SB 960 directs the State Corporation Commission (SCC) to examine, in at least one biennial review or other appropriate proceeding for a Phase I or Phase II electric utility, whether the utility is using reasonable customer classifications in its rates, tolls, charges, or schedules. The review must occur in a proceeding filed after January 1, 2025, but no later than July 1, 2027, and the SCC is instructed to make this determination under its existing authority. The bill also requires the SCC to consider whether creating new customer classes or separate customer classifications would be reasonable.
Although the bill text is framed broadly around customer classifications, the bill caption and legislative context indicate it is aimed at electric utility cost allocation, particularly issues involving data centers and how their electricity costs are assigned. In practical terms, the measure is intended to prompt regulatory scrutiny of whether current utility rate structures fairly distinguish among customer groups and whether additional classifications are needed to reflect different usage patterns or cost impacts.
Impact
The bill does not directly rewrite the utility rate statutes, but it directs the SCC to use its existing ratemaking authority to evaluate customer classifications in specified utility proceedings. This could affect how electric utilities structure rates and how costs are allocated among customer classes, potentially influencing future rate cases, special tariffs, and treatment of large-load customers such as data centers. The affected parties are Phase I and Phase II utilities, their customer classes, and large commercial or industrial users that may be placed into separate classifications or subject to different charges.
Sentiment
The bill appears to have broad support for moving through the legislative process, passing the Senate and House with substantial majorities, but not without opposition. The recorded votes show meaningful dissent at the committee and floor levels, suggesting that while many legislators supported giving the SCC a clearer directive to review customer classifications, a significant minority had concerns about the policy direction or its effects on utility customers. The final Senate action rejecting the House substitute indicates that the exact substitute language was contested even though the underlying issue remained active.
Contention
The main point of contention appears to be how electric utility costs should be allocated, especially in relation to data centers and other large-load customers. Supporters likely viewed the bill as a way to ensure fairer and more accurate rate classifications, while opponents may have worried about rate impacts, regulatory overreach, or the creation of new customer classes that could shift costs among customer groups. The split votes in committee and on the House floor suggest disagreement over whether the SCC should be specifically directed to revisit classifications and whether the substitute language appropriately balances utility flexibility with consumer fairness.