The California Public Utilities Commission (CPUC) has issued a proposed decision that would add five project-level cost-recovery conditions to California’s SB 884 expedited undergrounding program. The proposal would require utilities to compare undergrounding projects with alternative wildfire-mitigation measures and set limits on how much actual project costs and benefits could differ from fully scoped forecasts.
The proposed conditions would apply to Pacific Gas and Electric Company, Southern California Edison, and San Diego Gas & Electric. The commission could consider the proposal as early as November 19, 2026. It would have no legal effect unless the commission adopts it.
The proposed decision builds on Resolution SPD-15 and Resolution SPD-37, which updated the state’s framework for expediting electric line undergrounding under SB 884 of 2022 and adding new cost, audit, and performance requirements intended to tighten wildfire-mitigation oversight.
Proposed project-level requirements
Under the proposal, project costs could be recorded in the program’s balancing account only if the project’s forecast benefit-cost ratio was at least as high as the ratio for the best-performing alternative mitigation measure.
If a project’s fully scoped forecast later fell below the forecast for that alternative, the utility would have to reevaluate the alternative using updated information and confirm that undergrounding remained at least as cost-efficient.
Three additional conditions would set quantitative limits on project performance. A project’s actual benefit-cost ratio could not be more than 30% below its fully scoped Screen 4 forecast, and its actual unit cost could not be more than 30% above its fully scoped Screen 4 forecast. The project’s fully scoped forecast benefit-cost ratio would also have to remain at or above 1.0.
These conditions would supplement existing portfolio-level cost controls and audit procedures.
Utility and consumer positions
The utilities argued that existing safeguards and portfolio-level cost controls are sufficient. The CPUC’s Public Advocates Office and The Utility Reform Network supported project-level oversight, arguing that portfolio reviews could allow recovery for individual projects that perform poorly or are less cost-effective than alternatives.
The proposed decision adopts additional project-level conditions and rejects the utilities’ proposal to allow a 2% variance in annual cost caps.
Implications
SB 884 provides an expedited process for utilities to seek conditional approval of undergrounding costs. The CPUC said early project estimates can be uncertain, so the proposed conditions rely on later, fully scoped forecasts to assess cost recovery. Costs that fail the conditions could be placed in a capped memorandum account and reviewed for reasonableness.