AMENDED IN ASSEMBLY JULY 17, 2025

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AMENDED IN SENATE MAY 6, 2025

AMENDED IN SENATE MARCH 26, 2025

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

95

Introduced by Senator Stern

February 19, 2025

An act to add Section 8371.6 to the Public Utilities Code, relating to energy.

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

LEGISLATIVE COUNSEL’S DIGEST

Existing law requires the Public Utilities Commission (PUC), in consultation with the State Energy Resources Conservation and Development Commission and the Independent System Operator, to take specified actions by December 1, 2020, to facilitate the commercialization of microgrids for distribution customers of large electrical corporations, including, among other actions, by, without shifting costs between ratepayers, developing methods to reduce barriers for microgrid deployment. Under existing law, the PUC requires certain large electrical corporations to jointly develop a Microgrid Incentive Program to fund clean energy microgrids to support the critical needs of vulnerable populations impacted by a grid outage.

This bill would require the PUC to require each electrical corporation to provide to the commission, on or before January 15, 2026, the status of any awarded or unallocated funds collected for the Microgrid Incentive Program. The bill would require the commission, after reviewing that information, if it determines additional actions actions, using funds collected on or before January 1, 2026, are needed, to consider the use of a third-party administrator and to ensure that unallocated funds are allocated to areas that have experienced 2 or more deenergization events, prioritizing vulnerable communities, including access and functional needs populations, and prioritizing customers that operate critical community infrastructure that supports resiliency during a deenergization event. The bill would require, if there are remaining unallocated funds on January 1, 2027, that those funds to be returned to ratepayers.

Under existing law, a violation of any order, decision, rule, direction, demand, or requirement of the PUC is a crime.

Because a violation of a PUC action implementing the 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.

Section 8371.6 is added to the Public Utilities Code, to read:

8371.6.

(a) (1) The commission shall require each electrical corporation to provide to the commission, on or before January 15, 2026, the status of any awarded or unallocated funds collected for purposes of the Microgrid Incentive Program established pursuant to commission Decision 21-01-018 (January 21, 2021), Decision Adopting Rates, Tariffs, and Rules Facilitating the Commercialization of Microgrids Pursuant to Senate Bill 1339 and Resiliency Strategies, and Decision 23-04-034 (April 14, 2023), Decision Adopting Implementation Rules for the Microgrid Incentive Program.

(2) The commission shall review the status of the unallocated funds of each electrical corporation provided pursuant to paragraph (1) and determine whether additional actions actions, using the funds collected on or before January 1, 2026, are needed to advance the Microgrid Incentive Program.

(3) If the commission determines, after conducting a the review required pursuant to paragraph (2), that additional actions are needed to advance the Microgrid Incentive Program for the electrical corporation, the commission shall do both of the following:

(A) Consider the use of a third-party administrator to administer the Microgrid Incentive Program for the electrical corporation.

(B) (i) In addition to the requirements of the Microgrid Incentive Program, ensure the remaining unallocated funds are allocated to areas that have experienced two or more deenergization events, prioritizing vulnerable communities, including access and functional needs populations who rely on electric medical devices and refrigerated medication, and prioritizing customers that operate critical community infrastructure that support resiliency during a deenergization event.

(c) For purposes of this section, all of the following definitions apply:

(1) “Access and functional needs population” has the same meaning as defined in Section 8593.3 of the Government Code.

(2) “Critical community infrastructure” has the same meaning as defined in Section 90100 of the Public Resources Code.

(3) “Deenergization event” has the same meaning as defined in Section 8385.

(4) “Vulnerable communities” has the same meaning as defined in Section 71340 of the Public Resources Code.

SEC. 2.

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.