Assembly BillPassed first housePublic Utilities
AB 1117: Electricity: rates: optional dynamic rate tariffs.
What AB 1117 does, verified December 7, 2025
This bill requires the Public Utilities Commission to develop optional dynamic rate tariffs for large electrical corporations. The tariffs must include a time-varying distribution rate, a time-varying generation rate, and nonbypassable charges. The commission must ensure that revenue requirements are correctly collected from customers, and any overcollection or undercollection is returned to the customers. The bill also requires customers with smart meters to have access to their interval usage data, and the commission must consider rules to protect vulnerable residential customers. The commission must also incorporate the effects of dynamic rate adoption into proceedings on revenue requirement cost recovery.
Bill journey
✓IntroducedComplete
✓In CommitteeComplete
✓First Chamber FloorComplete
4Second ChamberCurrent
5GovernorPending
6ChapteredPending
Last action: In committee: Held under submission. (2025-06-02)Alert me
Author and sponsors
Full contact details, staff, and committees with Connect, $16/moUnlockRecent actions21 total · showing 5
| Aug. 29, 2025 | In committee: Held under submission. |
| Aug. 18, 2025 | In committee: Referred to suspense file. |
| Jul. 17, 2025 | Read second time and amended. Re-referred to Com. on APPR. |
| Jul. 17, 2025 | From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 10. Noes 3.) (July 15). |
| Jul. 02, 2025 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on E., U & C. |
Latest bill textAmended version, July 17, 2025 · 1,097 words
| Amended IN Senate July 17, 2025 |
| Amended IN Senate July 02, 2025 |
| Amended IN Assembly April 07, 2025 |
| Amended IN Assembly March 11, 2025 |
CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION
Assembly Bill
No. 1117
| Introduced by Assembly Member Schultz (Coauthors: Assembly Members Irwin and Rogers) (Coauthor: Senator Stern) |
February 20, 2025 |
An act to add Section 729.3 to the Public Utilities Code, relating to electricity.
LEGISLATIVE COUNSEL'S DIGEST
AB 1117, as amended, Schultz. Electricity: rates: optional dynamic rate tariffs.
Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical 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 requires each electrical corporation to identify a separate rate component to fund certain programs that enhance system reliability and provide in-state benefits, and requires that the rate component be a nonbypassable element of the local distribution service.
This bill would require the commission, through a new or existing proceeding, to develop optional dynamic rate tariffs applicable to each large electrical corporation for the large electrical corporation’s customers. The bill would require at least one optional dynamic rate tariff for each segment of medium and large commercial and industrial customers no later than on or before July 1, 2028, and at least one optional dynamic rate tariff for each segment of residential and small commercial customers no later than on or before July 1, 2030. The bill would require each optional dynamic rate tariff to include, at minimum, specified components, including a time-varying transmission and distribution rates rate that reflect reflects dynamic grid constraints constraints, a time-varying generation rate that reflects wholesale market conditions, and nonbypassable charges, as specified. The bill would require the commission to ensure, among other things, any overcollection of transmission-, distribution-, and generation-related revenue requirements from participating bundled customers is returned to the participating bundled customers and any undercollection of those revenue requirements is borne by those same customers. The bill would additionally require that any overcollection of transmission- or distribution-related revenue requirements from unbundled customers be returned to the same unbundled customers, and any undercollection of those revenue requirements be borne by those same customers. The bill would require that any customer of an electrical corporation with an installed smart meter who chooses to take service under an optional dynamic rate tariff be provided access to their own interval usage data directly from the smart meter as that data is generated, as provided. The bill would also require the commission to determine whether each large electrical corporation would be required to allow medium and large commercial and industrial customers taking service under an optional dynamic rate tariff to also participate in supply-side resource demand response programs, as provided. The bill would require that any new medium and large commercial and industrial customer energized on or after July 1, 2028, that opts to take service under an optional dynamic rate tariff be eligible to receive generation service from an electric service provider, if specified conditions are met. The bill would require the commission to consider rules or conditions on participation by vulnerable residential customers to ensure adequate protection for those customers, as provided. The bill would require the commission to incorporate the load shift and load reduction effects of dynamic rate adoption in proceedings on revenue requirement cost recovery, as provided. The bill would require the commission to ensure load-serving entities provide adequate electricity bill comparison information to residential and small business customers interested in taking service under an optional dynamic rate tariff.
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.
The people of the State of California do enact as follows:
SECTION 1.
(a) The Legislature hereby finds and declares all of the following:(1) The transformation of California’s electrical grid system to support the state’s decarbonization goals will be most affordable for the state’s businesses and residents through improved use of grid infrastructure and demand flexibility.
(2) Lowering electricity bills is critical to maintaining the competitiveness of California businesses and alleviating overall cost pressures on individual households.
(3) The electrical grid supporting California’s economy is subject to dynamically shifting conditions due to factors such as weather-driven electricity demand, variable generation output, and line capacity constraints.
(4) Dynamic grid conditions often result in widely fluctuating wholesale electricity prices. The volatility of wholesale prices affects the overall cost of electricity that is ultimately borne by the state’s ratepayers.
(5) Enabling greater demand flexibility through dynamic retail pricing, based on the conditions of the grid and the wholesale market, will can minimize the short-term and long-term costs of electricity by reducing electricity demand during high-price periods and shifting demand to time periods when renewable energy is low cost and abundant.
(b) It is the intent of the Legislature to do all of the following:
(1) Ensure approximately $4.5 billion of smart meter infrastructure investments already paid for by the customers of the Pacific Gas and Electric Company, the Southern California Edison Company, and the San Diego Gas and Electric Company provide cost saving through the provision of optional dynamic rates.
(1)
(2)
Establish at least one optional dynamic rate tariff for each customer segment of medium and large commercial and industrial customers by 2028 and at least one optional dynamic rate tariff for each customer segment of residential and small commercial customers by 2030.(2)
(3)
Ensure that customers who do not want to or cannot participate in dynamic retail pricing have the right to continue to be subject to flat rates or time-of-use rates.(3)
(4)
Ensure participation in dynamic retail pricing does not create cost shifts between bundled and unbundled ratepayers.(5) Ensure customers have real-time access to their electricity usage data directly from their smart meters to maximize the ability of participating customers to adjust their electricity usage in response to dynamic prices if they choose to take service under a dynamic rate tariff.
(4)
(6)
Allow voluntary demand flexibility through dynamic retail pricing to be complemented with mandatory supply-side demand response programs that contribute to resource adequacy.Text of AB 1117 as amended, from the official record. Connect Plus keeps every version and highlights what changed.Compare versions