Section 387.
Cal. Public Utilities Code - PUC § 387.
in effect(a)
For purposes of this article, the following terms have the following meanings:
(1)
“Carbon-free electrical resource” means a source of electrical generation that emits no greenhouse gases when generating electricity that is deliverable to retail end-use customers in California.
(2)
“Load-serving entity” has the same meaning as defined in Section 380.
(3)
“Provider of last resort” means a load-serving entity that the commission determines meets the minimum requirements of this article and designates to provide electrical service to any retail customer whose service is transferred to the designated load-serving entity because the
customer’s load-serving entity failed to provide, or denied, service to the customer or otherwise failed to meet its obligations.
(b)
The provider of last resort shall be the electrical corporation in its service territory unless provided otherwise in a service territory boundary agreement entered into pursuant to Article 1 (commencing with Section 8101) of Chapter 6 of Division 4, or unless another load-serving entity is designated by the commission pursuant to subdivision (c) or (d).
(c)
The commission may designate a load-serving entity other than the electrical corporation to serve as a provider of last resort in the electrical corporation’s service territory by approving a joint application by the electrical corporation and the load-serving entity that proposes to become the new provider of last resort in the electrical corporation’s service territory. The application may
request a transfer of the responsibilities of the provider of last resort for the entire service territory of the electrical corporation or for a portion of that service territory. The application shall include all of the following:
(1)
A demonstrated ability by the load-serving entity seeking to become the new provider of last resort to post a bond sufficient to meet the minimum threshold established pursuant to subdivision (e).
(2)
A demonstrated history of contracting for electricity and access to carbon-free electrical resources by the load-serving entity seeking to become provider of last resort.
(3)
A viable plan for meeting the resource adequacy requirements established pursuant to Section 380, the requirements of the California Renewables Portfolio Standard Program (Article 16 (commencing with Section
399.11)), and all other load-serving entity procurement requirements.
(4)
A history of the load-serving entity seeking to become the provider of last resort participating in, and complying with the requirements of, the integrated resource planning process pursuant to Sections 454.51, 454.52, and 454.54, and all other load-serving entity procurement requirements.
(5)
The full disclosure by the load-serving entity seeking to become the provider of last resort of any fines or penalties imposed by, or violations of law found by, any regulatory body of any state or territory, or the federal government.
(6)
A detailed history of the safety record of the load-serving entity seeking to become the provider of last resort.
(7)
An implementation plan to provide
for universal access, equitable treatment of all classes of customers, and other customer protections including electric service disconnection procedures consistent with Sections 718 and 779.3.
(d)
The commission shall develop a process to facilitate a joint application from load-serving entities that are not electrical corporations to request to transfer the responsibilities of the provider of last resort. This process shall apply when one load-serving entity that is not an electrical corporation has already been designated as a provider of last resort, as described in subdivision (c). The commission may approve a joint application by the designated provider of last resort and the load-serving entity that proposes to become the new provider of last resort in the service territory. The application may request a transfer of responsibilities of the provider of last resort for the entire service territory or for a portion of that service
territory. The application shall include all of the elements described in subdivision (c). All of the requirements of this article are applicable to the load-serving entity that proposes to become the new provider of last resort in the applicable service territory.
(e)
While a load-serving entity is serving as the new provider of last resort pursuant to subdivision (c) or (d), the commission shall not enforce the provider of last resort requirements on the former provider or providers of last resort.
(f)
The commission shall develop additional threshold attributes for a load-serving entity other than an electrical corporation to serve as a provider of last resort to retail end-use customers in California that include all of the following:
(1)
Minimum insurance requirements.
(2)
Minimum financial requirements necessary to provide electricity to retail end-use customers in each service territory.
(3)
Compliance with resource adequacy requirements pursuant to Section 380, requirements of the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11)), integrated resource planning requirements pursuant to Sections 454.51, 454.52, and 454.54, and all other state-mandated procurement requirements.
(4)
Electric service disconnection rules pursuant to Sections 718 and 779.3.
(5)
Any additional minimum requirements that the commission determines are needed to ensure that the provider of last resort will perform its obligation to serve.
(g)
The commission shall ensure that the provider of last resort for each service territory receives reasonable cost recovery for being designated and serving as a provider of last resort.
(h)
To ensure continued achievement of California’s greenhouse gas emission reduction and air quality goals, and continued accounting of emissions of greenhouse gases for California pursuant to Part 2 (commencing with Section 38530) of Division 25.5 of the Health and Safety Code and other emissions reporting programs, in preparation for an unplanned customer migration to a provider of last resort, the commission, in consultation with the Energy Commission, may do both of the following:
(1)
Establish rules for all load-serving entities in preparation of any potentially large and unplanned customer migration.
(2)
Recommend to agencies modifications to relevant regulations.
(i)
Notwithstanding any other law, electrical corporations shall continue to provide all metering, billing, and collection to retail customers served by the provider of last resort. Bills sent by an electrical corporation to retail customers shall identify the designated provider of last resort. The commission shall determine the terms and conditions under which the electrical corporation provides these services to the provider of last resort.
(j)
The commission shall supervise and regulate each provider of last resort, as necessary, as a public utility for the services provided by the provider of last resort pursuant to this article to ensure the provision of electrical service to customers without disruption if a load-serving entity fails to provide, or denies, service to any retail end-use customer in
California for any reason. The commission may do all things that are necessary and convenient in the exercise of this power.
(k)
This section does not limit the authority of the commission to regulate the terms of service or establish requirements for provider of last resort service by an electrical corporation or any new provider of last resort.
References
referencesCal. Health and Safety Code - HSC § 38530.
referencesCal. Public Utilities Code - PUC § 380.
referencesCal. Public Utilities Code - PUC § 8101.
referencesCal. Public Utilities Code - PUC § 399.11.
referencesCal. Public Utilities Code - PUC § 454.51.
referencesCal. Public Utilities Code - PUC § 718.
Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026