reduce the wages, hours, and other terms and conditions of employment or the total number of employees in a manner inconsistent with collective bargaining agreements only if authorized by the commission in a final, nonappealable decision. The commission shall not provide this authorization except on proof by a preponderance of the evidence in an application proceeding of all of the following:
(1) Neither the nature nor scope of the work performed by those employees proposed to be eliminated is necessary to providing safe and reliable utility service. The electrical corporation or gas corporation shall provide an independent third-party study to support its position. Other parties to the proceeding shall be provided with an opportunity to conduct their own studies.
(2) The proposed new wages, hours, and other terms and conditions of employment shall be consistent with wages, hours, and other terms for California electrical corporations and gas corporations. The electrical corporation or gas corporation shall provide an independent third-party study to support its position. Other parties to the proceeding shall be provided an opportunity to conduct their own studies.
(3) There will be no reduction in the ability of employees of the electrical or gas corporation to prevent damage from or to respond to an emergency such as a wildfire, storm, flood, mudslide, or earthquake, or to gas leaks, electric outages, interconnection requests, work requested by others, locate and mark requests, or other utility services.
(4) There will be no reduction in the ability of the electrical corporation or gas corporation to respond to mutual aid requests of other utilities.
(j) A successor employer may terminate an employee with cause consistent with any applicable selective bargaining agreement during the period specified in subdivision (i).
(k) A successor employer and a labor organization representing covered employees may, in a collective bargaining agreement, provide that the agreement supersedes the requirements of this section with respect to the represented employees.
(l) The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

SEC. 32.

 Section 895 of the Public Utilities Code is amended to read:

895.
 Notwithstanding Section 13340 of the Government Code, moneys in the Gas Consumption Surcharge Fund are continuously appropriated, without regard to fiscal years, as follows:
(a) To the commission or an entity designated by the commission to fund programs described in subdivision (a) of Section 890. If the commission designates the Energy Commission to receive funds for public interest research and development, both of the following shall apply:
(1) The Controller shall transfer funds to a separate subaccount within the Public Interest Research, Development, and Demonstration Fund to pay the Energy Commission for its costs in carrying out its duties and responsibilities under this article.
(2) The Energy Commission may administer the program pursuant to Chapter 7.1 (commencing with Section 25620) of Division 15 of the Public Resources Code.
(b) To pay the commission for its costs in carrying out its duties and responsibilities under this article.
(c) To pay the State Board of Equalization for its costs in administering this article.

SEC. 33.

 Section 1701.8 of the Public Utilities Code is amended to read:

1701.8.
 (a) For purposes of this section, the following definitions apply:
(1) “Covered wildfire” means any wildfire ignited on or after July 12, 2019, caused by an electrical corporation as determined by the governmental agency responsible for determining causation.
(2) “Wildfire Fund” means the Wildfire Fund created pursuant to Section 3284.
(b) The following procedures and standards apply to a catastrophic wildfire proceeding:
(1) (A) An electrical corporation may file an application pursuant to Section 451 or 451.1, as applicable, at any time after it has paid, or entered into binding commitments to pay, all or, if authorized by the commission for good cause, substantially all third-party damage claims, including payments made pursuant to judgments or settlement agreements related to a covered wildfire. Except as authorized by the commission for good cause, before filing the application, the electrical corporation shall exhaust all rights to indemnification or other claims, contractual or otherwise, against any third parties, including collecting insurance proceeds, related to the covered wildfire.
(B) If an electrical corporation has received payments from the Wildfire Fund for a third-party damage claim for the covered wildfire, the electrical corporation shall file an application to recover the costs pursuant to subparagraph (A) no later than the earlier of the following:
(i) The date when it has resolved all third-party damage claims and exhausted all right to indemnification or other claims, contractual or otherwise, against any third parties, including collecting insurance proceeds, related to the covered wildfire.
(ii) The date that is 45 days after the date the administrator requests the electrical corporation to make such an application.
(2) The president of the commission, upon the initiation of a catastrophic wildfire proceeding by the filing of an application pursuant to paragraph (1), shall assign a commissioner to act as the presiding officer in the proceeding and an administrative law judge to assist in conducting the proceeding.
(3) Within 15 days of the filing date of the application, the commission shall notice a prehearing conference, which shall be held within 25 days of the filing date.
(4) (A) Within 30 days of the filing date of the application, the assigned commissioner shall prepare and issue, by order or ruling, a scoping memorandum that states that the scope of the proceeding shall be whether the electrical corporation’s costs and expenses for the covered wildfire are just and reasonable pursuant to Section 451 or 451.1, as applicable.
(B) The scoping memorandum shall establish a schedule for the proceeding, including the date of issuance of a proposed decision that is no later than 12 months after the filing date of the application.
(C) The assigned commissioner may extend the time established in the scoping memorandum for the date of issuance of a proposed decision by up to six months upon a showing of good cause.
(5) Notwithstanding any other law, the commission may meet in closed session at any point during the pendency of the catastrophic wildfire proceeding with a three-day notice to the public if the commission establishes a quiet period pursuant to paragraph (6) of subdivision (h) of Section 1701.3.

SEC. 34.

 Section 1822 of the Public Utilities Code is amended to read:

1822.
 (a) Any computer model that is the basis for any testimony or exhibit in a hearing or proceeding before the commission shall be available to, and subject to verification by, the commission and parties to the hearing or proceedings to the extent necessary for cross-examination or rebuttal, subject to applicable rules of evidence, except that verification is not required for any electricity demand model or forecast prepared by the Energy Commission pursuant to Section 25309 or 25402.1 of the Public Resources Code and approved and adopted after a hearing during which testimony was offered subject to cross-examination. The commission shall afford each of these electricity demand models or forecasts the evidentiary weight it determines appropriate. Nothing in this subdivision requires the Energy Commission to approve or adopt any electricity demand model or forecast.
(b) Any testimony presented in a hearing or proceeding before the commission that is based in whole, or in part, on a computer model shall include a listing of all the equations and assumptions built into the model.
(c) Any database that is used for any testimony or exhibit in a hearing or proceeding before the commission shall be reasonably accessible to the commission staff and parties to the hearing or proceeding to the extent necessary for cross-examination or rebuttal, subject to applicable rules of evidence, as applied in commission proceedings.
(d) The commission shall adopt rules and procedures to meet the requirements specified in subdivisions (a), (b), and (c). These rules shall include procedural safeguards that protect databases and models not owned by the public utility.
(e) The commission shall establish appropriate procedures for determining the appropriate level of compensation for a party’s access.
(f) Each party shall have access to the computer programs and models of each other party to the extent provided by Section 1822. The commission shall not require a utility to provide a remote terminal or other direct physical link to the computer systems of a utility to a third party.
(g) The commission shall verify, validate, and review the computer models of any electrical corporation that are used for the purpose of planning, operating, constructing, or maintaining the corporation’s electrical transmission system, and that are the basis for testimony and exhibits in hearings and proceedings before the commission.
(h) The transmission computer models shall be available to, and subject to verification by, each party to a commission proceeding in accordance with subdivision (a) of Section 1822, and regulations adopted pursuant to subdivision (d) of Section 1822.

SEC. 35.

 Section 2774.6 of the Public Utilities Code is amended to read:

2774.6.
 The commission, in consultation with the Energy Commission, shall develop a program for residential and commercial customer air-conditioning load control, as an element of each electrical corporation’s tariffed service offerings paid for with electrical service rates. The goal of the program shall be to contribute to the adequacy of electricity supply and to help customers reduce their electrical service bills in a cost-effective manner. The program may include peak load reduction programs for residential and commercial air-conditioning systems, if the commission determines that the inclusion would be cost effective.

SEC. 36.

 Section 2840.2 of the Public Utilities Code is amended to read:

2840.2.
 For purposes of this article, the following terms have the following meanings:
(a) “Combined heat and power system” means a system that produces both electricity and thermal energy for heating or cooling from a single fuel input that meets all of the following:
(1) Is interconnected to, and operates in parallel with, the electrical transmission and distribution grid.
(2) Is sized to meet the eligible customer-generator’s onsite thermal demand.
(3) Meets the efficiency standards of subdivisions (a) and (d) of, and the greenhouse gases emissions performance standard of subdivision (f) of, Section 2843.
(b) “Eligible customer-generator” means a customer of an electrical corporation that meets both of the following requirements:
(1) Uses a combined heat and power system with a generating capacity of not more than 20 megawatts, that first commences operation on or after January 1, 2008.
(2) Uses a time-of-use meter capable of registering the flow of electricity in two directions. If the existing electrical meter of an eligible customer-generator is not capable of measuring the flow of electricity in two directions, the eligible customer-generator shall be responsible for all expenses involved in purchasing and installing a meter that is able to measure electricity flow in two directions. If an additional meter or meters are installed, the electricity flow calculations shall yield a result identical to that of a time-of-use meter.
(c) “Excess electricity” means the net electricity exported to the electrical grid, generated by a combined heat and power system that is in compliance with Section 2843.
(d) “Greenhouse gas” or “greenhouse gases” includes all of the following gases: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride.

SEC. 37.

 Section 2854 of the Public Utilities Code is amended to read:

2854.
 (a) In order to further the state goal of encouraging the installation of 3,000 megawatts of photovoltaic solar energy in California within 10 years, the governing body of a local publicly owned electric utility that sells electricity at retail, shall adopt, implement, and finance a solar initiative program, funded in accordance with subdivision (b), for the purpose of investing in, and encouraging the increased installation of, residential and commercial solar energy systems.
(b) On or before January 1, 2008, a local publicly owned electric utility shall offer monetary incentives for the installation of solar energy systems of at least two dollars and eighty cents ($2.80) per installed watt, or for the electricity produced by the solar energy system, measured in kilowatthours, as determined by the governing board of a local publicly owned electric utility, for photovoltaic solar energy systems. The incentive level shall decline each year thereafter at a rate of no less than an average of 7 percent per year.
(c) A local publicly owned electric utility shall initiate a public proceeding to fund a solar energy program to adequately support the goal of installing 3,000 megawatts of photovoltaic solar energy in California. The proceeding shall determine what additional funding, if any, is necessary to provide the incentives pursuant to subdivision (b). The public proceeding shall be completed and the comprehensive solar energy program established by January 1, 2008.
(d) The solar energy program of a local publicly owned electric utility shall be consistent with all of the following:
(1) That a solar energy system receiving monetary incentives comply with the eligibility criteria, design, installation, and electrical output standards or incentives established by the Energy Commission pursuant to Section 25782 of the Public Resources Code.
(2) That solar energy systems receiving monetary incentives are intended primarily to offset part or all of the consumer’s own electricity demand.
(3) That all components in the solar energy system are new and unused, and have not previously been placed in service in any other location or for any other application.
(4) That the solar energy system has a warranty of not less than 10 years to protect against defects and undue degradation of electrical generation output.
(5) That the solar energy system be located on the same premises of the end-use consumer where the consumer’s own electricity demand is located.
(6) That the solar energy system be connected to the local publicly owned electric utility’s electrical distribution system within the state.
(7) That the solar energy system has meters or other devices in place to monitor and measure the system’s performance and the quantity of electricity generated by the system.
(8) That the solar energy system be installed in conformance with the manufacturer’s specifications and in compliance with all applicable electrical and building code standards.
(e) In establishing the program required by this section, no moneys shall be diverted from any existing programs for low-income ratepayers, or from cost-effective energy efficiency or demand response programs.
(f) The statewide expenditures for solar programs adopted, implemented, and financed by local publicly owned electric utilities shall be seven hundred eighty-four million dollars ($784,000,000). The expenditure level for each local publicly owned electric utility shall be based on that utility’s percentage of the total statewide load served by all local publicly owned electric utilities. Expenditures by a local publicly owned electric utility may be less than the utility’s cap amount, provided that funding is adequate to provide the incentives required by subdivisions (a) and (b).

SEC. 38.

 Section 3280 of the Public Utilities Code is amended to read:

3280.
 For purposes of this part, the following definitions apply:
(a) “Administrator” means the Wildfire Fund Administrator appointed pursuant to Section 8899.72 of the Government Code.
(b) “Annual contribution” means either of the following:
(1) For an electrical corporation that qualifies as a large electrical corporation at the end of the prior calendar year, an amount equal to three hundred million dollars ($300,000,000) multiplied by the Wildfire Fund allocation metric.
(2) For an electrical corporation that qualifies as a regional electrical corporation at the end of the prior calendar year, an amount equal to twenty-five dollars ($25) multiplied by the number of customer accounts serviced by the electrical corporation within the state at the end of that calendar year.
(c) “Council” means the California Catastrophe Response Council created pursuant to Section 8899.70 of the Government Code.
(d) “Covered wildfire” has the same meaning as set forth in Section 1701.8.
(e) “Electrical corporation” has the same meaning as set forth in Section 218.
(f) “Eligible claims” means claims for third-party damages against an electrical corporation resulting from covered wildfires exceeding the greater of (1) one billion dollars ($1,000,000,000) in the aggregate in any calendar year, or (2) the amount of the insurance coverage required to be in place for the electrical corporation pursuant to Section 3293, measured by the amount of that excess.
(g) “Fund” means the Wildfire Fund created pursuant to Section 3284.
(h) “High fire-threat district” means areas identified as tier 2 (elevated) or tier 3 (extreme) fire risk on the fire-threat map maintained by the commission.
(i) “Initial contribution” means either of the following:
(1) For a large electrical corporation, an amount equal to seven billion five hundred million dollars ($7,500,000,000) multiplied by the Wildfire Fund allocation metric.
(2) For a regional electrical corporation, an amount equal to six hundred twenty-five dollars ($625) multiplied by the number of customer accounts serviced by the electrical corporation within the state as of July 12, 2019.
(j) “Insolvency proceeding” means a bankruptcy, insolvency, liquidation, reorganization, or similar proceeding brought pursuant to Title 11 of the United States Code.
(k) “Large electrical corporation” means an electrical corporation with 250,000 or more customer accounts within the state.
(l) “Participating electrical corporation” means an electrical corporation that satisfies the conditions to participate in the fund pursuant to Section 3291 or 3292, as applicable.
(m) “Regional electrical corporation” means an electrical corporation with less than 250,000 customer accounts within the state.
(n) “Wildfire Fund allocation metric” means, for each large electrical corporation, the arithmetic average of (1) the land area of the electrical corporation’s territory, measured in square miles, in the high fire-threat districts as a proportion of all large electrical corporations’ territory in the high fire-threat districts and (2) the electrical corporation’s line miles of transmission and distribution lines in the high fire-threat districts as a proportion of all large electrical corporations’ line miles of transmission and distribution lines in the high fire-threat districts. The large electrical corporations’ averages shall then be adjusted to account for risk mitigation efforts. This adjustment shall reduce the allocation to electrical corporations that have invested historically in mitigation efforts and those allocations shall be reallocated to the other electrical corporations based on their proportionate share resulting from the initial calculation above. The Wildfire Fund allocation metric shall be determined by the Director of Finance no later than July 17, 2019. It is the expectation of the Legislature that the Wildfire Fund allocation metric is 64.2 percent for Pacific Gas and Electric Company, 31.5 percent for Southern California Edison Company, and 4.3 percent for San Diego Gas and Electric Company. If a new electrical corporation that is a large electrical corporation is admitted to the Wildfire Fund, the administrator shall promptly determine and publish a revised Wildfire Fund allocation metric based on the factors set forth in this subdivision.
(o) “Wildfire Fund assets” means the sum of all moneys and invested assets held in the fund which shall include, without limitation, any loans or other investments made by the state to the fund, all interest or other income from the investment of money held in the fund, any other funds specifically designated for the fund by applicable law, the proceeds of any special charge (or continuation of existing charge) allocated to and deposited into the fund, reinsurance, and the proceeds of any bonds issued for the benefit of the fund.

SEC. 39.

 Section 3281 of the Public Utilities Code is amended to read:

3281.
 The administrator shall carry out the duties of this part and may do all of the following, subject to the oversight of the council:
(a) Retain, employ, or contract with officers, experts, employees, accountants, actuaries, financial professionals, and other executives, advisers, consultants, attorneys, and professionals as may be necessary in the administrator’s judgment for the efficient operation and administration of the fund.
(b) Enter into contracts and other obligations relating to the operation, management, and administration of the fund.
(c) Invest the moneys in the fund in those securities eligible under Section 16430 of the Government Code.
(d) Review and approve claims and settlements, and provide funds to the participating electrical corporations for the purposes of paying eligible claims.
(e) Buy insurance or take other actions to maximize the claims-paying resources of the fund.
(f) Pay costs, expenses, and other obligations of the fund from Wildfire Fund assets.
(g) Take any actions necessary to collect any amounts owing to the fund from participating electrical corporations.
(h) Undertake such other activities as are related to the operation, management, and administration of the fund, as approved by the council.

SEC. 40.

 Section 3282 of the Public Utilities Code is amended to read:

3282.
 There shall be a limited civil immunity, and no criminal liability in a private capacity, on account of any act performed or omitted or obligation entered into in an official capacity, when done or omitted in good faith and without intent to defraud, on the part of the counsel, the administrator, or on the part of any officer, employee, or agent of the fund. The State of California shall have no liability for payment of claims in excess of funds available pursuant to this part. The State of California, and any of the funds of the State of California, shall have no obligations whatsoever for payment of claims or costs arising from this part, except as specifically provided in this part.

SEC. 41.

 Section 3283 of the Public Utilities Code is amended to read:

3283.
 The council shall direct the administrator to prepare and present for approval a plan of operations related to the operations, management, and administration of the fund on an annual basis. At least annually, the council shall direct the administrator to present the plan of operations to the appropriate policy committees of the Legislature. The plan shall include, but not be limited to, reporting on the Wildfire Fund assets, projections for the durability of the fund, the success of the fund, whether or not the fund is serving its purpose, and a plan for winding up the fund if projections demonstrate that the fund will be exhausted within the next three years.

SEC. 42.

 Section 3288 of the Public Utilities Code is amended to read:

3288.
 (a) If Section 3291 is operative, the Director of Finance, in consultation with the Treasurer and the administrator, shall determine the amount and timing of moneys needed to support the purposes of this part. The Director of Finance shall request those moneys from the Controller. Upon that request, the Controller shall transfer up to ten billion five hundred million dollars ($10,500,000,000) to the fund from the Surplus Money Investment Fund and other funds that accrue interest to the General Fund as a cash loan. The loan principal and interest shall be fully repaid as provided in subdivision (b) of Section 80550 of the Water Code.
(b) If Section 3292 is operative, the Director of Finance, in consultation with the Treasurer and the administrator, shall determine a schedule to provide ten billion five hundred million dollars ($10,500,000,000) to the fund and shall provide that schedule to the Controller within 60 days. The Controller shall transfer the moneys from the Surplus Money Investment Fund and other funds that accrue interest to the General Fund pursuant to the schedule provided by the Director of Finance as a loan to support the purposes of this part. The loan from the Surplus Money Investment Fund is intended to provide necessary cash on a short-term basis for claims-paying resources. It is the intent of the Legislature that the loan be repaid as quickly as possible within a fiscal year. The loan shall be repaid by the proceeds of the charges authorized pursuant to subparagraph (A) of paragraph (1) of subdivision (a) of Section 3289 or the proceeds of any bonds as set forth in Division 28 (commencing with Section 80500) of the Water Code.
(c) In the case of subdivision (a) or (b), interest payments on outstanding loan amounts shall be calculated at the greater of the quarter-to-date yield at the one-year constant maturity United States Treasury rate for the calendar quarter concluded directly before the calculation or the Surplus Money Investment Fund rate at the time of the cash transfer. The interest payments shall be paid on a quarterly basis from Wildfire Fund assets following the cash transfer and shall continue until the loan has been fully repaid. The interest payments are interest earnings of the Surplus Money Investment Fund and shall be apportioned pursuant to Sections 16475 and 16480.6 of the Government Code.
(d) Whether Section 3291 or 3292 is operative, an initial transfer to the fund of no less than two billion dollars ($2,000,000,000) shall be made in the 2019–20 fiscal year.
(e) Prior to a transfer being made from the Surplus Money Investment Fund pursuant to subdivision (a) or (b), the Director of Finance shall determine if the transfer would result in the General Fund’s estimated cash and unused borrowable resources declining below three billion dollars ($3,000,000,000) at any point in time over the succeeding 24-month period. If the Director of Finance determines that the transfer would result in estimated cash and unused borrowable resources declining below that level, the transfer of funds from the Surplus Money Investment Fund shall not be made. This subdivision shall not apply to the first two billion dollars ($2,000,000,000) of transfers made in the 2019–20 fiscal year.

SEC. 43.

 Section 3289 of the Public Utilities Code is amended to read:

3289.
 (a) (1) No later than July 26, 2019, the commission shall initiate a rulemaking proceeding to consider using its authority pursuant to Section 701 to require each electrical corporation, except a regional electrical corporation that chooses not to participate in any fund pursuant to Chapter 3 (commencing with Section 3291), to collect a nonbypassable charge from ratepayers of the electrical corporation to support the fund, including the payment of any bonds issued pursuant to Division 28 (commencing with Section 80500) of the Water Code, as follows:
(A) For a large electrical corporation, a charge in an amount sufficient to fund the revenue requirement, as established pursuant to Section 80524 of the Water Code.
(B) For a regional electrical corporation, the amount equal to one-half cent per kilowatt-hour ($0.005/kWh).
(2) If the commission determines that the imposition of the charge described in paragraph (1) is just and reasonable, and that it is appropriate to exercise its authority pursuant to Section 701 to do so, the commission shall direct each electrical corporation to impose and collect that charge commencing in the month immediately following the month in which the final imposition of the revenue requirement with respect to bonds previously issued pursuant to Division 27 (commencing with Section 80000) of the Water Code is made. The charge shall be collected in the same manner as that for the payments made to reimburse the Department of Water Resources pursuant to Division 27 (commencing with Section 80000) of the Water Code.
(b) Notwithstanding any other law, no later than 90 days after the initiation of the rulemaking proceeding, the commission shall adopt a decision regarding the imposition of the charge.
(c) Notwithstanding Section 455.5 or 1708, or any other law, the commission shall not revise, amend, or otherwise modify a decision to impose a charge made pursuant to this section at any time prior to January 1, 2036.

SEC. 44.

 Section 3291 of the Public Utilities Code is amended to read:

3291.
 (a) The fund shall be established as a revolving liquidity fund that will pay eligible claims as provided in subdivision (c) and obtain reimbursement from electrical corporations as set forth in subdivision (d).
(b) Except as provided in subdivision (e), to participate in the fund established pursuant to subdivision (a), an electrical corporation must meet the following conditions by no later than June 30, 2020:
(1) The electrical corporation is not, and has not been since July 12, 2019, the subject of an insolvency proceeding or on criminal probation unless the electrical corporation meets the following conditions:
(A) The electrical corporation’s insolvency proceeding has been resolved pursuant to a plan or similar document not subject to a stay.
(B) The bankruptcy court or a court of competent jurisdiction, in the insolvency proceeding, has determined that the resolution of the insolvency proceeding provides funding or establishes reserves for, provides for assumption of, or otherwise provides for satisfying any prepetition wildfire claims asserted against the electrical corporation in the insolvency proceeding in the amounts agreed upon in any pre-insolvency proceeding settlement agreements or any post-insolvency settlement agreements, authorized by the court through an estimation process or otherwise allowed by the court.
(C) The commission has approved the reorganization plan and other documents resolving the insolvency proceeding, including the electrical corporation’s resulting governance structure, as being acceptable in light of the electrical corporation’s safety history, criminal probation, recent financial condition, and other factors deemed relevant by the commission.
(D) The commission has determined that the reorganization plan and other documents resolving the insolvency proceeding are (i) consistent with the state’s climate goals as required pursuant to the California Renewables Portfolio Standard Program and related procurement requirements of the state and (ii) neutral, on average, to the ratepayers of the electrical corporation.
(E) The commission has determined that the reorganization plan and other documents resolving the insolvency proceeding recognize the contributions of ratepayers, if any, and compensate them accordingly through mechanisms approved by the commission, which may include sharing of value appreciation.
(2) For a regional electrical corporation, it shall have requested to participate and have established a charge required by the commission pursuant to Section 3289. The charge shall be included on monthly bills for customers. Collections on that charge shall be remitted, on a monthly basis, to the administrator for deposit into the fund.
(c) A participating electrical corporation may seek payment from the fund to satisfy settled or finally adjudicated eligible claims. Only eligible claims shall be made against or paid by the fund. In accordance with the procedures established by the administrator, the administrator shall review and approve any settlement of an eligible claim as being in the reasonable business judgment of the electrical corporation before releasing funds to the electrical corporation for payment. To the extent approved by the administrator, the settlement shall not be subject to further review by the commission.
(d) Within six months after the commission adopts a decision in an application filed pursuant to Section 1701.8, the electrical corporation shall reimburse the fund for the full amount of payments received from the fund. The electrical corporation may recover in rates those costs and expenses allowed by the commission pursuant to Section 451 or 451.1, as applicable.
(e) The administrator may authorize an electrical corporation that is formed after July 12, 2019, to participate in the fund if the administrator determines that the electrical corporation meets the requirements of this section, other than the requirement that the conditions be met by June 30, 2020. The authorization shall be effective as of a date determined by the administrator and shall apply to covered wildfires after the date of authorization.
(f) The fund shall terminate when the administrator determines that the fund is no longer necessary to serve the purposes of this part. Upon the determination of the administrator that the fund shall be terminated, the administrator shall pay all remaining eligible claims and fund expenses, liquidate any remaining assets, and refund the remaining funds to ratepayers.
(g) This section shall become inoperative upon timely payment of the initial contribution pursuant to Section 3292 by each large electrical corporation not subject to an insolvency proceeding on July 12, 2019, and is repealed on January 1 of the following year. The administrator shall notify the Secretary of State as to whether those payments were timely made.

SEC. 45.

 Section 3292 of the Public Utilities Code is amended to read:

3292.
 (a) If, no later than July 27, 2019, each large electrical corporation not subject to an insolvency proceeding on July 12, 2019, notifies the commission of its commitment to provide the initial contribution and the annual contributions, and subsequently provides its initial contribution as set forth in paragraph (3) of subdivision (b), the fund shall be established to pay eligible claims as set forth in subdivision (f) and obtain reimbursement from electrical corporations as set forth in subdivision (h).
(b) Except as provided in subdivision (d), to participate in the fund established pursuant to subdivision (a), an electrical corporation shall satisfy the following conditions by no later than June 30, 2020:
(1) The electrical corporation is not, and has not been since July 12, 2019, the subject of an insolvency proceeding or on criminal probation unless the electrical corporation meets the following conditions:
(A) The electrical corporation’s insolvency proceeding has been resolved pursuant to a plan or similar document not subject to a stay.
(B) The bankruptcy court or a court of competent jurisdiction, in the insolvency proceeding, has determined that the resolution of the insolvency proceeding provides funding or establishes reserves for, provides for assumption of, or otherwise provides for satisfying any prepetition wildfire claims asserted against the electrical corporation in the insolvency proceeding in the amounts agreed upon in any pre-insolvency proceeding settlement agreements or any post-insolvency settlement agreements, authorized by the court through an estimation process or otherwise allowed by the court.
(C) The commission has approved the reorganization plan and other documents resolving the insolvency proceeding, including the electrical corporation’s resulting governance structure as being acceptable in light of the electrical corporation’s safety history, criminal probation, recent financial condition, and other factors deemed relevant by the commission.
(D) The commission has determined that the reorganization plan and other documents resolving the insolvency proceeding are (i) consistent with the state’s climate goals as required pursuant to the California Renewables Portfolio Standard Program and related procurement requirements of the state and (ii) neutral, on average, to the ratepayers of the electrical corporation.
(E) The commission has determined that the reorganization plan and other documents resolving the insolvency proceeding recognize the contributions of ratepayers, if any, and compensate them accordingly through mechanisms approved by the commission, which may include sharing of value appreciation.
(2) For a regional electrical corporation, it has voluntarily established a charge required by the commission pursuant to Section 3289. This charge shall be included on monthly bills for customers. Collections on that charge shall be remitted, on a monthly basis, to the administrator for deposit into the fund.
(3) Except as provided in subdivision (e), the electrical corporation has provided its initial contribution to the fund no later than September 10, 2019. Initial contributions shall not be recovered from the ratepayers of an electrical corporation.
(c) Each participating electrical corporation shall make its annual contribution by January 1 of each calendar year, including, without limitation, any annual contributions for calendar years in which the electrical corporation was not a participating electrical corporation. Annual contributions shall not be recovered from the ratepayers of an electrical corporation.
(d) The administrator may authorize an electrical corporation that is formed after July 12, 2019, to participate in the fund if the administrator determines that the electrical corporation meets the requirements of this section. Authorization of an electrical corporation that is formed after July 12, 2019, shall be effective as of a date determined by the administrator and shall apply to covered wildfires after the date of authorization.
(e) An electrical corporation that is the subject of an insolvency proceeding on July 12, 2019, that wishes to participate in the fund shall (1) no later than July 27, 2019, provide written notification to the commission of its election to participate in the fund, and (2) no later than September 10, 2019, obtain approval from the bankruptcy court or a court of competent jurisdiction of its determination to pay, and approval of its payment of, the initial contribution and, as they become due, annual contributions to the fund, provided that the contributions shall not be due to the fund until the date the electrical corporation exits the insolvency proceeding. The electrical corporation shall not be entitled to seek payments from the fund pursuant to subdivision (f) until it has funded its initial contribution and has met the other conditions provided in subdivision (b). Participation of an electrical corporation that is the subject of an insolvency proceeding that satisfies the requirements of this subdivision shall be effective as of July 12, 2019, and shall apply to covered wildfires, provided that the fund shall not pay more than 40 percent of the allowed amount of a claim arising between July 12, 2019, and the date the electrical corporation exits bankruptcy, with the balance of those claims being addressed through the insolvency proceeding.
(f) (1) An electrical corporation meeting the applicable requirements of subdivision (b) may seek payment from the fund to satisfy settled or finally adjudicated eligible claims. Only eligible claims shall be made against or paid by the fund. In accordance with the procedures established by the administrator, the administrator shall review and approve any settlement of an eligible claim as being in the reasonable business judgment of the electrical corporation before releasing funds to the electrical corporation for payment. Settlements of subrogation claims that are less than or equal to 40 percent of total asserted claim value as determined by the administrator shall be paid unless the administrator finds that the exceptional facts and circumstances surrounding the underlying claim do not justify the electrical corporation’s exercise of such business judgment. To the extent approved by the administrator, a settlement shall not be subject to further review by the commission.
(2) The administrator shall approve a settlement of an eligible claim that is a subrogation claim if the settlement exceeds 40 percent of the total asserted claim value, as determined by the administrator, and includes a full release of the balance of the asserted claim so long as the administrator finds that the electrical corporation exercised its reasonable business judgment in determining to settle for a higher percentage or on different terms based on a determination that the specific facts and circumstances surrounding the underlying claim justify a higher settlement percentage or different terms. A subrogation claim that is finally adjudicated shall be paid in the full judgment amount.
(g) All initial and annual contributions shall be excluded from the measurement of the authorized capital structure.
(h) (1) Except as provided in paragraph (2), within six months after the commission adopts a decision in an application filed pursuant to Section 1701.8, the electrical corporation shall reimburse the fund for the full amount of costs and expenses the commission determined were disallowed pursuant to Section 1701.8.
(2) (A) The obligation of an electrical corporation to reimburse the fund shall be the lesser amount of subparagraph (B) or (C).
(B) The costs and expenses disallowed pursuant to Section 1701.8.
(C) The amount determined pursuant to clause (i) minus the amount determined pursuant to clause (ii).
(i) Twenty percent of the electrical corporation’s total transmission and distribution equity rate base, including, but not limited to, its Federal Energy Regulatory Commission (FERC) assets, as determined by the administrator for the calendar year in which the disallowance occurred.
(ii) The sum of (I) the amounts actually reimbursed to the fund for costs and expenses that were disallowed pursuant to Section 1701.8 during the measurement period, added to (II) the amount of any reimbursements to the fund owed by the electrical corporation for costs and expenses disallowed during the measurement period that have not yet been paid.
(iii) For purposes of this subparagraph, “measurement period” means the period of three consecutive calendar years ending on December 31 of the year in which the calculation is being performed.
(D) The administrator shall publish calculations of the amounts determined pursuant to subparagraphs (B) and (C) on or before January 1 of each calendar year for each electrical corporation.
(E) Except as provided in paragraph (3), the electrical corporation shall not be required to reimburse the fund for any additional amounts in any three-calendar-year period.
(F) The limitation set forth in this section shall apply only so long as the fund has not been terminated pursuant to subdivision (i).
(3) Paragraph (2) does not apply under either of the following circumstances:
(A) If the administrator determines that the electrical corporation’s actions or inactions that resulted in the covered wildfire constituted conscious or willful disregard of the rights and safety of others.
(B) If the electrical corporation fails to maintain a valid safety certification on the date of the ignition.
(i) (1) The administrator shall, to the extent practicable, manage the fund to prioritize the use of contributions of the electrical corporations before the use of contributions by ratepayers.
(2) The fund shall terminate when the administrator determines that the fund resources are exhausted, taking into account the amount of any unpaid liabilities including necessary reserves, any remaining unpaid annual contributions from participating electrical corporations, and the charges authorized pursuant to Section 3289. Upon the determination of the administrator that the fund shall be terminated, the administrator shall pay all remaining eligible claims and fund expenses, and liquidate any remaining assets. The remaining funds shall be transferred to the General Fund. It is the intent of the Legislature that any funds transferred to the General Fund pursuant to this paragraph shall be appropriated to support wildfire mitigation.
(j) Notwithstanding subdivision (f), a regional electrical corporation’s access to the fund to pay eligible claims shall be limited to three times the sum of the regional electrical corporation’s initial contribution and any funded annual contributions per covered wildfire.
(k) This section shall become inoperative if timely payment of the initial contribution is not made pursuant to paragraph (3) of subdivision (b) by each large electrical corporation not subject to an insolvency proceeding on July 12, 2019, and is repealed on the first January 1 more than three months after the initial contributions are due but not all paid. The administrator shall notify the Secretary of State as to whether those payments were timely made.

SEC. 46.

 Section 3295 of the Public Utilities Code is amended to read:

3295.
 (a) Except as provided in subdivision (b), within six months after the commission adopts a decision in an application filed pursuant to Section 1701.8, a governmental assessment shall be imposed in the full amount of, and the electrical corporation shall reimburse the fund for the full amount of, costs and expenses the commission determined were the amount of the obligation to reimburse the fund pursuant to subdivision (d) of Section 3291 or subdivision (h) of Section 3292 in a proceeding authorized pursuant to Section 1701.8.
(b) With respect to a governmental assessment pursuant to subdivision (a), the fund is granted a statutory lien on the revenues of an electrical corporation participating in the fund to secure the electrical corporation’s reimbursement obligations to the fund, which statutory lien shall be subordinated and junior in lien priority and right of payment to any lien, mortgage, or security interest securing any debt, note, indenture, lease, contract, or other obligation of the electrical corporation or a financing entity defined in Section 850 in existence on July 12, 2019, or thereafter authorized by the commission, including pursuant to subdivision (g) of Section 80542 of the Water Code; provided that no such lien shall be deemed to have been granted with respect to the revenues of an electrical corporation to the extent that the terms of any debt, note, indenture, lease, contract, or other obligation of the electrical corporation existing on July 12, 2019, prohibits the granting of the lien, or if a breach or default would occur thereunder as a result of the granting of the lien whether or not the breach or default is subject to the passage of time, notice requirements, or otherwise, it being understood that the lien will be deemed to have been automatically granted at the time that the prohibition no longer applies or no breach or default would occur. Subject to the immediately preceding sentence, the subordinated and junior statutory lien shall be automatically perfected without further action of the fund and shall apply regardless of whether the amounts are commingled with other cash or other property of the electrical corporation. The statutory lien granted pursuant to this section shall not attach to any real property of an electrical corporation.

SEC. 47.

 Section 3296 of the Public Utilities Code is amended to read:

3296.
 In addition to any rights and remedies of the administrator provided by law, the administrator is authorized at any time and from time to time, without notice to the participating electrical corporations, to set off and apply any and all funds, deposits, or contributions from a participating electrical corporation at any time held by the fund and other obligations owed to the fund, irrespective of whether or not the administrator made demand, and whether the obligations may be contingent or unmatured. The administrator will promptly notify the participating electrical corporation after any such setoff.

SEC. 48.

 Section 3297 of the Public Utilities Code is amended to read:

3297.
 Fund earnings are tax exempt and fund contributions by electrical corporations are tax deductible for state tax purposes.

SEC. 49.

 Section 8386.3 of the Public Utilities Code is amended to read:

8386.3.
 (a) The Wildfire Safety Division shall approve or deny each wildfire mitigation plan and update submitted by an electrical corporation within three months of its submission, unless the division makes a written determination, including reasons supporting the determination, that the three-month deadline cannot be met. Each electrical corporation’s approved plan shall remain in effect until the division approves the electrical corporation’s subsequent plan. The division shall consult with the Department of Forestry and Fire Protection on the review of each wildfire mitigation plan and update. In rendering its decision, the division shall consider comments submitted pursuant to subdivision (d) of Section 8386. Before approval, the division may require modifications of the plan. After approval by the division, the commission shall ratify the action of the division.
(b) The Wildfire Safety Division’s approval of a plan does not establish a defense to any enforcement action for a violation of a commission decision, order, or rule.
(c) Following approval of a wildfire mitigation plan, the Wildfire Safety Division shall oversee compliance with the plan consistent with the following:
(1) Three months after the end of an electrical corporation’s initial compliance period as established by the Wildfire Safety Division pursuant to subdivision (b) of Section 8386, and annually thereafter, each electrical corporation shall file with the division a report addressing its compliance with the plan during the prior calendar year.
(2) (A) Before March 1, 2021, and before each March 1 thereafter, the Wildfire Safety Division, in consultation with the Department of Forestry and Fire Protection, shall make available a list of qualified independent evaluators with experience in assessing the safe operation of electrical infrastructure.
(B) (i) Each electrical corporation shall engage an independent evaluator listed pursuant to subparagraph (A) to review and assess the electrical corporation’s compliance with its plan. The engaged independent evaluator shall consult with, and operate under the direction of, the Wildfire Safety Division of the commission. The independent evaluator shall issue a report on July 1 of each year in which a report required by paragraph (1) is filed. As a part of the independent evaluator’s report, the independent evaluator shall determine whether the electrical corporation failed to fund any activities included in its plan.
(ii) The Wildfire Safety Division shall consider the independent evaluator’s findings, but the independent evaluator’s findings are not binding on the division, except as otherwise specified.
(iii) The independent evaluator’s findings shall be used by the Wildfire Safety Division to carry out its obligations under Article 1 (commencing with Section 451) of Chapter 3 of Part 1 of Division 1.
(iv) The independent evaluator’s findings shall not apply to events that occurred before the initial plan is approved for the electrical corporation.
(3) The commission shall authorize the electrical corporation to recover in rates the costs of the independent evaluator.
(4) The Wildfire Safety Division shall complete its compliance review within 18 months after the submission of the electrical corporation’s compliance report.
(d) An electrical corporation shall not divert revenues authorized to implement the plan to any activities or investments outside of the plan.
(e) The commission shall not allow a large electrical corporation to include in its equity rate base its share, as determined pursuant to the Wildfire Fund allocation metric specified in Section 3280, of the first five billion dollars ($5,000,000,000) expended in aggregate by large electrical corporations on fire risk mitigation capital expenditures included in the electrical corporations’ approved wildfire mitigation plans. An electrical corporation’s share of the fire risk mitigation capital expenditures and the debt financing costs of these fire risk mitigation capital expenditures may be financed through a financing order pursuant to Section 850.1, subject to the requirements of that financing order.

SEC. 49.1.

 Section 8386.3 of the Public Utilities Code is amended to read:

8386.3.
 (a) The Wildfire Safety Division shall approve or deny each wildfire mitigation plan and update submitted by an electrical corporation within three months of its submission, unless the division makes a written determination, including reasons supporting the determination, that the three-month deadline cannot be met. Each electrical corporation’s approved plan shall remain in effect until the division approves the electrical corporation’s subsequent plan. The division shall consult with the Department of Forestry and Fire Protection on the review of each wildfire mitigation plan and update. In rendering its decision, the division shall consider comments submitted pursuant to subdivision (d) of Section 8386. Before approval, the division may require modifications of the plan. After approval by the division, the commission shall ratify the action of the division.
(b) The Wildfire Safety Division’s approval of a plan does not establish a defense to any enforcement action for a violation of a commission decision, order, or rule.
(c) Following approval of a wildfire mitigation plan, the Wildfire Safety Division shall oversee compliance with the plan consistent with the following:
(1) Three months after the end of an electrical corporation’s initial compliance period as established by the Wildfire Safety Division pursuant to subdivision (b) of Section 8386, and annually thereafter, each electrical corporation shall file with the division a report addressing its compliance with the plan during the prior calendar year.
(2) (A) Before March 1, 2021, and before each March 1 thereafter, the Wildfire Safety Division, in consultation with the Department of Forestry and Fire Protection, shall make available a list of qualified independent evaluators with experience in assessing the safe operation of electrical infrastructure.
(B) (i) Each electrical corporation shall engage an independent evaluator listed pursuant to subparagraph (A) to review and assess the electrical corporation’s compliance with its plan. The engaged independent evaluator shall consult with, and operate under the direction of, the Wildfire Safety Division of the commission. The independent evaluator shall issue a report on July 1 of each year in which a report required by paragraph (1) is filed. As a part of the independent evaluator’s report, the independent evaluator shall determine whether the electrical corporation failed to fund any activities included in its plan.
(ii) The Wildfire Safety Division shall consider the independent evaluator’s findings, but the independent evaluator’s findings are not binding on the division, except as otherwise specified.
(iii) The independent evaluator’s findings shall be used by the Wildfire Safety Division to carry out its obligations under Article 1 (commencing with Section 451) of Chapter 3 of Part 1 of Division 1.
(iv) The independent evaluator’s findings shall not apply to events that occurred before the initial plan is approved for the electrical corporation.
(3) The commission shall authorize the electrical corporation to recover in rates the costs of the independent evaluator.
(4) The Wildfire Safety Division shall complete its compliance review within 18 months after the submission of the electrical corporation’s compliance report.
(5) (A) An electrical corporation shall notify the Wildfire Safety Division, within one month after it completes a substantial portion of the vegetation management requirements in its wildfire mitigation plan, of the completion. Upon receiving the notice from the electrical corporation, the division shall, consistent with its authority pursuant to paragraph (1) of subdivision (a) of Section 326, promptly audit the work performed by, or on behalf of, the electrical corporation. The audit shall specify any failure of the electrical corporation to fully comply with the vegetation management requirements in the wildfire mitigation plan. The division shall provide the audit to the electrical corporation. The electrical corporation shall have a reasonable time, as determined by the division, to correct and eliminate any deficiency specified in the audit.
(B) The Wildfire Safety Division may engage its own independent evaluator, who shall be a certified arborist and shall have any other qualifications determined appropriate by the division, to conduct the audit specified in subparagraph (A). The independent evaluator shall consult with, and operate under the direction of, the division.
(C) Within one year of the expiration of the time period for an electrical corporation to correct and eliminate any deficiency identified in the audit, the independent evaluator shall issue a report to the electrical corporation, the Wildfire Safety Division, and the Safety and Enforcement Division of the commission specifically describing any failure of the electrical corporation to substantially comply with the substantial portion of the vegetation management requirements in the electrical corporation’s wildfire mitigation plan. The report shall be made publicly available. The division shall include the report in its compliance review prepared pursuant to paragraph (4).
(6) Each electrical corporation shall reimburse the Wildfire Safety Division for its costs to implement this section with respect to that electrical corporation.
(d) An electrical corporation shall not divert revenues authorized to implement the plan to any activities or investments outside of the plan. An electrical corporation shall notify the commission by advice letter of the date when it projects that it will have spent, or incurred obligations to spend, its entire annual revenue requirement for vegetation management in its wildfire mitigation plan not less than 30 days before that date.
(e) The commission shall not allow a large electrical corporation to include in its equity rate base its share, as determined pursuant to the Wildfire Fund allocation metric specified in Section 3280, of the first five billion dollars ($5,000,000,000) expended in aggregate by large electrical corporations on fire risk mitigation capital expenditures included in the electrical corporations’ approved wildfire mitigation plans. An electrical corporation’s share of the fire risk mitigation capital expenditures and the debt financing costs of these fire risk mitigation capital expenditures may be financed through a financing order pursuant to Section 850.1 subject to the requirements of that financing order.
(f) This section does not impose any liability on the Wildfire Safety Division regarding the performance of its duties.

SEC. 50.

 Section 8389 of the Public Utilities Code is amended to read:

8389.
 (a) For purposes of this section, the following definitions apply:
(1) “Board” means the California Wildfire Safety Advisory Board established pursuant to Section 326.1.
(2) “Division” means the Wildfire Safety Division established pursuant to Section 326.
(b) By June 30, 2020, and annually thereafter, the board shall make recommendations to the division on all of the following:
(1) Appropriate performance metrics and processes for determining an electrical corporation’s compliance with its approved wildfire mitigation plan.
(2) Appropriate requirements in addition to the requirements set forth in Section 8386 for the wildfire mitigation plan.
(3) The appropriate scope and process for assessing the safety culture of an electrical corporation.
(c) By October 31, 2020, and annually thereafter, the division shall issue an analysis and recommendation to the commission on the recommendations provided by the board pursuant to subdivision (b).
(d) By December 1, 2020, and annually thereafter, the commission, after consultation with the division, shall adopt and approve all of the following:
(1) Performance metrics for electrical corporations.
(2) Additional requirements for wildfire mitigation plans.
(3) A wildfire mitigation plan compliance process.
(4) A process for the division to conduct annual safety culture assessments for each electrical corporation.
(e) The executive director of the commission shall issue a safety certification to an electrical corporation if the electrical corporation provides documentation of the following:
(1) The electrical corporation has an approved wildfire mitigation plan.
(2) The electrical corporation is in good standing, which can be satisfied by the electrical corporation having agreed to implement the findings of its most recent safety culture assessment, if applicable.
(3) The electrical corporation has established a safety committee of its board of directors composed of members with relevant safety experience.
(4) The electrical corporation has established an executive incentive compensation structure approved by the division and structured to promote safety as a priority and to ensure public safety and utility financial stability with performance metrics, including incentive compensation based on meeting performance metrics that are measurable and enforceable, for all executive officers, as defined in Section 451.5. This may include tying 100 percent of incentive compensation to safety performance and denying all incentive compensation in the event the electrical corporation causes a catastrophic wildfire that results in one or more fatalities.
(5) The electrical corporation has established board-of-director-level reporting to the commission on safety issues.
(6) (A) The electrical corporation has established a compensation structure for any new or amended contracts for executive officers, as defined in Section 451.5, that is based on the following principles:
(i) (I) Strict limits on guaranteed cash compensation, with the primary portion of the executive officers’ compensation based on achievement of objective performance metrics.
(II) No guaranteed monetary incentives in the compensation structure.
(ii) It satisfies the compensation principles identified in paragraph (4).
(iii) A long-term structure that provides a significant portion of compensation, which may take the form of grants of the electrical corporation’s stock, based on the electrical corporation’s long-term performance and value. This compensation shall be held or deferred for a period of at least three years.
(iv) Minimization or elimination of indirect or ancillary compensation that is not aligned with shareholder and taxpayer interest in the electrical corporation.
(B) The division shall approve the compensation structure of an electrical corporation if it determines the structure meets the principles set forth in subparagraph (A) and paragraph (4).
(C) It is the intent of the Legislature, in enacting this paragraph and paragraph (4), that any approved bankruptcy reorganization plan of an electrical corporation should, in regards to compensation for executive officers of the electrical corporation, comply with the requirements of those paragraphs.
(7) The electrical corporation is implementing its approved wildfire mitigation plan. The electrical corporation shall file a tier 1 advice letter on a quarterly basis that details the implementation of both its approved wildfire mitigation plan and recommendations of the most recent safety culture assessment, and a statement of the recommendations of the board of directors safety committee meetings that occurred during the quarter. The advice letter shall also summarize the implementation of the safety committee recommendations from the electrical corporation’s previous advice letter filing. If the division has reason to doubt the veracity of the statements contained in the advice letter filing, it shall perform an audit of the issue of concern.
(f) (1) The executive director shall issue an initial safety certification within 30 days of receipt of a request for that certification by an electrical corporation if the electrical corporation provides documentation that it is meeting the requirements set forth in paragraphs (1), (2), (3), and (5) of subdivision (e). A safety certification shall be valid for the 12 consecutive months following the issuance of the certification.
(2) Before the expiration of a certification, an electrical corporation shall submit to the division a request for certification for the following 12 months. The division shall issue a safety certification within 90 days of a request if the electrical corporation has provided documentation that it has satisfied the requirements in subdivision (e).
(3) All documents submitted pursuant to this section shall be publicly available on the commission’s internet website.
(4) Notwithstanding paragraph (1), a safety certification shall remain valid until the division acts on the electrical corporation’s pending request for safety certification.
(g) If the division determines an electrical corporation is not in compliance with its approved wildfire mitigation plan, it may recommend that the commission pursue an enforcement action against the electrical corporation for noncompliance with its approved plan.

SEC. 51.

 Section 9607 of the Public Utilities Code is amended to read:

9607.
 (a) The intent of this section is to avoid cost-shifting to customers of an electrical corporation resulting from the transfer of distribution services from an electrical corporation to an irrigation district.
(b) Except as otherwise provided in this section and Section 9608, and notwithstanding any other provision of law, an irrigation district that offered electrical service to retail customers as of January 1, 1999, may not construct, lease, acquire, install, or operate facilities for the distribution or transmission of electricity to retail customers located in the service territory of an electrical corporation providing electrical distribution services, unless the district has first applied for and received the approval of the commission and implements its service consistent with the commission’s order. The commission shall find that service to be in the public interest and shall approve the request of a district to provide distribution or transmission of electricity to retail customers located in the service territory of an electrical corporation providing electrical distribution service if, after notice and hearing, the commission determines all of the following:
(1) The district will provide universal service to all retail customers who request service within the area to be served, at published tariff rates and on a just, reasonable, and nondiscriminatory basis, comparable to that provided by the current retail service provider.
(2) If the area the district is proposing to serve is either of the following:
(A) Is within the district’s boundaries but less than the entire district, the area to be served includes a percentage of residential customers and small customers, based on load, comparable to the percentage of residential and small customers in the district, based on load.
(B) Includes territory outside the district’s boundaries, in which case the territory outside the district’s boundaries must include a percentage of residential customers and small customers, based on load, comparable to the percentage of residential and small customers in the county or counties where service is to be provided, based on load.
(3) Service by the district will be consistent with the intent of the state to avoid economic waste caused by duplication of facilities as set forth in Section 8101.
(4) Service by the district will include reasonable mitigation of any adverse effects on the reliability of an existing service by the electrical corporation.
(5) The district has established, funded, and is carrying out public purpose and low-income programs comparable to those provided by the current electric retail service provider.
(6) That district’s tariffed electrical service rates, exclusive of commodity costs, will be at least 15 percent below the tariffed electrical service rates, exclusive of commodity costs and nonbypassable charges under Sections 367, 368, 375, 376, and 379, of the electrical corporation for comparable services.
(7) Service by the district is in the public interest.
(c) An irrigation district that obtains the approval of the commission under this section to serve an area shall prepare an annual report available to the public on the total load and number of accounts of residential, low-income, agricultural, commercial, and industrial customers served by the irrigation district in the approved service area.
(d) The commission shall have jurisdiction to resolve and adjudicate complaint cases brought against an irrigation district that offered electrical service to retail customers as of January 1, 1999, by an interested party where the complaint concerns retail electric service outside the boundaries of the district and within the service territory of an electrical corporation. Nothing in this section grants the commission jurisdiction to adjudicate complaint cases involving retail electrical service by an irrigation district inside its boundaries or inside an irrigation district’s exclusive service territory.
(e) Any project involving electrical transmission or distribution facilities to be constructed or installed by an irrigation district to serve retail customers located in the service territory of an electrical corporation providing electrical distribution services shall comply with the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code). The county in which the construction or installation is to occur shall act as the lead agency. If a project involves the construction or installation of electrical transmission or distribution facilities in more than one county, the county where the majority of the construction is anticipated to occur shall act as the lead agency.
(f) An irrigation district may not offer service to customers outside of its district boundaries before offering service to all customers within its district boundaries.
(g) This section does not apply to electrical distribution service provided by the Modesto Irrigation District to those customers or within those areas described in subdivisions (a), (b), and (c) of Section 9610.
(h) The provisions of this section shall not apply to (1) a cumulative 90 megawatts of load served by the Merced Irrigation District that is located within the boundaries of the district, as those boundaries existed on December 20, 1995, together with the territory of Castle Air Force Base that was located outside the district on that date, or (2) electric load served by the district that was not previously served by an electrical corporation that is located within the boundaries of the district, as those boundaries existed on December 20, 1995, together with the territory of Castle Air Force Base that was located outside the district on that date.
(i) For purposes of this section, a megawatt of load shall be calculated in accordance with the methodology established by the Energy Commission in its Docket No. 96-IRR-1890, but the 90 megawatts shall not include electrical usage by customers that move to the areas described in paragraph (1) after December 31, 2000.
(j) Subdivision (a) of this section shall not apply to the construction, modification, lease, acquisition, installation, or operation of facilities for the distribution or transmission of electricity to customers electrically connected to a district as of December 31, 2000, or to other customers who subsequently locate at the same premises.
(k) In recognition of contractual arrangements and settlements existing as of June 1, 2000, this section does not apply to the acquisition or operation of the electrical distribution facilities that are the subject of the Settlement Agreement dated May 1, 2000, between Pacific Gas and Electric Company and the San Joaquin Irrigation District.
(l) For purposes of this section, retail customers do not include an irrigation district’s own electric load being served at retail by an electrical corporation.

SEC. 52.

 Section 80500 of the Water Code is repealed.

SEC. 53.

 Section 80502 of the Water Code is amended and renumbered to read:

80500.
 Nothing in this division shall be construed to reduce or modify an electrical corporation’s obligation to serve. The commission shall issue orders it determines are necessary to carry out this section.

SEC. 54.

 Section 80503 of the Water Code is amended and renumbered to read:

80502.
 (a) The development and operation of a program as provided in this division is in all respects for the welfare and the benefit of the people of the state, to protect the public peace, health, and safety, and constitutes an essential governmental purpose.
(b) This division shall be liberally construed in a manner so as to effectuate its purposes and objectives.

SEC. 55.

 Section 80524 of the Water Code is amended to read:

80524.
 (a) The revenue requirement for each year or, with respect to the first year and last year, the pro rata portion of the year, shall be equal to the average annual amount of collections by the department with respect to charges imposed pursuant to the revenue requirements established by the department under Section 80110 for the period from January 1, 2013, through December 31, 2018. The revenue requirement shall remain in effect until January 1, 2036.
(b) If, pursuant to Section 3289 of the Public Utilities Code, the commission makes a just and reasonable determination with respect to the revenue requirement, then the commission shall enter into an agreement with the department with respect to charges under Section 3289 of the Public Utilities Code with respect to the revenue requirement, and that agreement shall have the force and effect of an irrevocable financing order adopted in accordance with Article 5.5 (commencing with Section 840) of Chapter 4 of Part 1 of Division 1 of the Public Utilities Code, as determined by the commission. The agreement and financing order shall provide for the administration of the revenue requirement, including provisions to the effect that (1) the department shall notify the commission each year of the annual collections received by the department with respect to the revenue requirement and the amount of any excess or deficiency in collections above or below the revenue requirement and that the commission shall adjust charges in the subsequent year to reflect any such excess or deficiency, and (2) during any revenue requirement period if the department forecasts that the revenue requirement for that period will not be met and that collections will not be sufficient to fund any of the amounts in paragraphs (1) to (5), inclusive, of Section 80544, then the department shall notify the commission in writing and the commission shall act within 30 days to increase charges so that the amounts collected during that period are sufficient to meet those obligations. For avoidance of doubt, no such adjustment to charges by the commission shall affect in any respect the commission’s just and reasonable determination with respect to the revenue requirement.

SEC. 56.

 Section 80544 of the Water Code is amended to read:

80544.
 (a) If, pursuant to Section 80524, the commission makes a just and reasonable determination with respect to that revenue requirement, the department shall, and in any obligation entered into pursuant to this division may covenant to, at least annually, and more frequently as required, allocate or cause to be allocated moneys collected pursuant to this division to provide any of the following:
(1) The amounts necessary to pay the principal of, and premium, if any, and interest on, all bonds as and when the bonds shall become due.
(2) The amounts necessary to make payments under any contracts, agreements, or obligations entered into by it pursuant hereto, in the amounts and at the times they shall become due.
(3) Reserves in such amount as may be determined by the department from time to time to be necessary or desirable.
(4) Consistent with Section 3288 of the Public Utilities Code, repayment of loans made from the Surplus Money Investment Fund to the Wildfire Fund.
(5) The administrative costs of the department incurred in administering this division.
(6) After meeting the purposes in paragraphs (1) to (5), inclusive, the transfer of any remaining revenue requirement amount to the Wildfire Fund.
(b) The commission shall not revise the revenue requirement established pursuant to this division at any time prior to January 1, 2036. For avoidance of doubt, the revenue requirement established pursuant to this division shall not be imposed and collected until the department has legally defeased or paid at maturity the power supply revenue bonds issued pursuant to Section 80134 and provided written notice thereof to the commission.

SEC. 57.

 Section 80550 of the Water Code is amended to read:

80550.
 (a) There is hereby established in the State Treasury the Department of Water Resources Charge Fund. Notwithstanding Section 13340 of the Government Code, all moneys in the fund are continuously appropriated, without regard to fiscal year, to the department and shall be available for the purposes of this division.
(b) All revenues payable to the department under this division, including proceeds of bonds issued pursuant to Chapter 3 (commencing with Section 80540), shall be deposited in the fund. Notwithstanding any other law, interest accruing on the moneys in the fund shall be deposited in the fund and shall be used for purposes of this division. Payments from the fund may be made only for the following purposes:
(1) Payment of any bonds or other contractual obligations authorized by this division.
(2) The expenses incurred by the department in administering this division.
(3) Consistent with Section 3288 of the Public Utilities Code, repayment of principal of, and interest on, loans made from the Surplus Money Investment Fund to the Wildfire Fund. Repayment of loans made from the Surplus Money Investment Fund shall be made as soon as practicable.
(4) The transfers to the Wildfire Fund.
(c) Obligations authorized by this division shall be payable solely from the fund. Neither the full faith and credit nor the taxing power of the state are or may be pledged for any payment under any obligation authorized by this division.
(d) While any obligations of the department incurred under this division remain outstanding and not fully performed or discharged, the rights, powers, duties, and existence of the department and the commission shall not be diminished or impaired in any manner that will affect adversely the interests and rights of the holders of or parties to those obligations. The department may include this pledge and undertaking of the state in the department’s obligations.

SEC. 58.

 Section 1 of Chapter 79 of the Statutes of 2019 is amended to read:

SECTION 1.

 (a) The Legislature finds and declares the following:
(1) The increased risk of catastrophic wildfires poses an immediate threat to communities and properties throughout the state.
(2) With increased risk of catastrophic wildfires, the electrical corporations’ exposure to financial liability resulting from wildfires that were caused by utility equipment has created increased costs to ratepayers.
(3) The creation of a wildfire insurance fund will reduce the costs to ratepayers in addressing utility-caused catastrophic wildfires.
(4) Electrical corporations need capital to fund ongoing operations and make new investments to promote safety, reliability, and California’s clean energy mandates and ratepayers benefit from low utility capital costs in the form of reduced rates.
(5) The establishment of a wildfire fund supports the creditworthiness of electrical corporations, and provides a mechanism to attract capital for investment in safe, clean, and reliable power for California at a reasonable cost to ratepayers.
(b) It is the intent of the Legislature to provide a mechanism that allows electrical corporations that are safe actors to guard against impairment of their ability to provide safe and reliable service because of the financial effects of wildfires in their service territories using mechanisms that are more cost effective than traditional insurance, to the direct benefit of ratepayers and prudent electrical corporations.

SEC. 59.

 Section 2 of Chapter 79 of the Statutes of 2019 is amended to read:

SEC. 2.

 The Legislature further finds and declares the following:
(a) The state has dramatically increased investment in wildfire prevention and response, which must be matched by increased efforts of the electrical corporations.
(b) The state’s electrical corporations must invest in hardening of the state’s electrical infrastructure and vegetation management to reduce the risk of catastrophic wildfire.
(c) The state has a substantial interest that its electrical corporations are operating in a safe and reliable manner and have access to capital at reasonable cost to make safety investments.
(d) A major electrical corporation operating within the state is on criminal probation, has engaged in a series of safety violations, failed to timely pay wildfire victims, and voluntarily filed for bankruptcy pursuant to Chapter 11 (commencing with Section 1101) of Title 11 of the United States Code.
(e) The creation of a new Wildfire Safety Division will ensure safe operations by electrical corporations and the establishment of a Wildfire Safety Advisory Board will ensure that broad expertise is available to develop best practices for wildfire reduction.
(f) A safety certification encourages electrical corporations to invest in safety and improve safety culture to limit wildfire risks and reduce costs.
(g) The first $5 billion in safety investments in the aggregate by the large electrical corporations must be made under this act without return on equity that would have otherwise been borne by ratepayers.

SEC. 60.

 Section 49.1 of this bill incorporates amendments to Section 8386.3 of the Public Utilities Code proposed by both this bill and SB 247. That section shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2020, (2) each bill amends Section 8386.3 of the Public Utilities Code, and (3) this bill is enacted after SB 247, in which case Section 49 of this bill shall not become operative.

SEC. 61.

 Section 25 of Chapter 79 of the Statutes of 2019 is amended to read:

SEC. 25.

 The sum of nine million dollars ($9,000,000) is hereby transferred from the General Fund to the Department of Water Resources Charge Fund, established by Section 80550 of the Water Code, for the purposes of Division 28 (commencing with Section 80500) of the Water Code. The amount transferred pursuant to this section shall be repaid from the Department of Water Resources Charge Fund to the General Fund at the earliest possible time.