AB2508 - Public Utilities Public Purpose Programs Fund.

Amended IN Assembly March 26, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 2508 Introduced by Assembly Member Hoover February 20, 2026 An act to amend Section 25711 of the Public Resources Code, and to amend Sections 379.6, 381, 381.1, 384.5, 399.4, 399.8, 399.20.3, 589, 718, 739.3, 2788, and 2851 of, and to add Section 318 to, the Public Utilities Code, relating to energy. LEGISLATIVE COUNSEL'S DIGEST AB 2508, as amended, Hoover. Public Utilities Public Purpose Programs Fund. Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations. Under existing law, the commission administers, or otherwise oversees, various public purpose programs, including energy efficiency and conservation programs, cost-effective energy efficiency programs, rate assistance programs for eligible food banks, and home insulation financial assistance programs. Under existing law, those programs are generally funded through a charge on electrical service, which is collected through customer rates. This bill would establish the Public Utilities Public Purpose Programs Fund. The bill would require the commission, upon appropriation by the Legislature, to allocate the moneys in the fund to fund certain public purpose programs and programs administered by electrical regional energy networks, as specified. The bill would require the Controller to transfer an unspecified sum on July 1 of each fiscal year, commencing with the 2026–27 fiscal year, from the Greenhouse Gas Reduction Fund to the fund. require the commission, no later than January 1 of each year, commencing January 1, 2027, to determine and publish the amount necessary to fund certain public purpose programs and programs administered by electrical regional energy networks for the following fiscal year, as provided. The bill would require the Controller to transfer, on July 1 of each fiscal year, from the Greenhouse Gas Reduction Fund to the Public Utilities Public Purpose Programs Fund moneys appropriated by the Legislature for that purpose. The bill would require all moneys in the Public Utilities Public Purpose Programs Fund to be allocated by the commission, upon appropriation by the Legislature, to fund the public purpose programs and programs administered by electrical regional energy networks, as provided. The bill would repeal various charges on electrical service that fund public purpose programs and, instead, provide mechanisms for funding those public purpose programs through the Public Utilities Public Purpose Programs Fund, 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 certain of the above provisions would be part of the act and a violation of a commission action implementing this 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. 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. (a) The Legislature finds and declares all of the following: (1) Customers of electrical corporations pay for public purpose programs through their electricity rates. These costs would more appropriately be funded by all taxpayers because the benefits accrue to society at large, not only to electrical customers or the electrical system. (2) Electricity rates are increasing in part due to the increasing costs of state climate change mitigation policies and programs administered by electrical corporations or third parties, funded by electrical customers, and mandated by statute or by the commission to reduce consumption of electricity or to provide environmental, health, and other benefits that accrue to all taxpayers. (3) Public purpose programs’ costs, such as low-income customer bill support and low-income weatherization assistance, represent a significant portion of these electricity rates and contribute to the increases in electricity rates. (b) (1) In order to provide some electricity rate relief and to more equitably allocate the costs of programs that benefit all taxpayers, not just utility customers, it is the intent of the Legislature to appropriate Greenhouse Gas Reduction Fund moneys sufficient to pay for certain electrical corporation public purpose programs and public purpose programs administered by third parties that are funded through electricity rates. (2) It is the intent of the Legislature that on and after January 1, 2024, 2027, certain current and future costs for public purpose programs funded by electrical customers, whether the program is required pursuant to the Public Utilities Code, pursuant to other statutes, or by order or decision of the Public Utilities Commission, be authorized for recovery through the Greenhouse Gas Reduction Fund. SEC. 2. Section 25711 of the Public Resources Code is amended to read: 25711. For purposes of implementing this chapter, the Electric Program Investment Charge Fund is hereby created in the State Treasury. (a) The commission shall administer the fund. (b) The Controller shall, as directed by the commission, disburse moneys in the fund for purposes of this chapter. (c) The commission may use moneys in the fund for the administration of this chapter, as authorized by the Public Utilities Commission and appropriated by the Legislature in the annual Budget Act. SEC. 3. Section 318 is added to the Public Utilities Code, to read: 318. (a) (1) For purposes of this section, “public purpose programs” means all of the following programs, except as specified in paragraph (2): (A) The programs funded through an electrical corporation’s public purpose program rate component as of December 31, 2023. 2026. (B) Other programs determined by the commission, based on a record developed in an open proceeding before the commission through which electrical corporations and other parties have an opportunity to participate, to provide public benefits. (2) “Public purpose programs” does not include the Family Electric Rate Assistance program described in Section 739.12 or the California Alternate Rates for Energy (CARE) program established pursuant to Section 739.1. (b) In order to ensure that the residents of this state continue to receive safe, reliable, affordable, and environmentally sustainable electrical service, it is the policy of this state and the intent of the Legislature that low-income bill support continue to be provided and that prudent investments in energy efficiency, renewable energy, research, development, and demonstration continue to be made. (c) (1) The Public Utilities Public Purpose Programs Fund is hereby established in the State Treasury. (2) All moneys in the Public Utilities Public Purpose Programs Fund shall be allocated by the commission, upon appropriation by the Legislature, to fund the public purpose programs and programs administered by electrical regional energy networks, consistent with Section 381. (3) The Controller shall transfer the sum of ____ dollars ($____) on July 1 of each fiscal year, commencing with the 2026–27 fiscal year, from the Greenhouse Gas Reduction Fund, established pursuant to Section 16428.8 of the Government Code, to the Public Utilities Public Purpose Programs Fund. (2) (A) The Legislature may appropriate moneys from the Greenhouse Gas Reduction Fund, established pursuant to Section 16428.8 of the Government Code, to the Public Utilities Public Purpose Programs Fund. (B) No later than January 1 of each year, commencing January 1, 2027, the commission shall determine and publish the amount necessary to fund the public purpose programs and programs administered by electrical regional energy networks for the following fiscal year, consistent with Section 381. The Legislature may consider this amount when considering what amount, if any, to appropriate. (C) Upon appropriation, the Controller shall transfer, on July 1 of each fiscal year, commencing with the 2027–28 fiscal year, the amount appropriated by the Legislature from the Greenhouse Gas Reduction Fund to the Public Utilities Public Purpose Programs Fund. (3) All moneys in the Public Utilities Public Purpose Programs Fund shall be allocated by the commission, upon appropriation by the Legislature, to fund the public purpose programs and programs administered by electrical regional energy networks, consistent with Section 381. (d) In implementing this section, the commission shall consider the continuity of the public purpose programs and minimizing customer disruptions. SEC. 4. Section 379.6 of the Public Utilities Code is amended to read: 379.6. (a) (1) It is the intent of the Legislature that the self-generation incentive program increase deployment of distributed generation and energy storage systems to facilitate the integration of those resources into the electrical grid, improve efficiency and reliability of the distribution and transmission system, and reduce emissions of greenhouse gases, peak demand, and ratepayer costs. It is the further intent of the Legislature that the commission, in future proceedings, provide for an equitable distribution of the costs and benefits of the program. (2) For gas corporations, the commission, in consultation with the Energy Commission, may authorize the annual collection of not more than double the amount authorized for the self-generation incentive program in the 2008 calendar year, through December 31, 2024. (3) (A) For electrical corporations, the commission, in consultation with the Energy Commission, may authorize the annual allocation from the Public Utilities Public Purpose Programs Fund of not more than double the amount authorized for the self-generation incentive program in the 2008 calendar year, through December 31, 2024. (B) The commission shall require the administration of the program for distributed energy resources originally established pursuant to Chapter 329 of the Statutes of 2000 until January 1, 2026. (C) On January 1, 2026, the commission shall provide repayment of all unallocated funds collected pursuant to this section to reduce ratepayer costs, unless those unallocated funds originated from the Public Utilities Public Purpose Programs Fund in which case those unallocated funds shall be credited to the Public Utilities Public Purpose Programs Fund. (b) (1) Eligibility for incentives under the self-generation incentive program that are funded through paragraph (2) or (3) of subdivision (a) shall be limited to distributed energy resources that the commission, in consultation with the State Air Resources Board, determines will achieve reductions in emissions of greenhouse gases pursuant to the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code). (2) On or before July 1, 2015, the commission shall update the factor for avoided greenhouse gas emissions based on both the most recent data available to the State Air Resources Board for greenhouse gas emissions from electricity sales in the self-generation incentive program administrators’ service areas and current estimates of greenhouse gas emissions over the useful life of the distributed energy resource, including consideration of the effects of the California Renewables Portfolio Standard. (3) The commission shall adopt requirements for energy storage systems to ensure that eligible energy storage systems reduce the emissions of greenhouse gases. (c) Eligibility for the funding of any combustion-operated distributed generation projects using fossil fuel is subject to all of the following conditions: (1) An oxides of nitrogen (NO x ) emissions rate standard of 0.07 pounds per megawatthour and a minimum efficiency of 60 percent, or any other NO x emissions rate and minimum efficiency standard adopted by the State Air Resources Board. A minimum efficiency of 60 percent shall be measured as useful energy output divided by fuel input. The efficiency determination shall be based on 100-percent load. (2) Combined heat and power units that meet the 60-percent efficiency standard may take a credit to meet the applicable NO x emissions standard of 0.07 pounds per megawatthour. Credit shall be at the rate of one megawatthour for each 3,400,000 British thermal units (Btus) of heat recovered. (3) The customer receiving incentives shall adequately maintain and service the combined heat and power units so that during operation the system continues to meet or exceed the efficiency and emissions standards established pursuant to paragraphs (1) and (2). (4) Notwithstanding paragraph (1), a project that does not meet the applicable NO x emissions standard is eligible if it meets both of the following requirements: (A) The project operates solely on waste gas. The commission shall require a customer that applies for an incentive pursuant to this paragraph to provide an affidavit or other form of proof that specifies that the project shall be operated solely on waste gas. Incentives awarded pursuant to this paragraph shall be subject to refund and shall be refunded by the recipient to the extent the project does not operate on waste gas. As used in this paragraph, “waste gas” means natural gas that is generated as a byproduct of petroleum production operations and is not eligible for delivery to the utility pipeline system. (B) The air quality management district or air pollution control district, in issuing a permit to operate the project, determines that operation of the project will produce an onsite net air emissions benefit compared to permitted onsite emissions if the project does not operate. The commission shall require the customer to secure the permit before receiving incentives. (d) In determining the eligibility for the self-generation incentive program, minimum system efficiency shall be determined either by calculating electrical and process heat efficiency as set forth in Section 216.6, or by calculating overall electrical efficiency. (e) Eligibility for incentives under the self-generation incentive program shall be limited to distributed energy resource technologies that the commission determines meet all of the following requirements: (1) The distributed energy resource technology shifts onsite energy use to off-peak time periods or reduces demand from the grid by offsetting some or all of the customer’s onsite energy load, including, but not limited to, net peak electric load. (2) The distributed energy resource technology is commercially available. (3) The distributed energy resource te [Text truncated for display. Full text available on Congress.gov.]