Relating to the regulation of public utilities, including rate filings, rate adjustment mechanisms, virtual power plants, and integrated resource planning

Utilities that have not filed a general rate case since July 1, 2023, are required to file a general rate case by December 31, 2027. Under current law, a public utility is permitted to make provisions for the automatic adjustment of rates and charges provided certain criteria are met. The bill prohibits the use of automatic adjustment provisions for electric utilities subject to rate regulation. For electric utilities subject to rate regulation, beginning with the first general rate case filed under the bill, the bill requires costs or expenses recovered through automatic adjustment mechanisms, trackers, or riders to be included and adjusted only through a general rate case. The bill recognizes that customer-owned generation and storage is vital to cost-effectively meeting rising demand for electricity. The bill describes virtual power plants as collections of customer-owned distributed generation and energy storage resources managed by a common control mechanism within a utility’s service territory. The bill provides that virtual power plants are not public utilities and requires the commission to adopt rules establishing standards and processes for approval and oversight. The bill prohibits the commission from approving or allowing continued operation of a virtual power plant if the virtual power plant does not benefit customers in the service territory. The bill requires each rate-regulated public utility to file an integrated resource plan every three years, with the first plan due July 1, 2027. The bill directs the commission to adopt rules governing the development and evaluation of integrated resource plans. The plans must include 5-year and 20-year planning horizons and a quantitative comparative analysis of multiple resource mixes to serve anticipated customer needs using industry best practices. The rules adopted by the commission must also address a determination of eligibility for access to modeling software and data, including the ability for eligible parties to have alternative scenarios and a process to best balance and represent the input of the respective parties. The bill provides the rules adopted must also include requirements for annual reporting on plan performance, as well as mechanisms for plan updates or modifications in response to material changes and any other rule for the development and evaluation of integrated resource plans the commission deems necessary or appropriate. The bill directs the commission to maximize public access to information while protecting only necessary confidential information through uniform disclosure agreements. The bill requires any deviation from an integrated resource plan to be demonstrated to be in the best interest of the customers when rate recovery approval is sought. The bill allows the commission or consumer advocate to employ additional staff or contract for professional services with persons who are not state employees for the development of rules for the filing and review of resource plans or to aid the commission in the review and approval, disapproval, or modification of a plan. The costs of the additional staff services shall be assessed to the utilities.