SB886 - California Technology Innovation and Ratepayer Protection Act.

Enrolled September 04, 2026 Passed IN Senate August 31, 2026 Passed IN Assembly August 31, 2026 Amended IN Assembly August 28, 2026 Amended IN Assembly July 02, 2026 Amended IN Assembly June 29, 2026 Amended IN Senate May 14, 2026 Amended IN Senate March 25, 2026 Amended IN Senate March 05, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Senate Bill No. 886 Introduced by Senators Padilla and McNerney (Coauthors: Senators Arreguín, Becker, Weber Pierson, and Wiener) (Coauthors: Assembly Members Petrie-Norris, Calderon, Connolly, Harabedian, and Rogers) January 13, 2026 An act to add Article 14.7 (commencing with Section 945) to Chapter 4 of Part 1 of Division 1 of the Public Utilities Code, relating to electricity. LEGISLATIVE COUNSEL'S DIGEST SB 886, Padilla. California Technology Innovation and Ratepayer Protection Act. 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. This bill, the California Technology Innovation and Ratepayer Protection Act, would require the commission, on or before January 1, 2028, to establish new tariffs or update existing electric rules for the interconnection of participating customer facilities and the provision of retail electric service, transmission, distribution, and generation services to participating customers, as specified. The bill would require the commission, as part of establishing and updating electric rules, to, at a minimum, evaluate the risks and benefits of the tariffs to nonparticipating customers, ensure that the tariffs prevent the creation of stranded costs for, or cost shifts to, nonparticipating customers, and, for unbundled customers, ensure that charges generally included in the generation component of the unbundled customer’s consolidated bill are assessed as a separate line item on their bill. The bill would require, as part of a new or existing proceeding, the commission to establish a tariff for the interconnection of a participating customer seeking to receive retail electric service at the transmission level that meets certain requirements, as specified. The bill would authorize a participating customer to participate in a new demand response program authorized by the commission, as specified. The bill would authorize an electrical corporation to submit an exceptional case filing to approve a contract between the electrical corporation and a data center seeking interconnection at the transmission level for those facilities that seek to obtain retail electric service after January 1, 2027, but before the commission has approved the tariff, as specified. 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 above provisions would be a part of the act, and 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. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill Text The people of the State of California do enact as follows: SECTION 1. Article 14.7 (commencing with Section 945) is added to Chapter 4 of Part 1 of Division 1 of the Public Utilities Code, to read: Article 14.7. California Technology Innovation and Ratepayer Protection Act 945. This article shall be known, and may be cited, as the California Technology Innovation and Ratepayer Protection Act. 945.2. (a) On or before January 1, 2028, the commission shall establish new tariffs or update existing electric rules for the interconnection of participating customer facilities and the provision of retail electric service, transmission, distribution, and generation services to participating customers. (b) The commission, as part of establishing and updating electric rules pursuant to this article, shall do, at a minimum, all of the following: (1) Evaluate the risks and benefits of the tariffs to nonparticipating customers. (2) Ensure that the tariffs prevent the creation of stranded costs for, or cost shifts to, nonparticipating customers. (3) For an unbundled customer, ensure that charges generally included in the generation component of the unbundled customer’s consolidated bill are assessed as a separate line item on the unbundled customer’s bill. 945.3. (a) As part of a new or existing proceeding, the commission shall establish a tariff for the interconnection of a participating customer seeking to receive retail electric service at the transmission level. A tariff established pursuant to this section shall do all the following: (1) Ensure the interconnection tariff is consistent with Section 945.2. (2) Require a participating customer that submits an application for interconnection of a data center to an electrical corporation to disclose whether an application for the same data center has been submitted in other electrical corporation service territories or other jurisdictions and to disclose each instance in which an application for the same data center has been submitted. (3) Assign cost responsibility for all transmission facility upgrades and usage to the applicable participating customer based on a methodology to be determined by the commission. To the extent permitted under federal law, these costs should include shared transmission grid network upgrades needed to accommodate the interconnection of the participating customer’s facility or increase the flow of electricity across the electrical grid. (4) Allow a participating customer to receive refunds of a portion of its initial nominal dollar contributions to interconnection costs only to the extent that actual annual net revenues received by the electrical corporation cover the costs of energization, the costs of providing electrical service, and other costs allocated by the commission to the participating customer. The refund shall be based on the materialization of the participating customer’s load and shall not exceed 75 percent of the annual net transmission revenue received by the electrical corporation from the participating customer. This limitation may delay the timing of the full recovery of refunds by the participating customer. (5) For a participating customer, require an early termination fee to be assessed against a participating customer that departs the electrical system within 10 years of the initial interconnection of the facility or fails to achieve adequate load ramp up, as determined by the commission. The early termination fee should not be less than the revenue gap associated with the originally projected demand and energy consumption of the facility over the minimum 10-year term. (b) A participating customer shall certify to the commission that its facility meets the requirements of subdivisions (a) and (b) of Section 25545.3.3 of, and subdivisions (a) to (e), inclusive, of Section 25545.3.5 of, the Public Resources Code, notwithstanding the definition of “covered project” in Section 25545.3 of the Public Resources Code. (c) The commission shall require each electrical corporation to publish and update maps showing locations where participating customers can interconnect without the need for significant, costly, and time-consuming transmission upgrades. (d) This section shall only apply to a data center that enters into a new interconnection agreement to receive retail electric service at the transmission level on or after January 1, 2027. 945.7. A participating customer may participate in a new demand response program authorized by the commission that does not result in any net costs to a nonparticipating customer and supports load shifting, reliability, resource adequacy, and greenhouse gas emission reduction objectives, as determined by the commission. 945.9. An electrical corporation may submit an exceptional case filing to approve a contract between the electrical corporation and a data center seeking interconnection at the transmission level for those facilities that seek to obtain retail electric service after January 1, 2027, but before the commission has approved a tariff filed pursuant to Section 945.3. A contract established pursuant to this section shall be consistent with the requirements of this article. SEC. 2. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.