SB 1359: Gas Transition Responsibility and Electrification Act.

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.

This bill would require that the obligation of a gas corporation to furnish service under these provisions be interpreted consistent with the states greenhouse gas emission reduction mandates and policies promoting building electrification, and would authorize the commission to authorize the retirement or discontinuation of natural gas distribution infrastructure where the commission finds that continued operation is inconsistent with the public interest, as provided.

Existing law requires the commission, in order to achieve transparency and accountability for rate revenues and best value for ratepayers, to consider, among other things, providing revenues for all activities identified and required by certain rules and procedures governing the operation, maintenance, repair, and replacement of commission-regulated gas pipeline facilities, including any adjustment of allowance for lost and unaccounted for natural gas related to actual leakage volumes.

This bill would require the commission, in determining just and reasonable rates, to ensure that costs associated with avoidable natural gas leakage, including methane emissions resulting from inadequate maintenance or infrastructure replacement delays, are not recovered from ratepayers. The bill would, beginning January 1, 2030, prohibit the commission, when establishing rates for a gas corporation, from allowing recovery from ratepayers for the value of natural gas lost to the atmosphere from facilities under the control of the gas corporation, as specified.

This bill would require the commission, before approving any capital investment by a gas corporation for natural gas distribution infrastructure exceeding $5,000,000, $10,000,000, to determine that the proposed investment is consistent with the states greenhouse gas emission reduction targets, and would require a gas corporation seeking approval of an investment to demonstrate certain requirements are satisfied. provide evidence regarding specified factors. The bill would require the commission to develop a framework for the orderly and equitable transition of the natural gas distribution system, as provided. The bill would prohibit the commission from approving a gas corporation to recover from ratepayers the costs of hydrogen blending, as defined, in a gas distribution system unless the commission makes a written finding that specified conditions are met. The bill would require each gas corporation to establish a Gas Infrastructure Decommissioning Trust, require the trust to be funded through shareholder contributions, and prohibit contributions to the trust from being recovered from ratepayers. The bill would require each gas corporation, beginning January 1, 2030, to annually file with the commission a climate transition risk report, as specified. The bill would prohibit a gas corporation, beginning January 1, 2030, from extending new natural gas service to residential or mixed-use developments unless the applicant pays the full cost of the extension, including a surcharge reflecting the expected cost of future decommissioning. all costs that would otherwise be borne by existing ratepayers. The bill would require the commission to initiate a rulemaking to implement the above-described provisions on or before July 1, 2029.

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 bills 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.