AB2589 - Public utilities: rates: changes to federal law.

Amended IN Senate June 29, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 2589 Introduced by Assembly Member Irwin (Principal coauthor: Assembly Member Harabedian) February 20, 2026 An act to add amend Section 752 to 751 of the Public Utilities Code, relating to public utilities. LEGISLATIVE COUNSEL'S DIGEST AB 2589, as amended, Irwin. Public utilities: rates: changes to federal law. Existing law vests the Public Utilities Commission with regulatory authority over public 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. Existing law requires the commission to evaluate the full effect of the enactment of federal House Resolution 1 (Public Law 115-97) upon on the expenses and tax liabilities incurred by certain public utilities for the payment of federal taxes, and, if the commission determines that the projected expenses and tax liabilities for federal taxes that the commission has authorized in the rates for a public utility are materially affected by its enactment, to adjust the rates of the public utility to reflect the changes in projected expenses and tax liabilities in light of the changes in federal law. This bill would require the commission to evaluate the full effect of all federal legislation that becomes law, including the recent federal House Resolution 1 (Public Law 119-21), upon on the expenses and tax liabilities incurred by those public utilities for the payment of federal taxes and, if the commission determines that the projected expenses and tax liabilities for federal taxes that the commission has authorized in the rates for a public utility are materially affected by the enactment, to adjust the rates of the public utility to reflect the changes in projected expenses and tax liabilities in light of the changes in federal law, as specified. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. Section 751 of the Public Utilities Code is amended to read: 751. (a) This section only applies only to those public utilities over which the commission exercises its authority to fix rates and only to the extent the revenue requirements of the public utility were based upon the tax rates in effect at the time rates were fixed for the public utility by the commission. This section does not limit the discretionary authority of the commission to adjust any incentives provided pursuant to any state supervised or administered program, including the state’s telecommunications universal service programs administered pursuant to Chapter 1.5 (commencing with Section 270). (b) The commission shall evaluate the full effect of all federal legislation that becomes law, including the enactment of federal House Resolution 1 (Public Law 115-97) upon and federal House Resolution 1 (Public Law 119-21), on the expenses and tax liabilities incurred by public utilities for the payment of federal taxes. If the commission determines that the projected expenses and tax liabilities for federal taxes that the commission has authorized in the rates for a public utility are materially affected by the enactment of federal House Resolution 1 (Public Law 115-97), 115-97), federal House Resolution 1 (Public Law 119-21), or any other federal law, the commission shall adjust the rates of the public utility to reflect the changes in projected expenses and tax liabilities in light of the changes in federal law. This section does not limit the discretionary authority of the commission to determine the full effect of the changes in federal tax law on each public utility’s cost of service, to utilize appropriate mechanisms at its disposal to track changes and adjust rates accordingly, and to allocate the impacts from changes in federal tax law over the period of time that results in the most reasonable allocation based on the particular circumstances of each public utility. SECTION 1. Section 752 is added to the Public Utilities Code , to read: 752. (a) This section applies only to a public utility over which the commission exercises its authority to fix rates and only to the extent the revenue requirements of the public utility were based upon the tax rates in effect at the time rates were fixed for the public utility by the commission. This section does not limit the discretionary authority of the commission to adjust an incentive provided pursuant to a state supervised or administered program, including the state’s telecommunications universal service programs administered pursuant to Chapter 1.5 (commencing with Section 270). (b) The commission shall evaluate the full effect of all federal legislation that becomes law, including federal House Resolution 1 (Public Law 119-21), upon the expenses and tax liabilities incurred by public utilities for payment of federal taxes. If the commission determines that the projected expenses and tax liabilities for federal taxes that the commission has authorized in the rates for a public utility are materially affected by the enactment of federal House Resolution 1 (Public Law 119-21) or another federal law, the commission shall adjust the rates of the public utility to reflect the changes in projected expenses and tax liabilities in light of the changes in federal law. This section does not limit the discretionary authority of the commission to determine the full effect of the changes in federal tax law on each public utility’s cost of service, to use appropriate mechanisms at its disposal to track changes and adjust rates accordingly, and to allocate the impacts from changes in federal tax law over the period of time that results in the most reasonable allocation based on the particular circumstances of each public utility.