Relating to customer classes for large energy use facilities, and including applicability provisions

This bill relates to customer classes for large energy use facilities. The bill defines “costs of serving” to include, as applicable, the costs incurred by an electric utility or water utility in providing electric transmission, distribution, energy, water service, capacity, or ancillary electricity or water services, and any related costs or associated risks with serving a customer class or customer. The bill defines “large energy use facility” as a facility that uses or is able to use 20 megawatts or more and that is primarily engaged in providing a service described under code number 518210 of the North American industry classification system. RATE-REGULATED UTILITIES. The bill requires the utilities commission (commission) to create a customer class for each customer that is a large energy use facility. The customer class must be separate and distinct from customer classes for other customers and must have its own rates, charges, and schedules. The bill provides that any rate, charge, or schedule approved by the commission for a large energy use facility customer must directly assign the costs of serving the customer, mitigate the risk of other customer classes paying unwarranted costs, and mitigate the risk of shifting, in an unwarranted manner, the costs of serving a large energy use facility to other customer classes. The bill specifies that these costs include costs incurred by an electric utility or water utility to meet load requirements resulting from providing electricity service or water service to a large energy use facility. The bill requires the commission, when deciding whether to approve a proposed rate, charge, or schedule for a large energy use facility customer class, to consider whether the proposal may result in or have the potential to result in increased costs or unwarranted risk to other customers, whether the proposal provides for equitable contributions to grid efficiency, distribution efficiency, reliability, and resiliency benefits, and whether the proposal meets any other conditions the commission may require in the public interest. The bill provides that an electric utility or water utility and a customer that is a large energy use facility are not required to use the customer classification created under the bill if the commission has not approved a rate, charge, or schedule for that classification of service. OTHER WATER UTILITIES. The bill applies to certain water utilities not otherwise regulated by the commission. The bill requires water utilities to create a customer class for each customer that is a large energy use facility. The customer class must be separate and distinct from customer classes for other customers and must have its own rates, charges, and schedules. The bill provides that any rate, charge, or schedule for a large energy use facility must directly assign the costs of serving the customer, mitigate the risk of other customer classes paying unwarranted costs, and mitigate the risk of shifting, in an unwarranted manner, the costs of serving a large energy use facility to other customer classes. The bill specifies that these costs include costs incurred by a water utility to meet load requirements resulting from providing water service to a large energy use facility. The bill requires the water utility, when calculating a rate, charge, or schedule for a large energy use facility customer class, to consider whether the rate, charge, or schedule may result in or have the potential to result in increased costs or unwarranted risk to other customers, provides for equitable contributions to distribution efficiency, reliability, and resiliency benefits, and meets any other conditions the commission may require in the public interest. The bill provides that upon request by the commission, a water utility that provides service to a large energy use facility must submit documentation to the commission within 30 days of the request that demonstrates compliance with the bill. If the water utility does not submit the documentation as required, the water utility is subject to a civil penalty, as determined by the commission. APPLICABILITY. The bill applies to electric utility services and water utility services provided to large energy use facilities constructed or expanded on or after January 1, 2027.