Electrical corporations: performance metrics and incentives.

Senator Stern's proposal to reshape California's electrical utility regulation centers on new performance metrics and financial incentives aimed at aligning utility operations with public policy goals. The legislation directs the California Public Utilities Commission to evaluate mechanisms that could encourage electrical corporations to prioritize cost-effective solutions over capital investments that expand their rate base.

The bill outlines specific areas for the Commission to examine, including methods to maximize existing infrastructure through demand flexibility programs and time-of-use rates before pursuing new construction. When infrastructure expansion proves necessary, the Commission must assess how utilities select between options like grid-enhancing technologies and energy storage facilities. The legislation also addresses safety improvements, calling for evaluation of alternatives such as covered conductors and fast-trip technologies alongside traditional approaches like undergrounding power lines.

Under the measure's timeline, the Commission must begin tracking at least one performance metric by January 2028. The Commission would then evaluate whether linking financial incentives to these metrics could reduce costs for ratepayers. The bill maintains existing provisions that classify violations of Commission requirements as criminal offenses, while specifying that local agencies will not require state reimbursement for any associated costs.