AB 1677: Public utilities: electrical and gas corporations: return on equity.

Official summary

Legislative Counsel’s Digest (official, as of the latest version). Written by nonpartisan legislative staff; reproduced verbatim.

Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations and gas corporations. 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 prohibits a public utility from changing a rate or altering a classification, contract, practice, or rule that would result in a new rate, except upon a showing before the commission and a finding by the commission that the new rate is justified and the public utility notifying its customers of the rate change.

This bill would require the commission to require an electrical corporation or gas corporation proposing to change a rate, or to alter a classification, contract, practice, or rule so as to result in a new rate based directly or indirectly on its request for return on invested capital, to include in its proposal certain studies, as provided. The bill would prohibit the commission from establishing an authorized return on equity for an electrical corporation or gas corporation that exceeds the rate on long-term debt issued by the federal government by more than 400 basis points.

Under existing law, a violation of the Public Utilities Act or an order, decision, rule, direction, demand, or requirement of the commission is a crime.

Because the above provisions would be part of the act and a violation of a commission action implementing the bill’s requirements would be a crime, this 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.

Sponsors

Sponsors by party (alphabetical): Democratic 2 · Republican 1

“Support” is shown only as formal sponsorship recorded by the legislature. Roll-call votes are available on the official bill page.

Recent official actions

1. March 23, 2026In committee: Hearing postponed by committee.
2. March 23, 2026Re-referred to Com. on U. & E.
3. March 19, 2026From committee chair, with author's amendments: Amend, and re-refer to Com. on U. & E. Read second time and amended.
4. March 11, 2026Re-referred to Com. on U. & E.
5. March 10, 2026From committee chair, with author's amendments: Amend, and re-refer to Com. on U. & E. Read second time and amended.
6. March 9, 2026Referred to Com. on U. & E.
7. February 3, 2026From printer. May be heard in committee March 5.
8. February 2, 2026Read first time. To print.