AB 2065: Rates: prohibited cost recovery.

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, gas corporations, water corporations, and sewer system 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 utility from recording to an above-the-line account, as defined, or otherwise recovering from ratepayers specified costs.

This bill would require the commission to find that an electrical corporation, gas corporation, water corporation, or sewer system corporation has engaged in prohibited cost recovery if the corporation records a cost to a regulator-approved financial account and the cost is categorically excluded from ratepayer recovery by statute, commission decision, or commission rule or has already been authorized for recovery through another ratemaking mechanism. The bill would require the commission, upon making a determination that such a corporation has recorded prohibited costs to a ratepayer-funded account in violation of commission rule, tariff, or statute, to disallow recovery of the cost from ratepayers and to impose a financial penalty for prohibited cost recovery equal to the amount of the prohibited cost recovery or 3 times that amount, except as specified. The bill would require each such corporation to submit an annual report to the commission identifying all instances in the prior year in which prohibited cost recovery was identified, the actions that were taken in response to the identification, and any actions that were taken by the corporation to prevent future occurrences.

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 the provisions of this bill would be a part of the act and because a violation of a commission action implementing the 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.

Sponsors

Sponsors by party (alphabetical): Democratic 5

“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. September 30, 2026Chaptered by Secretary of State - Chapter 919, Statutes of 2026.
2. September 30, 2026Approved by the Governor.
3. September 15, 2026Enrolled and presented to the Governor at 3 p.m.
4. August 31, 2026Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 60. Noes 11. Page 7006.).
5. August 31, 2026In Assembly. Concurrence in Senate amendments pending.
6. August 31, 2026Read third time. Passed. Ordered to the Assembly. (Ayes 29. Noes 8.).
7. August 27, 2026Read second time. Ordered to third reading.
8. August 26, 2026Read third time and amended. Ordered to second reading.
9. August 11, 2026Read second time. Ordered to third reading.
10. August 10, 2026From committee: Be ordered to second reading pursuant to Senate Rule 28.8.
11. July 29, 2026In committee: Hearing postponed by committee.
12. June 30, 2026Read second time and amended. Re-referred to Com. on APPR.