CA AB2463

Requires the California Public Utilities Commission to open a rulemaking by April 1, 2027, to conduct a systemwide review of methodologies used to determine cost of capital and authorized return on equity for electrical and gas corporations

Mandates establishment of a "baseline capital-market risk framework" as the analytical foundation for determining authorized returns on equity, which utilities can only exceed by demonstrating they face materially greater risk than reflected in the framework

Requires development of a strategy to adjust authorized returns on equity based on load growth or sales volume thresholds, recognizing that sustained load growth may reduce per-unit revenue risk and warrant downward adjustments

Directs review of the cost of capital adjustment mechanism to evaluate whether it has operated symmetrically in both upward and downward directions, including examination of instances where reductions were not triggered despite supporting market conditions

Requires evaluation of returns on equity for infrastructure where initial capital was provided by transmission-level customers rather than the utility, ensuring returns reflect the utility's actual capital at risk rather than full equity returns