CPUC just issued new backbilling guidelines that went into effect January 1st. Key changes: residential backbilling limited to 12 months except for proven theft, commercial limited to 24 months except for deliberate fraud. SCE and PG&E are still figuring out implementation but this should help a lot of our clients. The old rules allowed utilities way too much discretion on what constituted "extraordinary circumstances." Anyone else seeing impacts from the new regs?
California backbilling update - CPUC new rules 2025
That's huge news for California! Idaho still allows 3 years for commercial but utilities rarely push it that far. The 24-month commercial limit should eliminate most of those ridiculous 5-6 year backbill attempts we used to see from California utilities. Are there any grandfathering provisions for existing disputes?
Good question Warren. The new rules only apply to billing adjustments initiated after January 1, 2026. But there's a provision that ongoing disputes can petition for review under the new standards if the original backbill exceeded the new limits. Already have three clients filing petitions to get their old cases reconsidered.
This is encouraging. Washington has been considering similar reforms after seeing too many small businesses get crushed by massive backbills. The California precedent might help push our UTC to adopt similar limits. Were there any industry opposition during the CPUC proceedings?
Utilities fought it hard, especially on the commercial limits. They argued that sophisticated customers should know when their bills are too low. CPUC rejected that, noting most customers reasonably rely on utility billing accuracy. The consumer advocates did excellent work documenting cases where backbills exceeded the customer's annual profit.
Ohio utilities are watching California closely. We might see similar reforms here if the new rules work well. The 24-month commercial limit seems reasonable - gives utilities time to catch billing errors but prevents the kind of business-killing backbills we see too often.
Any word on how this affects multiplier and CT errors? Those are usually utility equipment issues but some utilities claim customer responsibility for not catching obviously wrong bills.
Carol raises an important point about equipment errors. The new California rules clarify that utility-owned equipment errors fall under the general backbilling limits unless there's clear evidence the customer knew about and failed to report the problem. This should end the practice of utilities claiming extended periods for their own equipment failures. Hopefully other states will follow California's lead on this sensible reform.