California AB 2338

Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations and gas corporations. Existing law authorizes the commission to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable. This bill would require the commission to require every electrical corporation or gas corporation, as part of every general rate case application, to submit an inflation-constrained rate case scenario in which cumulative increases in annual expenditures proposed to be authorized in that proceeding do not exceed the projected federal social security beneficiary cost-of-living adjustment, and to compare that inflation-constrained rate case scenario with the primary rate case plan submitted by the corporation. The bill would authorize the commission to authorize expenditures in excess of the inflation-constrained rate case scenario if it determines that the electrical corporation or gas corporation has provided clear and convincing evidence that a higher level of expenditures is necessary to ensure the safe and reliable operation of its electrical system or gas system. The bill would require the commission to apply heightened scrutiny to a request that is not a general rate case application that is submitted by an electrical corporation or gas corporation that is likely to increase total systemwide expenditures beyond the projected federal social security beneficiary cost-of-living adjustment. Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime. Because the above-described provisions would be part of the act and a violation of a commission action implementing the above-described provisions would be a crime, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.