CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Senate Bill
No. 886

Introduced by Senator Padilla

January 13, 2026

An act to add Chapter 14 (commencing with Section 8540) to Division 4.1 of the Public Utilities Code, relating to electricity.


LEGISLATIVE COUNSEL'S DIGEST


SB 886, as introduced, Padilla. California Technology Innovation and Ratepayer Protection Act.
Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations, while local publicly owned electric utilities are under the direction of their governing boards. 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, the California Technology Innovation and Ratepayer Protection Act, would require the commission, on or before July 1, 2027, to establish or modify an electrical corporation tariff for the interconnection of the participating customer facilities and the transmission, distribution, and generation services to participating customers, as specified. The bill would require the commission, as part of establishing or modifying the electrical corporation tariff, to, at a minimum, establish eligibility criteria for large load customers, as defined, and facilities, evaluate the risks and benefits of this tariff to nonparticipating ratepayers, and ensure that the tariff prevents the creation of stranded costs for, or cost shifts, to nonparticipating ratepayers. The bill would require the tariff to require a large load customer that submits an application for interconnection of a facility to an electrical corporation to disclose whether an application for the same facility has been submitted in other electrical corporation service territories or other jurisdictions and to disclose each instance in which an application for the same facility has been submitted. The bill would also require the tariff to, among other things, assign cost responsibility for all transmission facility upgrades triggered by a facility interconnection to the applicable participating customer and to require an early termination fee to be assessed against any participating customer under specified circumstances. The bill would also require each participating customer to install onsite zero-carbon energy storage, as provided, and each electrical corporation to publish and update maps showing locations where large load customers can interconnect without the need for significant, costly, and time-consuming transmission upgrades.
This bill would encourage each local publicly owned electric utility to develop a tariff that is similar to the electrical corporation tariff described above and ensures that costs are not shifted from a customer that is subject to the local publicly owned electric utility’s tariff to a customer that is not subject to that tariff, and that the costs of investments in infrastructure made by a large load customer that is subject to the tariff are not recoverable from other nonparticipating ratepayers.
Under existing law, a violation of any order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because 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.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Chapter 14 (commencing with Section 8540) is added to Division 4.1 of the Public Utilities Code, to read:
CHAPTER  14. California Technology Innovation and Ratepayer Protection Act

8540.
 This chapter shall be known, and may be cited, as the California Technology Innovation and Ratepayer Protection Act.

8541.
 For purposes of this chapter, all of the following definitions apply:
(a) “Electrical corporation” has the same meaning as defined in Section 218.
(b) “Large load customer” means a customer connecting transmission-level electricity service with an estimated peak demand of at least 75 megawatts. “Large load customer” excludes an existing customer that introduces a new load as a result of switching from fossil fuels to renewable fuels or transportation electrification activities.
(c) “Local publicly owned electric utility” has the same meaning as defined in Section 224.3.
(d) “Nonparticipating customer” means a customer who does not receive electrical service pursuant to the electrical corporation tariff established or modified pursuant to subdivision (a) of Section 8542.
(e) “Participating customer” means a customer who receives electrical service pursuant to the electrical corporation tariff established or modified pursuant to subdivision (a) of Section 8542.

8542.
 (a) On or before July 1, 2027, the commission shall establish or modify, in a rulemaking or in an electrical corporation specific application, an electrical corporation tariff for the interconnection of participating customer facilities and the provision of transmission, distribution, and generation services to participating customers.
(b) The commission, as part of establishing or modifying the electrical corporation tariff, shall do, at a minimum, all of the following:
(1) Establish eligibility criteria for large load customers and facilities.
(2) Evaluate the risks and benefits of this tariff to nonparticipating ratepayers.
(3) Ensure that the tariff prevents the creation of stranded costs for, or cost shifts to, nonparticipating ratepayers.
(c) The electrical corporation tariff shall incorporate all of the following criteria:
(1) The electrical corporation tariff shall assign participating customers any unique wholesale energy costs, including ancillary and reliability services costs attributable to rapid fluctuations in demand by the participating customer.
(2) The electrical corporation tariff shall include a reasonable share of the costs relating to wildfire mitigation, wildfire liability, electrification and environmental programs, and other societal cost obligations typically collected from distribution-level ratepayers.
(3) The interconnection provisions of the electrical corporation tariff shall do all of the following:
(A) Require a large load customer that submits an application for interconnection of a facility to an electrical corporation to disclose whether an application for the same facility has been submitted in other electrical corporation service territories or other jurisdictions and to disclose each instance in which an application for the same facility has been submitted.
(B) Assign cost responsibility for all transmission facility upgrades triggered by a facility interconnection to the applicable participating customer. To the extent permitted under federal law, these costs should include shared transmission grid network upgrades needed to accommodate the interconnection of the participating customer’s facility or increase the flow of electricity across the electrical grid.
(C) Allow a participating customer to receive refunds of a portion of its initial nominal dollar contributions to interconnection costs only to the extent that actual annual net revenues cover the costs of energization, the costs of providing electric service, and other costs allocated by the commission to the participating customer.
(D) Require an early termination fee to be assessed against any participating customer that departs the electrical system within 15 years of the initial interconnection of the facility or fails to achieve full load ramp up. The early termination fee should not be less than the revenue gap associated with the originally projected demand and energy consumption of the facility over the minimum 15-year term.
(4) Each participating customer shall be required to install onsite zero-carbon energy storage with at least four hours of capacity at no less than 50 percent of forecasted peak demand. Storage capacity shall be dispatchable by the electrical corporation or Independent System Operator to address emergency conditions on the electrical grid.
(5) Each participating customer shall participate in demand response programs as determined by the commission.
(d) Each electrical corporation shall be required to publish and update maps showing locations where large load customers can interconnect without the need for significant, costly, and time-consuming transmission upgrades.

8543.
 A local publicly owned electric utility is encouraged, before connecting a facility to the electrical grid, to develop a tariff that is similar to the electrical corporation tariff established or modified pursuant to subdivision (a) of Section 8542 and ensures both of the following:
(a) The costs are not shifted from a large load customer that is subject to the tariff to a large load customer that is not subject to the tariff.
(b) The costs of investments in infrastructure made by a large load customer that is subject to the tariff are not recoverable from other nonparticipating ratepayers.

SEC. 2.

 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.