(a) The commission shall require an electrical corporation that requests the use of a ratemaking mechanism, pursuant to Section 937, as a condition of authorizing the use of the mechanism, to satisfy all of the following requirements:

(1) The electrical corporation shall agree 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.

(2) The electrical corporation shall not recover the costs of the third-party auditor from ratepayers.

(3) The third-party auditor shall review all of the following:

(A) The electrical corporation’s customer energization requests for the previous three years.

(B) 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.

(C) 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.

(D) 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.

(E) 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.

(F) The electrical corporation’s performance in meeting energization time periods established by the commission pursuant to this article.

(G) The electrical corporation’s performance in meeting its internally established energization time periods over the prior 10 years or longer, as necessary.

(H) 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.

(4) 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.

(5) 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.

(b) The electrical corporation shall retain an independent third-party auditor as provided in paragraph (1) of subdivision (a) before the commission authorizes use of the ratemaking mechanism pursuant to Section 937. The work of the auditor described in paragraphs (3), (4), and (5) of subdivision (a) may occur after the electrical corporation requests authorization for the ratemaking mechanism but shall occur before July 1, 2028. The commission’s 180-day deadline for authorizing the mechanism provided in paragraph (b) of Section 937 shall not be affected by whether the auditor has completed the work described in paragraphs (3), (4), and (5) of subdivision (a).

(c) This section shall become inoperative on July 1, 2028, and, as of January 1, 2029, is repealed.

(Added by Stats. 2023, Ch. 394, Sec. 1. (SB 410) Effective January 1, 2024. Inoperative July 1, 2028, by its own provisions. Repealed as of January 1, 2029, by its own provisions.)