AB 2109 (Carrillo) — the CLECA-sponsored 2024 law exempting qualifying industrial process heat recovery generation from nonbypassable and departing-load surcharges — has reached its implementation phase. The CPUC's new Advanced Electric Rate Design rulemaking (R.26-04-009, issued April 2026) lists AB 2109 implementation among its scoped issues.
What AB 2109 does
Industrial process heat recovery turns waste heat that facilities already produce into electricity with zero marginal emissions, consumed entirely on site. Before AB 2109, California rate design charged surcharges on every self-supplied kilowatt-hour — a penalty on the cleanest generation a manufacturer can build. The law removes that penalty for qualifying installations: no supplemental fuel, at least 500 kW, no more than 25% of peak load, fully self-consumed.
CLECA's implementation position
In opening and reply comments on the OIR, CLECA urged the Commission to implement AB 2109 on an expedited parallel track rather than folding it into the rulemaking's full 24-month schedule. The statute is prescriptive; the qualifying criteria are in the Public Utilities Code; manufacturers with viable projects should not wait until 2028 for an exemption the Legislature enacted unanimously in 2024.
Read more on our legislation page and in our industrial decarbonization positions.