Code Section Group

Public Utilities Code - PUC

DIVISION 5. UTILITIES OWNED BY MUNICIPAL CORPORATIONS [10001 - 10303]

  ( Division 5 enacted by Stats. 1951, Ch. 764. )

CHAPTER 1. Acquisition, Operation, and Sale of Utilities [10001 - 10303]

  ( Chapter 1 enacted by Stats. 1951, Ch. 764. )

ARTICLE 1. Acquisition and Operation [10001 - 10014]
  ( Article 1 enacted by Stats. 1951, Ch. 764. )

10001.
  

“Public utility” as used in this article, means the supply of a municipal corporation alone or together with its inhabitants, or any portion thereof, with water, light, heat, power, sewage collection, treatment, or disposal for sanitary or drainage purposes, transportation of persons or property, means of communication, or means of promoting the public convenience.

(Amended by Stats. 1984, Ch. 1112, Sec. 1. Effective September 13, 1984.)

10001.5.
  

A municipal corporation that provides broadband Internet access services shall comply with the requirements of Article 12 (commencing with Section 53167) of Chapter 1 of Part 1 of Division 2 of Title 5 of the Government Code.

(Added by Stats. 2018, Ch. 963, Sec. 6. (AB 1999) Effective January 1, 2019.)

10002.
  

Any municipal corporation may acquire, construct, own, operate, or lease any public utility.

(Enacted by Stats. 1951, Ch. 764.)

10003.
  

The power to acquire and operate a public utility includes the power to complete, reconstruct, extend, change, enlarge, and repair a public utility acquired, constructed, owned, or operated by a municipality.

(Enacted by Stats. 1951, Ch. 764.)

10004.
  

For the purpose set forth in Sections 10002 and 10003 a municipal corporation may acquire, own, control, sell, or exchange lands, easements, licenses, and rights of every nature within or without its corporate limits, and may operate a public utility within or without the corporate limits when necessary to supply the municipality, or its inhabitants or any portion thereof, with the service desired.

(Enacted by Stats. 1951, Ch. 764.)

10004.5.
  

(a) Except as provided for in subdivision (b), any judicial action or proceeding against a municipal corporation that provides electric utility service, to attack, review, set aside, void, or annul an ordinance, resolution, or motion fixing or changing a rate or charge for an electric commodity or an electric service furnished by a municipal corporation and adopted on or after July 1, 2000, shall be commenced within 120 days of the effective date of that ordinance, resolution, or motion.

(b) This section does not apply to any judicial action or proceeding filed pursuant to Chapter 13.7 (commencing with Section 54999) of Part 1 of Division 2 of Title 5 of the Government Code to protest or challenge a rate or charge or to seek the refund of a capital facilities fee if the notice and disclosure requirements of Section 54999.35 of the Government Code have not been followed.

(Added by Stats. 2000, Ch. 146, Sec. 5. Effective July 21, 2000.)

10005.
  

Whenever, in the operation of a utility, a municipality develops an excess of water, light, heat, or power, over and above the amount which is necessary for the use of the municipality and its inhabitants, or such portion thereof as the legislative body of the municipality determines is to be supplied therewith, the municipality may sell, lease, or distribute the excess outside of its corporate limits.

(Enacted by Stats. 1951, Ch. 764.)

10006.
  

No lease of a public utility is valid for a period of more than 15 years, and all such leases shall be let to the highest bidder at public auction.

(Enacted by Stats. 1951, Ch. 764.)

10007.
  

(a) Every public utility furnishing light, heat, or power shall expend no funds for advertising when such advertising encourages increased consumption of such services or commodities.

(b) Nothing in this section shall prohibit a public utility furnishing light, heat, or power from expending funds for advertising which encourages the more efficient operation of the public utility or for advertising which encourages the more efficient use of light, heat, or power, the conservation of energy or natural resources, or presents accurate information on the economical purchase, maintenance, or use of any appliance or device using light, heat, or power.

(Added by Stats. 1974, Ch. 194.)

10009.
  

(a) This section applies if there is a landlord-tenant relationship between the residential occupants and the owner, manager, or operator of the dwelling.

(b) If a public utility furnishes individually metered residential light, heat, water, or power to residential occupants in a detached single-family dwelling, a multiunit residential structure, mobilehome park, or a permanent residential structure in a labor camp, as defined in Section 17008 of the Health and Safety Code, and the owner, manager, or operator of the dwelling, structure, or park is the customer of record, the public utility shall make every good faith effort to inform the residential occupants, by means of written notice, when the account is in arrears, that service will be terminated in 10 days. The written notice shall further inform the residential occupants that they have the right to become customers of the public utility without being required to pay the amount due on the delinquent account. The notice shall be in English and in the languages listed in Section 1632 of the Civil Code.

(c) The public utility is not required to make service available to the residential occupants unless each residential occupant agrees to the terms and conditions of service, and meets the requirements of law and the public utility’s rules. However, if one or more of the residential occupants are willing and able to assume responsibility for the subsequent charges to the account to the satisfaction of the public utility, or if there is a physical means, legally available to the public utility, of selectively terminating service to those residential occupants who have not met the requirements of the public utility’s rules, the public utility shall make service available to the residential occupants who have met those requirements.

(d) If prior service for a period of time is a condition for establishing credit with the public utility, residence and proof of prompt payment of rent or other obligation acceptable to the public utility for that period of time is a satisfactory equivalent.

(e) Any residential occupant who becomes a customer of the public utility pursuant to this section whose periodic payments, such as rental payments, include charges for residential light, heat, water, or power, where these charges are not separately stated, may deduct from the periodic payment each payment period all reasonable charges paid to the public utility for those services during the preceding payment period.

(Amended by Stats. 2009, Ch. 560, Sec. 4. (SB 120) Effective January 1, 2010.)

10009.1.
  

(a) If a public utility furnishes light, heat, water, or power to residential occupants through a master meter in a multiunit residential structure, mobilehome park, or permanent residential structures in a labor camp, as defined in Section 17008 of the Health and Safety Code, and the owner, manager, or operator of the structure or park is listed by the public utility as the customer of record, the public utility shall make every good faith effort to inform the residential occupants, by means of a written notice posted on the door of each residential unit at least 15 days prior to termination, when the account is in arrears, that service will be terminated on a date specified in the notice. If it is not reasonable or practicable to post the notice on the door of each residential unit, the public utility shall post two copies of the notice in each accessible common area and at each point of access to the structure or structures. The notice shall further inform the residential occupants that they have the right to become utility customers, to whom the service will then be billed, without being required to pay the amount due on the delinquent account. The notice also shall specify, in plain language, what the residential occupants are required to do in order to prevent the termination of, or to reestablish service; the estimated monthly cost of service; the title, address, and telephone number of a representative of the public utility who can assist the residential occupants in continuing service; and the address and telephone number of a qualified legal services project, as defined in Section 6213 of the Business and Professions Code, which has been recommended by the local county bar association. The notice shall be in English and the languages listed in Section 1632 of the Civil Code.

(b) The public utility is not required to make service available to the residential occupants unless each residential occupant or a representative of the residential occupants agrees to the terms and conditions of service, and meets the requirements of law and the public utility’s rules. However, if one or more of the residential occupants or the representative of the residential occupants are willing and able to assume responsibility for subsequent charges to the account to the satisfaction of the public utility, or if there is a physical means, legally available to the public utility, of selectively terminating service to those residential occupants who have not met the requirements of the public utility’s rules or for whom the representative of the residential occupants is not responsible, the public utility shall make service available to the residential occupants who have met those requirements or on whose behalf those requirements have been met.

(c) If prior service for a period of time or other demonstration of credit worthiness is a condition for establishing credit with the public utility, residence and proof of prompt payment of rent or other credit obligation during that period of time acceptable to the public utility is a satisfactory equivalent.

(d) Any residential occupant who becomes a customer of the public utility pursuant to this section whose periodic payments, such as rental payments, include charges for residential light, heat, water, or power, where these charges are not separately stated, may deduct from the periodic payment each payment period all reasonable charges paid to the public utility for those services during the preceding payment period.

(e) If a public utility furnishes residential service subject to subdivision (a), the public utility may not terminate that service in any of the following situations:

(1) During the pendency of an investigation by the public utility of a customer dispute or complaint.

(2) If the customer has been granted an extension of the period for payment of a bill.

(3) For an indebtedness owed by the customer to any other public agency or when the obligation represented by the delinquent account or other indebtedness was incurred with any public agency other than the public utility.

(4) If a delinquent account relates to another property owned, managed, or operated by the customer.

(5) If a public health or building officer certifies that termination would result in a significant threat to the health or safety of the residential occupants or the public.

(f) Notwithstanding any other provision of law, and in addition to any other remedy provided by law, if the owner, manager, or operator, by any act or omission, directs, permits, or fails to prevent a termination of service while any residential unit is occupied, the residential occupant or the representative of the residential occupants may commence an action for the recovery of all of the following:

(1) Reasonable costs and expenses incurred by the residential occupant or the representative of the residential occupants related to restoration of service.

(2) Actual damages related to the termination of service.

(3) Reasonable attorney’s fees of the residential occupants, the representative of the residential occupants, or each of them, incurred in the enforcement of this section, including, but not limited to, enforcement of a lien.

(g) Notwithstanding any other provision of law, and in addition to any other remedy provided by law, if the owner, manager, or operator, by any act or omission, directs, permits, or fails to prevent a termination of service while any residential unit receiving that service is occupied, the corporation may commence an action for the recovery of all of the following:

(1) Delinquent charges accruing prior to the expiration of the notice prescribed by subdivision (a).

(2) Reasonable costs incurred by the corporation related to the restoration of service.

(3) Reasonable attorney’s fees of the corporation incurred in the enforcement of this section or in the collection of delinquent charges, including, but not limited to, enforcement of a lien.

If the court finds that the owner, manager, or operator has paid the amount in arrears prior to termination, the court shall allow no recovery of any charges, costs, damages, expenses, or fees under this subdivision from the owner, manager, or operator.

An abstract of any money judgment entered pursuant to subdivision (f) or (g) of this section shall be recorded pursuant to Section 697.310 of the Code of Civil Procedure.

(h) No termination of service subject to this section may be effected without compliance with this section, and any service wrongfully terminated shall be restored without charge to the residential occupants or customer for the restoration of the service. In the event of a wrongful termination by the public utility, the public utility shall, in addition, be liable to the residential occupants or customer for actual damages resulting from the termination and for the costs of enforcement of this section, including, but not limited to, reasonable attorney’s fees, if the residential occupants or the representative of the residential occupants make a good faith effort to have the service continued without interruption.

(i) The public utility shall adopt rules and regulations necessary to implement this section and shall liberally construe this section to accomplish its purpose of ensuring that service to residential occupants is not terminated due to nonpayment by the customer unless the public utility has made every reasonable effort to continue service to the residential occupants. The rules and regulations shall include, but are not limited to, guidelines for assistance to actual users in the enforcement of this section and requirements for the notice prescribed by subdivision (a), including, but not limited to, clear wording, large and boldface type, and comprehensive instructions to ensure full notice to the actual user.

(j) Nothing in this section broadens or restricts any authority of a local agency that existed prior to January 1, 1989, to adopt an ordinance protecting a residential occupant from the involuntary termination of residential public utility service.

(k) This section preempts any statute or ordinance permitting punitive damages against any owner, manager, or operator on account of an involuntary termination of residential public utility service or permitting the recovery of costs associated with the formation, maintenance, and termination of a tenants’ association.

(l) For purposes of this section, “representative of the residential occupants” does not include a tenants’ association.

(Amended by Stats. 2010, Ch. 328, Sec. 205. (SB 1330) Effective January 1, 2011.)

10009.6.
  

(a) The decision of a public utility to require a new residential applicant to deposit a sum of money with the public utility prior to establishing an account and furnishing service shall be based solely upon the creditworthiness of the applicant as determined by the public utility.

(b) No municipal corporation owning or operating a public utility furnishing services for residential use to a tenant under an account established by the tenant shall seek to recover any charges or penalties for the furnishing of services to, or for the tenant’s residential use from, any subsequent tenant or the property owner due to nonpayment of charges by a previous tenant. For this purpose, the term “subsequent tenant” shall not include any adult person who lived at the residence during the period that the charges or penalties accrued. The municipal corporation may collect a deposit from the tenant service applicant prior to establishing an account for the tenant. The municipal corporation may not require that service to subsequent tenants be furnished on the account of the landlord or property owner unless the property owner voluntarily agrees to that requirement, nor may the municipal corporation refuse to furnish services to a tenant in the tenant’s name based upon the nonpayment of charges by a previous tenant.

(c) A public utility subject to this section may not demand or receive security in an amount that exceeds twice the estimated average periodic bill or three times the estimated average monthly bill.

(d) In the event of tenant nonpayment of all or a portion of the bill, the deposit shall be applied to the final bill issued when service is terminated.

(e) This section shall not apply to master-metered apartment buildings.

(Amended by Stats. 1998, Ch. 739, Sec. 1. Effective January 1, 1999.)

10010.
  

(a) No public utility furnishing light, water, power, or heat may terminate residential service for nonpayment of a delinquent account unless the public utility first gives notice of the delinquency and impending termination, as provided in Section 10010.1.

(b) No public utility shall terminate residential service for nonpayment in any of the following situations:

(1) During the pendency of an investigation by the public utility of a customer dispute or complaint.

(2) When a customer has been granted an extension of the period for payment of a bill.

(3) On the certification of a licensed physician and surgeon that to do so will be life threatening to the customer and the customer is financially unable to pay for service within the normal payment period and is willing to enter into an amortization agreement with the public utility pursuant to subdivision (e) with respect to all charges that the customer is unable to pay prior to delinquency.

(c) Any residential customer who has initiated a complaint or requested an investigation within five days of receiving the disputed bill, or who has, within 13 days of mailing of the notice required by subdivision (a), made a request for extension of the payment period of a bill asserted to be beyond the means of the customer to pay in full during the normal period for payment, shall be given an opportunity for review of the complaint, investigation, or request by a review manager of the public utility. The review shall include consideration of whether the customer shall be permitted to amortize the unpaid balance of the account over a reasonable period of time, not to exceed 12 months. No termination of service shall be effected for any customer complying with the amortization agreement, if the customer also keeps the account current as charges accrue in each subsequent billing period.

(d) Any customer whose complaint or request for an investigation pursuant to subdivision (c) has resulted in an adverse determination by the public utility may appeal the determination to the governing body of the municipal corporation. Any subsequent appeal of the dispute or complaint to the governing body is not subject to this section.

(e) Any customer meeting the requirements of paragraph (3) of subdivision (b) shall, upon request, be permitted to amortize, over a period not to exceed 12 months, the unpaid balance of any bill asserted to be beyond the means of the customer to pay within the normal period for payment.

(Amended by Stats. 1985, Ch. 888, Sec. 7.)

10010.1.
  

(a) A public utility furnishing light, heat, water, or power shall not terminate residential service on account of nonpayment of a delinquent account unless the public utility first gives notice of the delinquency and impending termination, at least 10 days prior to the proposed termination, by means of a notice mailed, postage prepaid, to the customer to whom the service is billed, not earlier than 19 days from the date of mailing the public utility’s bill for services, and the 10-day period shall not commence until five days after the mailing of the notice.

(b) Every public utility shall make a reasonable attempt to contact an adult person residing at the premises of the customer by telephone or personal contact, at least 24 hours prior to any termination of service, except that, whenever telephone or personal contact cannot be accomplished, the public utility shall give, by mail, in person, or by posting in a conspicuous location at the premises, a notice of termination of service, at least 48 hours prior to termination.

(c) Every public utility shall make available to its residential customers who are 65 years of age or older, or who are dependent adults as defined in Section 15610.23 of the Welfare and Institutions Code, a third-party notification service, whereby the public utility will attempt to notify a person designated by the customer to receive notification when the customer’s account is past due and subject to termination. The notification shall include information on what is required to prevent termination of service. The residential customer shall make a request for third-party notification on a form provided by the public utility, and shall include the written consent of the designated third party. The third-party notification does not obligate the third party to pay the overdue charges, nor shall it prevent or delay termination of service.

(d) Every notice of termination of service pursuant to subdivision (a) shall include all of the following information:

(1) The name and address of the customer whose account is delinquent.

(2) The amount of the delinquency.

(3) The date by which payment or arrangements for payment is required in order to avoid termination.

(4) The procedure by which the customer may initiate a complaint or request an investigation concerning service or charges, except that, if the bill for service contains a description of that procedure, the notice pursuant to subdivision (a) is not required to contain that information.

(5) The procedure by which the customer may request amortization of the unpaid charges.

(6) The procedure for the customer to obtain information on the availability of financial assistance, including private, local, state, or federal sources, if applicable.

(7) The telephone number of a representative of the public utility who can provide additional information or institute arrangements for payment.

Every notice of termination of service pursuant to subdivision (b) shall include the items of information in paragraphs (1), (2), (3), (6), and (7).

All written notices shall be in a clear and legible format.

(e) If a residential customer fails to comply with an amortization agreement, the public utility shall not terminate service without giving notice to the customer at least 48 hours prior to termination of the conditions the customer is required to meet to avoid termination, but the notice does not entitle the customer to further investigation by the public utility.

(f) A termination of service shall not be effected without compliance with this section. Any service wrongfully terminated shall be restored without charge for the restoration of service, and a notation thereof shall be mailed to the customer at the customer’s billing address.

(Amended by Stats. 2019, Ch. 497, Sec. 250. (AB 991) Effective January 1, 2020.)

10011.
  

No electrical, gas, heat, or water public utility shall, by reason of delinquency in payment for any electric, gas, heat, or water services, cause cessation of any such services on any Saturday, Sunday, legal holiday, or at any time during which the business offices of the public utility are not open to the public.

(Added by Stats. 1977, Ch. 1027.)

10011.5.
  

Whenever a business transaction of a public utility, as defined in Section 10001, furnishing electricity, gas, water service where the utility has 10,000 or more service connections, or telephone service is such that a personal appearance by a person is required by the utility and the person is unable to appear at the utility’s place of business during the utility’s usual business hours, then the utility shall provide a reasonable and convenient alternative to the person such as an appointment outside the utility’s usual business hours or allowing the person to conduct the transaction by telephone, mail, or both.

(Added by Stats. 1995, Ch. 614, Sec. 2. Effective January 1, 1996.)

10012.
  

Every public utility shall comply with Section 8029.5.

(Added by Stats. 1982, Ch. 549, Sec. 2.)

10013.
  

(a) Subsequent to signing a contingent franchise, license, or service agreement with a local agency, a privatizer shall apply to the commission for a determination that the proposed privatization project is not a public utility within the meaning of Section 216 and is therefore exempt from commission regulation. When a privatizer files an application with the commission, the privatizer shall include the information the commission requires to make a determination in accordance with subdivisions (b), (c), (d), and (e).

(b) (1) Not later than 60 calendar days after the privatizer submits its application to the commission, the commission shall determine in writing whether the application is complete and shall immediately transmit the determination to the privatizer.

(2) If the application is determined not to be complete, the commission shall specify in writing those parts of the application which are incomplete and shall indicate the manner in which it can be made complete, including a list and thorough description of the specific information needed to complete the application. The applicant shall submit materials to the commission in response to the list and description. Upon resubmittal of the application, a new 60-calendar-day period shall begin, during which the commission shall determine the completeness of the application.

(3) If the application is deemed complete, the commission may determine not later than 90 calendar days after the application is deemed complete that the privatization project is not a public utility within the meaning of Section 216 and is therefore exempt from commission regulation, if the commission finds that the application clearly complies with the criteria in subdivisions (d) and (e). If the commission does not make this finding, then it shall proceed under the schedule established in subdivision (c).

(4) If the commission fails to make a written determination as to the completeness of the application within 60 calendar days after receipt of the original or resubmitted application, the application shall be deemed complete for purposes of this section.

(c) Within 180 calendar days after the application is deemed complete, the commission shall determine whether the privatization project is a public utility within the meaning of Section 216 using the criteria in subdivisions (d) and (e). The commission may hold a hearing on the matter if the commission finds it to be necessary. No franchise, license, or service agreement between a privatizer and a local agency shall be entered into until the commission has either exempted the project or the 180-calendar-day period has expired, whichever comes first. Nothing in this section precludes a privatizer and the commission from mutually agreeing to a further extension of any time limit provided in this section.

(d) The commission may determine that a privatization project is not a public utility within the meaning of Section 216, and is therefore exempt from commission regulation if it finds that the franchise, license, or service agreement both demonstrates that the local agency retains sufficient jurisdiction to protect the public interest and adequately addresses all aspects of the provision of service which would otherwise be subject to commission regulation. In making its determination, the commission shall determine whether the local agency has complied with Section 54253 of the Government Code. The decision of the commission shall be final and conclusive in the absence of any subsequent changes.

(e) In making a determination pursuant to subdivision (c), the commission shall review the franchise, license, or service agreement to ensure that the agreement grants the local agency, at a minimum, all of the following:

(1) Exclusive authority to establish all rates and rate changes charged to the public.

(2) Approval over any proposal of the privatizer to provide new, additional, or alternative service to any other public or private entity or to change the service fee paid to the privatizer by the local agency.

(3) Approval over the original design and construction of the project, including any changes in design, alterations, or additions to the project.

(4) Approval over any changes in ownership of the party or parties subject to the franchise, license, or service agreement.

(5) Authority to impose fines and penalties for noncompliance with any provision of the executed franchise, license, or service agreement, or for failure to provide the service within the time period agreed to in the franchise, license, or service agreement.

(6) Authority to ensure that the facility is adequately maintained.

(7) Adequate opportunity to monitor compliance with the agreement and to ensure the project will be operated to meet any applicable federal or state water quality standards or other applicable laws.

(8) Adequate opportunity to amend the agreement in the event of unforeseen circumstances or contingencies, such as flood, earthquake, fire, or other natural disasters or federal tax law changes.

(f) The commission may adopt whatever procedures it deems necessary to carry out the provisions of subdivisions (a), (b), (c), (d), and (e). The commission shall adopt regulations for reviewing any proposed changes to a contingent franchise, license, or service agreement to determine if the proposed changes could render the project a public utility within the meaning of Section 216. The commission shall charge each privatizer submitting an application pursuant to this section a fee which will be sufficient to defray the costs incurred in processing the application and rendering a decision upon it.

(g) As used in this section, “privatization project” means any waste water or sewerage project that is owned and operated by a privatizer pursuant to a franchise, license, or service agreement with a local agency, or any agency of that local agency, pursuant to which services are supplied for the benefit of the local agency, its residents, or both, or any agency of the state. “Project” includes, but is not limited to, financing, designing, constructing, repairing, replacing, maintaining, and operating collector systems, pumping stations, treatment plants, and lateral interceptors, and outfall sewers. “Local agency” means any city, county, city and county, special district, or county service area. “Privatizer” means any corporation, partnership, or natural person, excluding municipal corporations, which owns and operates a wastewater or sewerage project pursuant to a franchise, license, or service agreement with a local agency. “Privatization project,” as used in this section, includes the Santa Ana Watershed Project Authority’s Arlington Basin Groundwater Desalter Project, which will treat groundwater contaminated by wastewater.

(Amended by Stats. 1992, Ch. 669, Sec. 3. Effective January 1, 1993.)

10014.
  

The commission may enter into a contract with a local agency to provide any technical assistance needed to comply with Section 10013, if the contract includes provisions for the commission to be reimbursed for its estimated reasonable costs.

(Added by Stats. 1985, Ch. 1430, Sec. 3.)

PUCPublic Utilities Code - PUC1