CA Legislature Greenlights McNerney’s Bill to Streamline ADUs by Accelerating Utility Hookups

The California Legislature today approved Sen. Jerry McNerney’s SB 1196, which will streamline the creation of accessory dwelling units by accelerating utility service connections.

SB 1196 would direct the California Public Utilities Commission (CPUC) to establish clear timelines for utility hookups requests for ADUs, also known as backyard cottages, and institute penalties for utilities that that do not timely process energization applications.

“California homeowners and ADU builders are increasingly frustrated by long delays – up to a year – to obtain utility service connections. The problem is, there are no clear rules for when a utility must hook up an ADU – and no consequences for delays,” said Sen. McNerney, D-Pleasanton. “SB 1196 will help ensure that when a homeowner adds an ADU, they’ll be able to get it hooked up without waiting months on end.”

The Senate approved SB 1196 on a vote of 29-10 after the Assembly approved the bill on Monday on a 56-8 vote. SB 1196 now goes to the governor’s desk.

In addition to streamlining the creation of ADUs and Junior ADUs, SB 1196 would accelerate utility service connections for other small energization projects, such as an electric vehicle charger or a home backup battery.

During the past decade, the Legislature passed numerous laws to streamline the construction of low-cost ADUs. As a result, the number of new ADUs permitted in the state skyrocketed from 800 a year to about 30,000. ADUs now represent about one-third of new homes in the state, and many homeowners are adding ADUs to rent or lease as lower-cost housing. 

Although ADUs are more affordable to construct than other types of housing, they can still cost homeowners $200,000 or more, depending on the size of the unit. As such, many homeowners cannot afford long delays for an ADU utility service connection, as they need to rent or lease the unit to begin to recoup their investment.

Yet many homeowners and ADU builders say they’re being forced to wait nine to 12 months for a utility hook up. Such long delays not only place an undue financial burden on property owners but also exacerbate the state’s housing shortage.

ADU builders also say utilities can worsen delays by not allowing service connection applications to be filed until a homeowner has received a building permit. Some utilities also cancel ADU applications without the homeowners’ consent, forcing property owners to resubmit their applications and prompting more delays.

SB 1196 streamlines ADUs and other small energization projects, defined as those that do not require IOU-infrastructure upgrades, by:

• Allowing applicants to submit a request for a utility hookup at the same time they request a building permit;
• Barring utilities from canceling a service connection application without the applicant’s consent.

The bill also directs the CPUC to:

• Create clear timelines for IUOs to process service connection requests
• Establish penalties for IOUs that do not timely process energization applications.

Sen. Jerry McNerney is chair of the Senate Revenue and Taxation Committee, and his 5th Senate District includes all of San Joaquin County and Alameda County’s Tri-Valley.