§ 8388.5. — 8388.5. (Amended by Stats. 2025, Ch. 119, Sec. 61.)

(a)
The commission shall establish an expedited utility distribution infrastructure undergrounding program consistent with this section.
(b)
Only a large electrical corporation may participate in the program.
(c)
In order to participate in the program, a large electrical corporation shall submit to the office a distribution infrastructure undergrounding plan that shall address or include, at minimum, all of the following components:
(1)
A 10-year plan for undergrounding distribution infrastructure.
(2)
Identification of the undergrounding projects that will be constructed
as part of the program, including a means of prioritizing undergrounding projects based on wildfire risk reduction, public safety, cost efficiency, and reliability benefits. Only undergrounding projects located in tier 2 or 3 high fire-threat districts or rebuild areas may be considered and constructed as part of the program.
(3)
Timelines for the completion of identified and prioritized undergrounding projects, and unit cost targets and mileage completion targets for each year covered by the plan.
(4)
A comparison of undergrounding versus aboveground hardening of electrical infrastructure and wildfire mitigation for achieving comparable risk reduction, or any other alternative mitigation strategy, such as covered conductor and rapid earth fault current limiter devices, for those prioritized undergrounding projects, evaluating the scope, cost, extent, and risk reduction of each
activity, separately and collectively, over the duration of the plan. The comparison shall emphasize risk reduction and include an analysis of the cost of each activity for reducing wildfire risk, separately and collectively, over the duration of the plan.
(5)
A plan for utility and contractor workforce development.
(6)
An evaluation of project costs, projected economic benefits over the life of the assets, and any cost containment assumptions, including the economies of scale necessary to reduce wildfire risk and mitigation costs and establish a sustainable supply chain.
(d)
Upon a large electrical corporation submitting a plan to the office, the office shall do both of the following:
(1)
Publish the plan for public comment.
(2)
Within nine months, review and approve or deny the plan. The office may only approve the plan if the large electrical corporation has shown that the plan will substantially increase electrical reliability by reducing the use of public safety power shut off, enhanced powerline safety settings, deenergization events, and any other outage programs, and substantially reduce the risk of wildfire. Before approving the plan, the office may require the large electrical corporation to modify the plan or to modify and resubmit the plan.
(e)
(1)
Upon the office approving a plan pursuant to paragraph (2) of subdivision (d), the large electrical corporation shall, within 60 days, submit to the commission a copy of the plan and an application requesting review and conditional approval of the plan’s costs and including all of the following:
(A)
Any substantial improvements in safety risk and reduction in costs compared to other hardening and risk mitigation measures over the duration of the plan.
(B)
The cost targets, at a minimum, that result in feasible and attainable cost reductions as compared to the large electrical corporation’s historical undergrounding costs.
(C)
How the cost targets are expected to decline over time due to cost efficiencies and economies of scale.
(D)
A strategy for achieving cost reductions over time.
(2)
The assigned commissioner may waive the requirements of subdivisions (b), (d), (f), and (i) of Section 1701.3 for an application submitted to the commission pursuant to paragraph (1).
(3)
In reviewing an application submitted to the commission pursuant to paragraph (1), the commission shall consider not revisiting cost or mileage completion targets approved, or pending approval, in the electrical corporation’s general rate case or a commission-approved balancing account ratemaking mechanism for system hardening.
(4)
Upon the commission receiving an application pursuant to paragraph (1), the commission shall facilitate a public workshop for presentation of the plan and take public comment for at least 30 days.
(5)
On or before nine months, the commission shall review and approve or deny the application. Before approving the application, the commission may require the large electrical corporation to modify or modify and resubmit the application.
(6)
The commission shall consider
continuing an existing commission-approved balancing account ratemaking mechanism for system hardening for the duration of a plan, as determined by the commission, and shall authorize recovery of recorded costs that are determined to be just and reasonable.
(f)
If the plan is approved by the office and commission, the large electrical corporation shall do all of the following:
(1)
Every six months, file a progress report with the office and the commission. The large electrical corporation and the office shall publish these progress reports on their internet websites.
(2)
Include ongoing work plans and progress in wildfire mitigation plan filings.
(3)
Hire an independent monitor, selected by the office, to review and assess the large electrical corporation’s adherence to its plan and submit a report with the office each December 1 over the course of the plan.
(g)
(1)
In reviewing and assessing the large electrical corporation’s adherence to its plan pursuant to paragraph (3) of subdivision (f), the independent monitor shall assess whether the large electrical corporation’s progress on undergrounding work has been consistent with the objectives identified in its plan. The independent monitor’s report shall specify any failure, delays, or shortcomings of the large electrical corporation and provide recommendations for improvements to accomplish the objectives set forth in the plan.
(2)
The large electrical corporation shall have 180 days to correct and eliminate any deficiency specified in the independent monitor’s report.
(3)
On or before December 1 of each year the plan is in effect, the independent monitor shall submit the
report to the office.
(h)
The office shall publish reports received pursuant to paragraph (3) of subdivision (g) on its internet website.
(i)
(1)
The office shall consider the independent monitor’s report and whether the large electrical corporation has cured any deficiencies, and may provide an assessment to the commission for consideration.
(2)
The commission may assess penalties on a large electrical corporation that fails to comply with a commission decision approving its plan.
(j)
Each large electrical corporation participating in the program shall apply for available federal, state, and other nonratepayer moneys throughout the duration of its approved undergrounding plan, and any moneys received as a result of those applications shall be used to reduce the program’s costs on the large electrical corporation’s ratepayers.
(k)
An approval of a plan pursuant to this section is not a project as defined in Division 13 (commencing with Section 21000) of the Public Resources Code, provided that environmental review otherwise required by Division 13 (commencing with Section 21000) of the Public Resources Code occurs before any project approval that would
authorize physical changes being made to the environment.

Legislative History

Amended by Stats. 2025, Ch. 119, Sec. 61. (SB 254) Effective September 19, 2025.