AMENDED IN ASSEMBLY AUGUST 21, 2026

AMENDED IN ASSEMBLY JUNE 29, 2026

AMENDED IN ASSEMBLY JUNE 15, 2026

AMENDED IN SENATE MAY 14, 2026

AMENDED IN SENATE APRIL 13, 2026

AMENDED IN SENATE MARCH 25, 2026

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

93

Introduced by Senator Stern

February 20, 2026

An act to add the heading of Article 1 (commencing with Section 328) to, and to add Article 2 (commencing with Section 329) to, Chapter 2.2 of Part 1 of Division 1 of the Public Utilities Code, relating to natural gas.

Vote: majority   Appropriation: no   Fiscal committee: yes   Local program: yes

LEGISLATIVE COUNSEL’S DIGEST

Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including 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. Existing law requires, until at least December 31, 2029, each gas corporation to submit to the commission a map that includes, among other things, the location of all potential gas distribution line replacement projects identified in its distribution integrity management plan and any foreseeable gas distribution pipeline replacements, as provided.

This bill would require each gas corporation to submit an annual report to the commission that describes its expenditures associated with gas distribution infrastructure replacement and upgrade projects, as provided. The bill would require the commission, before authorizing recovery of costs associated with a gas distribution infrastructure replacement and upgrade project, to consider whether cost-effective electrification alternatives or nonpipeline alternatives could reasonably avoid or reduce the costs, and to adopt rules implementing this requirement, including a reasonable cost threshold below which the requirement would not apply. The bill would require the commission to evaluate whether depreciation schedules for gas distribution infrastructure replacement and upgrade projects appropriately reflect projected reductions in gas demand and consider alternative depreciation methodologies that minimize future ratepayer exposure to stranded asset costs. The bill would require the commission, as part of its long-term gas planning rulemaking or a successor proceeding, to consider a framework for the depreciation of gas distribution infrastructure that reflects reasonably foreseeable changes in gas demand and is designed to minimize future ratepayer exposure to stranded asset costs, and would authorize the commission to apply the framework in evaluating the depreciation of, and cost recovery for, gas distribution infrastructure replacements and upgrades.

Under existing law, a violation of the Public Utilities Act or an order, decision, rule, direction, demand, or requirement of the commission is a crime.

Because the above provisions would be part of the Public Utilities Act and a violation of a commission action implementing this bill’s requirements would be a crime, the 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.

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

SECTION 1.

This act shall be known, and may be cited, as the Natural Gas Ratepayer Protection Act.

SEC. 2.

The heading of Article 1 (commencing with Section 328) is added to Chapter 2.2 of Part 1 of Division 1 of the Public Utilities Code, to read:

Article 1. General Provisions

SEC. 3.

Article 2 (commencing with Section 329) is added to Chapter 2.2 of Part 1 of Division 1 of the Public Utilities Code, to read:

Article 2. Natural Gas Transition

329.

(a) Each gas corporation shall submit an annual report to the commission that describes its expenditures, during the pendency of its current gas corporation’s general rate case cycle, associated with gas distribution infrastructure replacement and upgrade projects and includes all of the following:

(1) Planned and forecasted expenditures for each gas distribution infrastructure replacement and upgrade project. projects, as determined by the commission, in alignment with information already reported through general rate case, risk assessment mitigation phase, or successor proceedings.

(2) The status of gas distribution infrastructure replacement and upgrade projects planned, initiated, completed, deferred, or canceled since the gas corporation’s most recent immediately preceding general rate case decision.

(3) The estimated remaining costs and projected completion dates for ongoing gas distribution infrastructure replacement and upgrade projects.

(4) Any expenditures recorded in any catastrophic event memorandum account, wildfire memorandum account, or other memorandum or balancing account used to recover costs associated with wildfire response, recovery, or gas distribution system restoration. during the gas corporation’s general rate case cycle.

(5) Any material changes in projected customer counts, projected gas throughput, or other assumptions used to justify the gas distribution infrastructure replacement and upgrade projects, including an assessment of stranded asset risk. risk and the distributional impacts of stranded assets on remaining gas ratepayers.

(6) Available electrification and nonpipeline alternatives. alternatives implemented or evaluated since the gas corporation’s immediately preceding general rate case decision.

(b) (1) The commission may require the report required pursuant to subdivision (a) to be submitted in a format that facilitates public review and comparison of authorized and actual expenditures.

329.1.

SEC. 4.

No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.