SB 1168: Data centers: rate structures.

Existing law vests the Public Utilities Commission (PUC) with regulatory authority over public utilities, including gas corporations and electrical corporations, while local publicly owned electric utilities are under the direction of their governing boards. Existing law establishes a surcharge on all natural gas consumed in the state to fund certain low-income assistance programs, cost-effective energy efficiency and conservation activities, and public interest research and development. Under existing law, the surcharge is in addition to any other charges for natural gas sold or transported for consumption, as defined, in this state. Existing law exempts from the surcharge gas customers within the service territories of municipalities, districts, or public agencies that offer specified services or programs, as specified. Under existing law, a violation of the Public Utilities Act, or any order, decision, rule, direction, demand, or requirement of the PUC, is a crime. utilities. 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 impose surcharges, on and after January 1, 2027, on natural gas consumed by a data center, as defined, or a person that consumes natural gas to produce electricity primarily for a data center, at an unspecified rate, and on electricity consumed by a data center that is purchased from an electric utility, which includes an electrical corporation and local publicly owned electric utility, at an unspecified rate, and would require the Energy Commission to fix the rate for both surcharges at a public meeting in each November for each calendar year starting the following January. The bill would specify that the above-described surcharges apply to persons that meet specified criteria, including, among other things, that during any single month beginning January 1, 2027, the person purchased natural gas from a gas corporation, or electricity from an electric utility, that was wholly or partially consumed by a data center. The bill would require a gas corporation and electric utility to collect the applicable surcharge from each data center, except as provided. The bill would authorize a person to apply to a gas corporation or electric utility, as applicable, for an exemption from a surcharge, as specified. require the commission to assess opportunities for rate structures to ensure data centers pay a reasonable share of their costs associated with transmission and distribution needs, identify mechanisms to ensure that data centers pay for their proportionate share of load increases and procurements needed to reliably serve their loads using nonemitting resources, and structure rates to alleviate cost pressures on residential ratepayers.