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AB-242 Public Utilities Commission.(2021-2022)

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Date Published: 01/13/2021 09:00 PM
AB242:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 242


Introduced by Assembly Member Holden

January 13, 2021


An act to amend Sections 854, 913.5, and 2790 of, and to repeal Sections 913.10 and 913.11 of, the Public Utilities Code, relating to the Public Utilities Commission.


LEGISLATIVE COUNSEL'S DIGEST


AB 242, as introduced, Holden. Public Utilities Commission.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities. Existing law prohibits a person or corporation from merging, acquiring, or controlling, either directly or indirectly, any public utility organized and doing business in this state without first securing authorization to do so from the commission. Existing law requires that the commission make specific findings, or consider specific criteria or elements, before authorizing such a merger, acquisition, or change in control when a party to that transaction has gross annual California revenues exceeding a specified amount.
This bill would make nonsubstantive changes to those provisions relating to mergers, acquisitions, and changes in control.
Existing law requires the commission to make various reports to the Legislature relating to energy efficiency.
This bill would consolidate 3 of those reports into a single report and, in doing so, would increase the frequency with which certain energy efficiency information would be reported.
Existing law requires electrical and gas corporations to perform home weatherization services for low-income customers, as specified.
This bill would update a cross-reference related to that requirement.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 854 of the Public Utilities Code is amended to read:

854.
 (a) A person or corporation, whether or not organized under the laws of this state, shall not directly or indirectly merge, acquire, or control, including pursuant to a change in control as described in subparagraphs (D) or (E) of paragraph (1) of subdivision (b) of Section 854.2, any public utility organized and doing business in this state without first securing authorization to do so from the commission. The commission may establish, by order or rule, the definitions of what constitutes a merger, acquisition, or control activity that is subject to this section. Any merger, acquisition, or control without that prior authorization is void. A public utility organized and doing business under the laws of this state, and a subsidiary or affiliate of, or corporation holding a controlling interest in, a public utility, shall not aid or abet any violation of this section.
(b) Before authorizing the merger, acquisition, or control of any electrical, gas, or telephone corporation organized and doing business in this state, if any utility that is a party to the proposed transaction has gross annual California revenues exceeding five hundred million dollars ($500,000,000), the commission shall find that the proposal does all of the following:
(1) Provide short-term and long-term economic benefits to ratepayers.
(2) Equitably allocate, where the commission has ratemaking authority, the total short-term and long-term forecasted economic benefits, as determined by the commission, of the proposed merger, acquisition, or control, between shareholders and ratepayers. Ratepayers shall receive not less than 50 percent of those benefits.
(3) Not adversely affect competition. In making this finding, the commission shall request an advisory opinion from the Attorney General regarding whether competition will be adversely affected and what mitigation measures could be adopted to avoid this result.
(4) For an electric or gas utility, electrical or gas corporation, ensure the utility corporation will have an adequate workforce to maintain the safe and reliable operation of the utility assets.
(c) Before authorizing the merger, acquisition, or control of any electrical, gas, or telephone corporation organized and doing business in this state, if any entity that is a party to the proposed transaction has gross annual California revenues exceeding five hundred million dollars ($500,000,000), the commission shall consider each of the criteria listed in paragraphs (1) to (8), inclusive, and find, on balance, that the merger, acquisition, or control proposal is in the public interest.
(1) Maintain or improve the financial condition of the resulting public utility doing business in the state.
(2) Maintain or improve the quality of service to public utility ratepayers in the state.
(3) Maintain or improve the quality of management of the resulting public utility doing business in the state.
(4) Be fair and reasonable to affected public utility employees, including both union and nonunion employees.
(5) Be fair and reasonable to the majority of all affected public utility shareholders.
(6) Be beneficial on an overall basis to state and local economies, economies and to the communities in the area served by the resulting public utility.
(7) Preserve the jurisdiction of the commission and the capacity of the commission to effectively regulate and audit public utility operations in the state.
(8) Provide mitigation measures to prevent significant adverse consequences that may result.
(d) (1) Before authorizing the merger, acquisition, or change in control of any electrical or gas corporation organized and doing business in this state, if any entity that is a party to the proposed transaction has gross annual California revenues exceeding four hundred million dollars ($400,000,000), the commission shall consider the elements in subparagraphs (A) to (G), inclusive, and find, on balance, that the proposal is in the public interest.
(A) A safety management system.
(B) A comprehensive safety plan that includes a systemwide strategic approach for the safety of both employees and the public.
(C) Plans to maintain or improve the records of the electrical corporation’s electric plant or gas corporation’s gas plant, including necessary audits to update incorrect or incomplete records of the electrical or gas corporation. For purposes of this paragraph, subparagraph, “records” shall include, but not be limited to, locations, depth, age, maintenance and testing history, maps, surveys, patrols, and violation history of the electrical corporation’s electric plant or gas corporation’s gas plant.
(D) Metrics to measure safety that are complete and drive appropriate behavior.
(E) An appropriate evaluation of safety expertise in the list of qualifications used in selecting corporate leadership.
(F) Active audits for safety controls.
(G) A nonpunitive system for reporting potential safety incidents to the commission to facilitate the identification of accident precursors by persons familiar with the operations of the electrical or gas corporation, including, but not limited to, employees and contractors of the electrical or gas corporation, and the collection, analysis, and dissemination of unbiased safety information. An employee of, or the employee of a contractor performing work for, the electrical or gas corporation shall not be subject to demotion, discharge, or any other form of retaliation or discrimination for participating in the potential safety incident reporting system established pursuant to this subdivision.
(2) The commission may delay the implementation of this subdivision until July 1, 2021, or until the commission adopts rules implementing the requirements of this subdivision, whichever is earlier.
(e) When reviewing a merger, acquisition, or control proposal, the commission shall consider reasonable options to the proposal recommended by other parties, including no new merger, acquisition, or control, to determine whether comparable short-term and long-term economic savings can be achieved through other means while avoiding the possible adverse consequences of the proposal.
(f) The person or corporation seeking acquisition or control of a public utility organized and doing business in this state shall have, before the commission, the burden of proving by a preponderance of the evidence that the requirements of subdivisions (b), (c), and (d) are met.
(g) In determining whether an acquiring utility has gross annual revenues exceeding the amount specified in subdivisions (b) and (c), the revenues of that utility’s affiliates an affiliate of that utility shall not be considered unless the affiliate was used to effect the merger, acquisition, or control.
(h) Paragraphs (1) and (2) of subdivision (b) do not apply to the formation of a holding company.
(i) For purposes of paragraphs (1) and (2) of subdivision (b), the Legislature does not intend to include acquisitions or changes in control that are mandated by either the commission or the Legislature as a result of, or in response to to, any electric industry restructuring. However, the value of an acquisition or change in control may be used by the commission in determining the costs or benefits attributable to any electric industry restructuring and for allocating those costs or benefits for collection in rates.

SEC. 2.

 Section 913.5 of the Public Utilities Code is amended to read:

913.5.
 The (a) Before July 1, 2022, and every three years thereafter, the commission shall submit a report to the Legislature by July 15, 2009, and triennially thereafter, on the energy efficiency and conservation programs it oversees. The report shall include information regarding authorized utility budgets and expenditures and projected and actual energy savings over the program cycle.
(b) In the report submitted pursuant to subdivision (a), the commission shall also report to the Legislature on the progress toward achieving the targets established pursuant to subdivision (a) of Section 454.55 and subdivision (a) of Section 454.56. The commission shall include specific strategies for, and an update on, progress toward maximizing the contribution of energy and electricity efficiency savings in disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code.

SEC. 3.

 Section 913.10 of the Public Utilities Code is repealed.
913.10.

By July 1, 2019, and every four years thereafter, the commission shall report to the Legislature on the progress toward achieving the targets established pursuant to subdivision (a) of Section 454.55. The commission shall include specific strategies for, and an update on, progress toward maximizing the contribution of electricity efficiency savings in disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code.

SEC. 4.

 Section 913.11 of the Public Utilities Code is repealed.
913.11.

By July 1, 2019, and every four years thereafter, the commission shall report to the Legislature on the progress toward achieving the targets established pursuant to subdivision (a) of Section 454.56. The commission shall include specific strategies for, and an update on, progress toward maximizing the contribution of energy efficiency savings in disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code.

SEC. 5.

 Section 2790 of the Public Utilities Code is amended to read:

2790.
 (a) The commission shall require an electrical or gas corporation to perform home weatherization services for low-income customers, as determined by the commission under subdivision (a) of Section 739, 739.1, if the commission determines that a significant need for those services exists in the corporation’s service territory, taking into consideration both the cost-effectiveness of the services and the policy of reducing the hardships facing low-income households.
(b) (1) For purposes of this section, “weatherization” may include, where feasible, any of the following measures for any dwelling unit:
(A) Attic insulation.
(B) Caulking.
(C) Weatherstripping.
(D) Low flow Low-flow showerhead.
(E) Waterheater blanket.
(F) Door and building envelope repairs that reduce air infiltration.
(2) The commission shall direct any electrical or gas corporation to provide as many of these measures as are feasible for each eligible low-income dwelling unit.
(c) “Weatherization” may also include other building conservation measures, energy management technology, energy-efficient appliances, and energy education programs determined by the commission to be feasible, taking into consideration for all measures both the cost-effectiveness of the measures as a whole and the policy of reducing energy-related hardships facing low-income households.
(d) Weatherization programs shall use the needs assessment pursuant to Section 382.1 to maximize efficiency of delivery.
(e) For purposes of this section, “energy management technology” may include a product, service, or software that allows a customer to better understand and manage electricity or gas use in the customer’s home.