Public Utilities Code section 940
(a)
The commission shall require each electrical corporation to retain an independent third-party auditor, which shall be selected by the commission based on nonbinding recommendations from the electrical corporation, to review the electrical corporation’s business practices and procedures for energizing new customers and how the electrical corporation is planning for demand growth, including new customer energizations.(b)
The third-party auditor shall review all of the following:(1)
The electrical corporation’s customer energization requests for the previous three years.(2)
The electrical corporation’s projections of customer demand growth included in the electrical corporation’s distribution plan, including growth in new customers and growth in demand from existing customers.(3)
The electrical corporation’s qualified staffing levels and future anticipated staffing needs to meet projections for customer demand growth, including the ability of the electrical corporation to sufficiently build its workforce.(4)
Funding requested by the electrical corporation to support energization requests for the previous three years in the general rate case or any other proceeding, and the efficacy of those previous requests in meeting customer demand.(5)
Commission authorized funding for the electrical corporation to support energization for the previous three years, future authorized funding, and authorized changes to the electrical corporation’s business practices or structures to improve its ability to respond to changing customer demand.(6)
The electrical corporation’s performance in meeting the reasonable average and maximum target energization time periods pursuant Section 934.(7)
Any other metrics deemed relevant by the commission or third-party auditor to support a thorough evaluation of the electrical corporation’s energization performance, including to identify and correct past flaws and to identify future best practices.(c)
The third-party auditor shall evaluate the electrical corporation’s current and future energization performance and make recommendations as to whether the electrical corporation is adequately meeting and anticipating customer demand, adequately training and retaining an adequate workforce, and is funded at sufficient levels to meet forecasted demand growth.(d)
The third-party auditor shall report to the commission on a biannual basis. The reports of the auditor shall be posted on the commission’s internet website and reported to the appropriate policy committees of the Legislature.(e)
The commission may require an electrical corporation to take remedial actions necessary to address deficiencies identified in the report provided by the third-party auditor pursuant to subdivision (d), or to achieve the targets established pursuant to paragraph (1) of subdivision (a) of Section 934.(f)
For purposes of this section, “energization” means connecting customers to the electrical distribution grid and establishing adequate electrical distribution capacity or upgrading electrical distribution or transmission capacity to provide electrical service for a new customer, or to provide upgraded electrical service to an existing customer. The determination of adequate electrical distribution capacity includes consideration of future load. “Energization” does not include activities related to connecting electrical supply resources.(g)
This section shall remain in effect only until January 1, 2032, and as of that date is repealed.
Source:
Section 940, https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PUC§ionNum=940. (updated Sep. 19, 2025; accessed Oct. 13, 2025).
