(a) Whenever the commission authorizes any change in rates reflecting and passing through to customers specific changes in costs, except rates set for common carriers, the commission shall require as a condition of the order that the public utility establish and maintain a balancing account reflecting the balance, whether positive or negative, between the related costs and revenues, and the commission shall take into account by appropriate adjustment or other action any positive or negative balance remaining in the balancing account at the time of any subsequent rate adjustment.
(b) The commission shall develop a risk-based approach for reviewing all balancing accounts periodically to ensure that the transactions recorded in the balancing accounts are for allowable purposes and are supported by appropriate documentation.
(c) The commission shall maintain an inventory of the balancing accounts established pursuant to this section.
(d) The commission shall require the public utility to record all related costs and revenues in the balancing account, unless those costs or revenues are specifically exempted by the commission.
(e) The commission shall adopt balancing account review procedures that prioritize the review of the following balancing accounts:
(1) Balancing accounts with a quarter-end balance with more than a 10-percent differential from the balancing account’s authorized revenue amount.
(2) Balancing accounts with an authorized revenue amount that is in the top 25th percentile of all balancing accounts.
(3) Balancing accounts that have experienced volatile fluctuations in their quarterly balances over time.
(4) Balancing accounts that have not been reviewed in the previous three years.
(f) The commission may forgo the review of a balancing account pursuant to this section if the Office of Ratepayer Advocates or an independent auditor plans to review or audit the balancing account. The balancing account review procedures adopted pursuant to subdivision (e) do not apply to the Office of Ratepayer Advocates, and the commission shall retain sole responsibility for the results of those reviews or audits conducted by the Office of Ratepayer Advocates or by independent auditors.
(Amended by Stats. 2016, Ch. 805, Sec. 4. (AB 2168) Effective January 1, 2017.)
Last modified: October 25, 2018