(a) (1) When conducting a solicitation pursuant to Section 80820, the department shall confer with the commission and other parties, including local publicly owned electric utilities that are voluntarily participating pursuant to Section 80822 and load-serving entities, for eligible energy resource procurement activities of an identified scope and duration. The department shall recover costs related to conducting the requested solicitations and all supporting work. Cost recovery may be effectuated, if determined to be just and reasonable by the commission before the procurement, through a nonbypassable charge approval process for load-serving entities and pursuant to Section 80822 for local publicly owned electric utilities.

(2) At the request of the department, the commission may require an electrical corporation to act as the agent of the department or to assist the department in conducting the solicitation, bid evaluation, or contract negotiation for new eligible energy resource procurement. The electrical corporation shall be reimbursed by the department for its reasonable costs, as determined by the commission.

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(b) If the department’s costs associated with the procurement of eligible energy resources pursuant to this division, including the costs related to bonds issued pursuant to Chapter 5 (commencing with Section 80840), costs related to contracting for eligible energy resources, and other costs to implement and administer this division, will be recovered through a commission proceeding, the commission shall review the procurement undertaken pursuant to this division and, if approved, issue an order governing the recovery of the department’s costs before the consummation of the contract only if both of the following conditions are satisfied:

(1) The recovery of the department’s costs, including those costs associated with the procurement process, the resulting transactions, and the associated costs, has been found to be just and reasonable and to be in the public interest.

(2) The recovery of the department’s costs, including, if authorized, costs associated with the issuance of bonds and the material terms of those bonds, including, without limitation, interest rates, rating, amortization, and maturity, through charges on customers does not unreasonably increase costs to customers on a net present value basis.

(c) If the commission determines that a nonbypassable charge necessary to fund activities conducted by the department pursuant to this division is just and reasonable, the department shall ensure it has entered into an agreement with the commission for that nonbypassable charge before it begins to incur costs related to a specific activity under this division. If the purpose of the nonbypassable charge is to recover the department’s revenue requirement related to bond issuance debt service, the department shall ensure the agreement has the force and effect of an irrevocable financing order adopted in accordance with Article 5.5 (commencing with Section 840) of Chapter 4 of Part 1 of Division 1 of the Public Utilities Code or that the commission has separately issued an irrevocable financing order related to the nonbypassable charge.

(d) Any agreement between the department and the commission under this section shall provide for the administration of the nonbypassable charge, including both of the following requirements:

(1) The department shall notify the commission each year of the annual collections received by the department and the amount of any excess or deficiency in collections above or below the revenue requirement. The commission shall adjust charges in the subsequent year to reflect that excess or deficiency.

(2) During any period, if the department forecasts that the revenue requirement for that period will not be met and that collections will not be sufficient to fund the revenue requirement established pursuant to Section 80842, the department shall notify the commission in writing and the commission shall act within 60 days of receiving that notice to increase the nonbypassable charge so that the amounts collected during that period are sufficient to meet those obligations.

(e) Any agreement between the department and the commission pursuant to this section that is solely for the purpose of imposing a nonbypassable charge to recover the department’s revenue requirement related to bond issuance debt service shall include a provision stating that the commission’s just and reasonable determination with respect to the revenue requirement is in effect for the duration of the bond term.

(Added by Stats. 2023, Ch. 367, Sec. 15. (AB 1373) Effective October 7, 2023.)