CaliforniaCalifornia sets tighter rules for utility cost accounts
SB 1098 makes regular rate reviews the main way to set electric and gas utilities' allowed revenue and requires closer checks of special cost accounts.
What it does
Regulators would generally allow special cost accounts only for costs they cannot reasonably predict during regular rate reviews. They must give written reasons, though exceptions may cover certain discounts or shutoff-related accounts.
Regulators would consider whether utilities should pay part of tracked costs, earn less on some investments, and have an end date for each account, when appropriate.
Regulators would review accounts authorized before 2027 and close those they find unnecessary. Accounts in effect on January 1, 2027, keep their rate treatment until reviewed.
Argument forWritten explanations and public reviews could help customers see why utilities seek extra cost recovery and whether special accounts remain needed.
Argument againstClosing wildfire or emergency cost accounts when regulators find regular reviews adequate might leave utilities less flexibility to recover later unexpected costs.
More detail
The commission must favor scheduled rate reviews and generally limit special cost accounts to costs it cannot reasonably predict there. The rate review policy covers electric and gas utilities. The account rules cover utility accounts that track specific costs. Regulators must explain in writing why an account is needed, why its costs are beyond the utility's control, and why those costs cannot be predicted well enough. They must move a program into forecast-based rates when enough past cost data exist. They may make exceptions for some costs outside the required older-account review, such as low-income discounts, or for accounts meant to discourage shutoffs for unpaid bills. Accounts expressly required by law remain allowed.
When creating or keeping a special cost account, the commission must consider cost sharing, lower allowed returns on certain investments, and an account end date. This applies when regulators create or continue accounts that track utility costs. Regulators consider these options when appropriate. They do not have to adopt each one. A lower return would apply to certain capital costs recovered through an account.
The commission must review older accounts, close those it finds unnecessary, and post a public report on each utility's account reviews. The review covers accounts authorized by law or the commission before January 1, 2027. The commission must close an account it finds no longer needed. This includes accounts for wildfire or emergency costs when regular rate reviews can adequately cover those costs. Reviews occur in the next regular rate case cycle or at a similar recurring interval. The existing rate treatment lasts until that review.
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Where it stands
- Introduced
- Passed Senate
- Passed Assembly
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Sep 30Chaptered by Secretary of State. Chapter 1008, Statutes of 2026.Latest
- Sep 30Approved by the Governor Gavin Newsom.Became Law
- Sep 9Enrolled and presented to the Governor at 2 p.m.To Governor
- Sep 1
- Vote recorded SB 1098 Pérez Senate Third Reading By Petrie-Norris. Result: pass.Lower
- Aug 31Assembly amendments concurred in. (Ayes 30. Noes 10.) Ordered to engrossing and enrolling.Major
- Vote recorded W/O REF. TO FILE. Result: pass.Upper
- Aug 31Unanimous consent granted to take up without reference to file.
- Aug 31In Senate. Concurrence in Assembly amendments pending.
- Aug 31Read third time. Passed. (Ayes 50. Noes 15. Page 7071.) Ordered to the Senate.Passed Assembly
- Aug 28Ordered to third reading.Minor
- Aug 28Read third time and amended.Major
- Aug 28Joint Rule 61(b)(16) suspended. (Ayes 57. Noes 1. Page 6819.)
- Aug 20Ordered to third reading.Minor
- Aug 20Read third time and amended.Major
- Aug 13Read second time. Ordered to third reading.Minor
- Vote recorded Do pass. Result: pass.Lower
- Aug 13From committee: Do pass. (Ayes 11. Noes 3.) (August 13).Minor
- Aug 13Assembly Rule 63 suspended.
- Aug 5August 5 set for first hearing. Placed on suspense file.
- Jun 29Read second time and amended. Re-referred to Com. on APPR.Major
- Jun 25From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 11. Noes 3.) (June 24).Major
- Jun 24
- Vote recorded Do pass as amended and be re-referred to the Committee on [Appropriations]. Result: pass.Lower
- Jun 4Referred to Com. on U. & E.Minor
- May 27In Assembly. Read first time. Held at Desk.Minor
- Vote recorded 3rd Reading. Result: pass.Upper
- May 27Read third time. Passed. (Ayes 30. Noes 9. Page 4485.) Ordered to the Assembly.Passed Senate
- May 14Read second time. Ordered to third reading.Minor
- Vote recorded Do pass. Result: pass.Upper
- May 14From committee: Do pass. (Ayes 5. Noes 2. Page 4264.) (May 14).Minor
- May 8Set for hearing May 14.
- May 4May 4 hearing: Placed on APPR. suspense file.
- Vote recorded Placed on suspense file. Result: pass.Upper
- Apr 24Set for hearing May 4.
- Apr 22From committee: Do pass and re-refer to Com. on APPR. (Ayes 12. Noes 3. Page 3973.) (April 21). Re-referred to Com. on APPR.Minor
- Apr 21
- Vote recorded Do pass, but first be re-referred to the Committee on [Appropriations]. Result: pass.Upper
- Apr 16Set for hearing April 21.
- Apr 8Re-referred to Com. on E., U & C.Minor
- Mar 24From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS.Major
- Feb 26Referred to Com. on RLS.Minor
- Feb 17From printer. May be acted upon on or after March 16.
- Feb 13Introduced. Read first time. To Com. on RLS. for assignment. To print.Introduced
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