An act to add Section 2827.2 to amend Section 748.5 of the Public Utilities Code, relating to electricity.
AB 942 makes two main changes to California utility law. First, it narrows eligibility for the California Climate Credit by excluding residential customers who are not enrolled in CARE or FERA and whose prior-year electricity bills were under $300. Second, it changes how certain new solar customers are treated when a property with an existing renewable generation facility is sold: beginning January 1, 2026, a new customer-generator at a large electrical corporation would have to take service under the current post-December 1, 2022 tariff, would be ineligible for the avoided cost calculator plus glide path under the CPUC’s net billing tariff, and would have to pay nonbypassable charges that apply to non-customer-generators.
The bill also authorizes the Public Utilities Commission to create a new tariff for these property purchasers if doing so would reduce cost impacts on customers who are not eligible customer-generators. It expressly exempts public schools and agricultural customers from the new solar-transfer rules. In addition, the bill states that eligible customer-generators would no longer receive the climate credit beginning January 1, 2026, and it includes findings that frame the measure as a response to rising utility bill cost shifts associated with rooftop solar subsidies.
In terms of state law, AB 942 amends Public Utilities Code Section 748.5 and adds new Section 2827.2. That means it directly affects the California Climate Credit program, CARE and FERA-linked eligibility for certain residential credits, and the CPUC’s net energy metering/net billing framework for large investor-owned utilities. It would also require CPUC implementation and could affect billing for residential solar customers, homebuyers acquiring properties with existing solar systems, and utility ratepayers who do not have rooftop solar.
The general sentiment reflected in the bill text and vote history is supportive but not unanimous. The bill advanced through committees and passed the Assembly with a clear majority, suggesting substantial backing for its goal of reducing ratepayer cost shifts and targeting benefits more narrowly. The legislative findings emphasize equity concerns, especially the claim that higher-income households have disproportionately benefited from rooftop solar subsidies while low-income customers have benefited less.
The main points of contention are the bill’s treatment of rooftop solar economics and who should bear grid costs. Supporters appear to view the measure as a way to reduce cross-subsidies and lower bills for non-solar customers, while opponents likely object to reducing credits and changing tariff treatment for solar customers, especially for purchasers of homes with existing solar installations. The exemptions for public schools and agricultural customers suggest an effort to limit the bill’s impact on politically sensitive or public-benefit sectors.
AB 942 would amend Public Utilities Code Section 748.5 to exclude certain low-bill residential customers who are not in CARE or FERA from receiving the California Climate Credit, and it would add Section 2827.2 to impose new tariff and charge requirements on certain new eligible customer-generators who acquire property with an existing renewable generation facility. The bill would also remove those eligible customer-generators from the avoided cost calculator plus glide path and require them to pay nonbypassable charges, while authorizing the CPUC to create a lower-cost replacement tariff. Its implementation would primarily affect investor-owned utilities, rooftop solar customers, homebuyers, and utility ratepayers, and it would require CPUC action to carry out the new rules.
The bill appears to have generally favorable momentum in the Legislature, with multiple committee approvals and a strong Assembly floor vote, but not without opposition. The vote margins show meaningful support for the bill’s cost-shift rationale, while the no votes indicate concern about reducing solar-related benefits and changing existing expectations for customers with rooftop solar. Overall, the discussion reflected a policy preference for narrowing subsidies and credits in the name of ratepayer equity and utility bill relief.
The central contention is whether rooftop solar subsidies and climate credits are being distributed fairly or instead creating an undue cost shift onto non-solar customers. Supporters argue that higher-income solar households have disproportionately benefited and that the bill is needed to reduce inequities and utility bills. Opponents are likely to focus on the impact on solar adoption, the value of existing investments in rooftop solar, and the fairness of changing tariff treatment when a property with solar is sold. The exemptions for public schools and agricultural customers indicate some recognition that the new rules could be too burdensome in certain contexts.