AB1975 - Electrical corporations: distribution grid utilization metric.

Amended IN Assembly April 27, 2026 Amended IN Assembly March 03, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 1975 Introduced by Assembly Member Schultz February 13, 2026 An act to add Section 762.6 to the Public Utilities Code, relating to electricity. LEGISLATIVE COUNSEL'S DIGEST AB 1975, as amended, Schultz. Electrical corporations: distribution grid utilization metric. Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical 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 the commission, on or before December 31, 2027, to establish develop a methodology for calculating a distribution grid utilization metric that calculates electrical load as a percentage of rated capacity, metric, as specified. The bill would require each large electrical corporation, each calendar quarter, in a manner, frequency, and geographic scope determined by the commission, to submit a publicly available report to the commission with the results of the large electrical corporation’s distribution grid utilization metric calculations, as specified. The bill would require the commission to annually establish and periodically update, as appropriate, a minimum value for the grid utilization metric within distribution grid utilization standard for each large electrical corporation’s distribution grid, corporation and would require that to ensure the distribution grid utilization metric minimum value increase annually, as provided. standard encourage s, and does not inhibit, electrification. The bill would require authorize the commission to establish direct each large electrical corporation to implement programs, rate designs, or other incentives, or to establish financial performance-based incentives or disincentives correlated with achieving the distribution grid utilization metric minimum value, as specified, and would require each large electrical corporation, on or before July 31, 2028, to propose grid utilization programs to achieve the grid utilization metric minimum value, standard, as specified. Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime. Because the above-described provisions would be part of the act and a violation of a commission action implementing the bill’s requirements would be a crime, this 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. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill Text The people of the State of California do enact as follows: SECTION 1. The Legislature finds and declares all of the following: (a) Utility spending on electrical grid distribution system expansion can directly impacts impact energy affordability. (b) Electricity consumption is projected to increase dramatically in the next decade and beyond. (c) In most hours of the year, electrical distribution circuits transmit much less electricity than their rated capacity. (d) If increases in electricity consumption occur at times when portions of the electrical distribution circuits system are not operating near their rated capacity, investments in distribution system expansion can be avoided despite the increased consumption. may be avoided. (e) Increasing electrical grid distribution system utilization reduces can reduce the average cost of the distribution rate, reducing services, which may help lower electricity rates. (f) It is in the interest of the state to promote energy affordability by minimizing distribution system costs while consistent with maintaining electrical system safety and reliability. SEC. 2. Section 762.6 is added to the Public Utilities Code, to read: 762.6. (a) On or before December 31, 2027, the commission shall, in a new or existing public proceeding, establish a grid utilization metric that calculates electrical load as a percentage of rated capacity. develop, to the extent feasible, a methodology for calculating a distribution grid utilization metric. The distribution grid utilization metric shall do both of the following: may be calculated as the average electricity delivered over a distribution segment over a period of time divided by that distribution segment’s maximum electrical capacity, expressed as a percentage. The commission shall determine both the geographic scope of each distribution segment and the time period used in this calculation. (1) Be measured separately based on peak load and average load. (2) Be designed so that it can be calculated on individual distribution circuits and averaged across multiple distribution circuits. (b) Each large electrical corporation shall, each calendar quarter, in a manner and frequency, and the geographic scope, determined by the commission, submit a publicly available report to the commission with the results of the large electrical corporation’s distribution grid utilization metric calculations on individual distribution circuits, individual substations, and the entire service territory of the large electrical corporation. calculations. The report shall include, but not be limited to, all of the following: (c) The commission shall annually establish a minimum value for the grid utilization metric within each large electrical corporation’s distribution grid. The commission shall develop a process to ensure the imposition of the grid utilization metric minimum value encourages, and does not inhibit, electrification. The grid utilization metric minimum value shall increase annually at the commission’s discretion. The increase may be measured by distribution planning area or other segmentation, at the commission’s discretion. (d) The commission shall establish financial performance-based incentives or disincentives correlated with achieving the grid utilization metric minimum value established in subdivision (c), if the incentive or disincentive results in a net benefit for retail customers. The commission shall leverage the performance-based incentive or disincentive to encourage large electrical corporations to propose the most cost-effective solutions for providing safe and reliable electrical service. (e) On or before July 31, 2028, each large electrical corporation shall propose grid utilization programs to achieve the grid utilization metric minimum value established in subdivision (c). In evaluating grid utilization programs, the commission shall consider all of the following and shall only approve a grid utilization program that is feasible and cost effective: (1) Any costs or benefits to utility customers, including rate impacts. (2) Reliability of electrical service and the electrical grid system. (3) Maximizing the use of existing electrical distribution grid infrastructure. (4) Maximizing the use of demand flexibility technologies to increase electrical load capacity and electrical grid services. (f) The commission shall establish a method of quantifying ratepayer savings through increased grid utilization. (1) The distribution grid utilization metric for each distribution segment, as determined by the commission pursuant to subdivision (a). (2) Data on the performance of programs that are intended to increase distribution system utilization. (3) Data sufficient to identify opportunities to improve distribution grid utilization and reduce distribution system costs. (c) The commission shall establish and periodically update, as appropriate, a distribution grid utilization standard for each large electrical corporation. In establishing each standard, the commission shall ensure that the distribution grid utilization standard encourages, and does not inhibit, electrification. (d) (1) In support of a distribution grid utilization standard established pursuant to subdivision (c), the commission may direct each large electrical corporation to implement programs, rate designs, or other incentives, or may establish financial performance-based incentives or disincentives, consistent with paragraph (2), correlated with achieving the distribution grid utilization standard, if the programs, rate designs, incentives, or disincentives are cost-effective and result in a net benefit for retail customers. (2) The commission may establish a performance-based incentive or disincentive only after a methodology for calculating a distribution grid utilization metric has been developed pursuant to subdivision (a), large electrical corporation performance has been measured over a reasonable period of time, and the commission is able to evaluate the extent to which large electrical corporation actions and programs are found to have an impact on utilization, in order to then leverage the performance-based incentive or disincentive to encourage large electrical corporations to deploy the most cost-effective solutions for providing safe and reliable electrical service. (g) (e) For purposes of this section, “large electrical corporation” has the same meaning as defined in Section 2827. SEC. 3. No reimbursement is required by this act pursuant to Section 6 of Article XIII B 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 XIII B of the California Constitution.