SB875 - Public utilities: eminent domain: just compensation.

Amended IN Senate April 06, 2026 Amended IN Senate February 24, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Senate Bill No. 875 Introduced by Senator Wiener (Principal coauthors: Assembly Members Haney and Stefani) January 06, 2026 An act to amend Sections 1240.650, 1245.250, and 1268.610 1240.650 and 1245.250 of the Code of Civil Procedure, and to amend Section 851 of Sections 851 and 1411 of, and to add Sections 1410.5 and 1425 to, the Public Utilities Code, relating to public utilities. LEGISLATIVE COUNSEL'S DIGEST SB 875, as amended, Wiener. Public utilities: eminent domain. domain: just compensation. (1) Existing law, the Eminent Domain Law, authorizes a public entity to exercise the power of eminent domain to acquire property for a public use if the use for which the property is sought to be taken is a more necessary public use than the use to which the property is appropriated, as specified. Existing law specifies that if property has been appropriated to public use by any person other than a public entity, the use of the property by a public entity for the same or any other public use is a more necessary use than the current use. Existing law also specifies that if property that has been appropriated to a public use is electrical, gas, or water public utility property, as defined, that the public entity intends to put to the same use, the presumption of a more necessary use is a rebuttable presumption affecting the burden of proof, except as specified. Existing law requires a court to award a defendant their litigation expenses if the eminent domain proceeding is dismissed or if there is a final judgment that the plaintiff cannot acquire the property by eminent domain, as provided. This bill would specify that if exempt from that rebuttable presumption property that has been appropriated to a public use that is electrical, gas, or water electrical or gas public utility property that a public entity within the Pacific Gas and Electric Company service area intends to put to the same use, the presumption of a more necessary use is conclusive and not rebuttable. The bill would specify that the above-described litigation expenses provisions do not apply to those proceedings. area. (2) Existing law authorizes a public entity to exercise the power of eminent domain only if it has adopted a resolution of necessity, as specified. Under existing law, a resolution of necessity adopted by the governing body of a public entity conclusively establishes that, among other matters, the public interest and necessity require the project. Existing law specifies that, if a taking is by a local public entity and the property is electrical, gas, or water public utility property, the resolution of necessity creates a rebuttable presumption that those matters are true. This bill would provide that, if a taking is by a local public entity within the Pacific Gas and Electric Company service area and the property is electrical, gas, or water electrical or gas public utility property, and the local public entity intends to put the property to the same use, property, the resolution of necessity instead creates a conclusive and not rebuttable presumption that those matters are true. conclusively establishes those matters. (3) Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations and gas corporations. Existing law prohibits public utilities, other than certain common carriers, from selling, leasing, assigning, mortgaging, or otherwise disposing of, or encumbering, its assets that are necessary or useful in the performance of its duties to the public, unless the public utility has secured an order or approval from the commission to do so, as provided. Existing law requires, for any voluntary or involuntary change in ownership of assets from an electrical corporation or gas corporation to ownership by a public entity, the commission to determine, as part of its review under these provisions, whether the transaction is fair and reasonable to affected public utility employees. This bill would instead require the commission, in its review of a voluntary or involuntary change in ownership of assets from an electrical or gas corporation to a public entity within the Pacific Gas and Electric Company service area, entity, to limit its review to determining whether the transaction is fair and reasonable to affected public utility employees. The bill would require the review to occur after a change in ownership agreement is made for a voluntary change in ownership, or after the completion of the condemnation proceeding for an involuntary change in ownership. (4) Existing law provides procedures for the acquisition under eminent domain proceedings, or otherwise, of lands, property, and rights of a public utility by a political subdivision, and requires the commission to fix the just compensation to be paid by the political subdivision for the lands, property, and rights, as provided. This bill would require the owner of a public utility, within 90 days of a political subdivision submitting an amount for just compensation or a plan for the separation of the public utility’s assets, to also submit an amount for just compensation or provide a response to the separation plan, as provided. The bill would authorize the commission, if it finds that the total just compensation should include costs for the physical separation of the public utility’s assets, to establish a process for the reimbursement of those costs and to determine the reasonableness of those expenses. The bill would require the commission to make and file its findings regarding just compensation with respect to the public utility within 18 months of the date the petition is filed. This bill would prohibit a public utility from recovering from ratepayers any litigation costs associated with a political subdivision’s efforts to acquire utility property, as provided. This (5) This bill would make legislative findings and declarations as to the necessity of a special statute for public entities within the Pacific Gas and Electric Company service area. Under (6) 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 provisions of this bill would be a part of the act and a violation of a commission action implementing the bill’s requirements would be a crime, the bill would impose a state-mandated local program. (4) The 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) Local publicly owned utilities are safe and reliable, and charge lower rates than investor-owned utilities. They are accountable to their customers through local legislative bodies, transparent due to public records laws, and focused on the needs of their local communities. (b) (a) Section 9 of Article XI of the California Constitution authorizes a city to provide its own electrical service or to contract with another utility to provide it. (b) California statutes require public utilities to deliver safe and reliable service to their customers at a reasonable cost. (c) California statutes authorize other public agencies to establish local publicly owned utilities for the provision of to provide electrical service. (d) Investor-owned utilities deny local governments the right to provide electrical service by refusing to negotiate the price of facilities, excessively litigating condemnation and other proceedings, and requiring unnecessary expenditures for public entities and investor-owned utility customers. (d) Eminent domain is the constitutional right of the people or their government to take private property for public use. (e) Until 1993, Section 1240.650 of the Code of Civil Procedure provided a conclusive presumption that the same use by public entities of the property to be taken is a “more necessary use” than the use for which the property was already being used by the private entity. (f) Investor-owned utilities, like Pacific Gas and Electric Company, were granted special statutory protections in 1992 making it unusually difficult and costly for local governments to exercise their constitutional and statutory authority to acquire utility infrastructure or establish municipal energy services. (g) In 1992, the Legislature passed Senate Bill 1757 (Chapter 812 of the Statutes of 1992) to change the requirements for eminent domain of utility property that has been put to a public use. Senate Bill 1757 removed the conclusive presumption of “public necessity” and “more necessary use” and replaced it with a “rebuttable presumption” for electric, gas, or water public utility property. (h) The Legislature passed, and Governor Wilson signed into law, this change with the express purpose of enabling investor-owned utilities to further challenge eminent domain proceedings initiated by local governments. (i) In a 1992 letter, the Governor’s Office of Planning and Research recommended that Governor Wilson make clear this rationale, arguing, “The reality of this bill is that it would strengthen private utilities’ hand in negotiating and probably dissuade some public acquisitions. This office believes that would be a good thing. The private sector can provide utility services more efficiently [than] the public sector.” (j) California made this change at a time when it was also broadly deregulating the energy market through bills like Assembly Bill 1890 (Chapter 854 of the Statutes of 1996). (k) The Legislature enacted these changes with the promise that this legislation would lead to lower electricity rates. (l) Instead of lowering electricity rates, the Legislature’s deregulatory efforts led to the Enron crisis. (m) Competition in the energy industry was one of the goals of Assembly Bill 1890 (Chapter 854 of the Statutes of 1996), which would provide better and cheaper service, and local publicly owned utilities provide one of the few sources of competition with investor-owned utilities in the energy industry. (n) Senate Bill 1757 (Chapter 812 of the Statutes of 1992) helped investor-owned utilities hamstring their main competitor, and, in the years since the passage of Senate Bill 1757 (Chapter 812 of the Statutes of 1992), investor-owned utilities have not proven to more efficiently provide utility services than local publicly owned utilities. (o) Local publicly owned utilities already provide more accountable, reliable, clean, and affordable alternatives to investor-owned utilities throughout California. (p) Unlike investor-owned utilities, which are accountable to private shareholders and highly paid executives, local publicly owned utilities are uniquely accountable to the ratepayers whom they serve. Local publicly owned utilities understand, and are focused on, the needs of their local communities because they are locally based. Decisions about rates, investments, and priorities are made by and for the communities served, through elected or publicly accountable boards comprising people from that community, not far away shareholders. These decisions are transparent as local publicly owned utilities are subject to public records laws. (q) Local publicly owned electric utilities historically, and repeatedly, deliver superior reliability. The primary measures of utility reliability are System Average Interruption Duration Index (SAIDI) and System Average Interruption Frequency Index (SAIFI). According to the American Public Power Association (APPA), local publicly owned electric utilities across the United States show superior reliability compared to investor-owned utilities. According to APPA, on average, local publicly owned electric utilities resolve outages 61 percent faster than other utilities. (r) Local publicly owned electric utilities are not-for-profit entities that work everyday to drive down costs and reinvest in their communities. Investor-owned utilities are for-profit entities that aim to maximize profits for private shareholders. Local publicly owned electric utilities can only charge utility customers the actual cost of providing service, and rates paid by customers are reinvested into their communities for programs that enhance efficiency, reliability, and infrastructure, and balance customer costs with meeting climate goals. According to APPA, local publicly owned electric utilities’ direct contributions into the communities they serve are on average 9 percent higher than the amount investor-owned utilities pay in taxes to state and local governments. (s) Local publicly owned electric utilities are consistently the most affordable energy option for Californians when compared to investor-owned utilities, saving residents and businesses millions of dollars every year. Data on rate comparison information consistently shows local publicly owned electric utilities are, on average, at least 17 percent lower in cost than other alternatives, and often the savings are even higher. (t) According to the APPA 2025 Public Power Statistical Report, residential customers of local publicly owned electric utilities in 34 states including California have the lowest electricity rates of any utility type. According to APPA’s report, local publicly owned electric utility customers in California save an average of between 20 to 30 percent on their electricity bills compared to customers served by other utilities. (u) In local jurisdictions that have adopted aggressive climate goals, local publicly owned electric utilities would improve the ability of municipalities to meet the Senate Bill 100 (Chapter 312 of the Statutes of 2018) clean energy target of 100 percent carbon-free electricity by 2045. For example, whereas Pacific Gas and Electric is a natural gas corporation with a vested interest in the gas distribution system, the City and County of San Francisco’s Climate Action Plan aims for 100 percent renewable energy supply and net-zero emissions citywide by 2040. Acquisition of parts of Pacific Gas and Electric’s energy system would enable municipalities such as San Francisco to exercise greater control over the modernization of their energy systems and to achieve a clean energy future through the electrification of transportation systems, building decarbonization, and the reduction of natural gas use. (v) Acquisition of parts of Pacific Gas and Electric’s energy system by a public entity would address many of the shortcomings of Pacific Gas and Electric’s util [Text truncated for display. Full text available on Congress.gov.]