On December 24, 2025, the California Public Utilities Commission (CPUC) issued a proposed decision in Rulemaking R.24-01-018 that would formally establish a standard offer for Flexible Service Connections (FSCs) for distribution customers facing capacity constraints. The proposal, which had not yet been adopted as of late December, addresses longstanding concerns about long energization timelines that delay customer interconnections when local distribution upgrades are required.
The decision is a direct response to legislative direction in Assembly Bill 50 and the Powering Up Californians Act (SB 410), which mandate CPUC action to improve and accelerate utility service connection timelines in distribution-capacity constrained areas.
Background and Context
Rulemaking R.24-01-018 was opened in January 2024 to establish energization timelines and identify process improvements for distribution system connections that trigger upstream upgrades. The proposed decision reviewed the record developed through workshops, rulings, and utility filings earlier in 2025.
A primary goal of the proceeding is to reduce delays faced by customers — especially large or critical loads — that otherwise wait years due to capacity upgrades before receiving service. This proposal focuses on Phase 2 issues, centering on the mechanics of formalized FSCs, tariff requirements, data transparency, and process improvements tied to energized capacity delivery.
Flexible Service Connections (FSCs): What They Are
Flexible Service Connections are mechanisms that allow customers to access grid capacity in advance of completed upgrades by agreeing to defined load or generation profiles that align with distribution system capability. The decision distinguishes between:
- Static FSCs: Pre-defined limited load profiles that do not rely on real-time communications for enforcement, and
- Dynamic FSCs: Capacity managed through distributed energy resource management systems (DERMS) or similar controls.
Both PG&E and SCE have been piloting FSC-like bridging mechanisms. PG&E’s “Load Limit Letters” provide static capacity constraints for customers in limited locations, and SCE’s Load Control Management Study (LCMS) pilot explores similar options. The proposed decision would formalize a standard offer FSC across utilities rather than leave these offerings solely as pilot or ad-hoc options.
Key Components of the Proposed Decision
The proposed decision includes several critical elements that would fundamentally alter how distribution capacity constraints are managed:
- Standard Offer Requirement: PG&E and SCE would be directed to provide a standard offer FSC option in their tariffs. This ensures that customers facing constrained capacity have a consistent procedural path rather than relying on optional or pilot programs.
- Preliminary Capacity Assessment: Utilities must formalize and integrate preliminary capacity assessment processes that help customers and developers understand available grid capacity at specific points, reducing uncertainty early in the project lifecycle.
- Tariff Rule Updates: The proposed decision requires corresponding tariff revisions to embed FSC terms formally and ensure clarity on capacity limits, enforcement mechanisms, and customer obligations.
- Data and Reporting: Utilities will be required to collect and report capacity and FSC utilization data to improve transparency and refinement of the standard offer mechanism over time. This is intended to support ongoing evaluation and continuous improvement.
- No Impact on Queue Position: The FSC mechanism, as proposed, would not affect a customer’s position in the distribution or interconnection queue, ensuring that accelerated energization opportunities do not disadvantage other applicants.
Lessons from Existing Pilots
The decision references existing bridging strategies and FSC pilots, including:
- PG&E’s Load Limit Letters, which have been issued since mid-2023 and provide static limited load acknowledgment at specific grid locations.
- SCE’s LCMS pilot, which includes both static and communications-based profiles, though uptake has been limited and dynamic options have not yet seen broad adoption.
These pilots inform the standard offer design, particularly around technical elements and implementation timelines, and reinforce the Commission’s intention to codify reliable, repeatable options for customers rather than temporary programs.
Process and Implementation Considerations
The proposed decision articulates a number of procedural enhancements designed to ensure effective execution:
- Adoption and Advice Letter Filing: Utilities must file advice letters detailing how they will implement the standard offer FSC, including tariff changes and process documentation.
- Average Time Targets: The decision notes that utilities should continue to streamline internal engineering and process steps, with average time goals for each stage of the energization and capacity assessment steps.
- Cost Tracking and Evaluation: Utilities are expected to track cost data and provide periodic evaluations to the Commission to demonstrate cost efficiency and to support refinements.
Stakeholder Commentary and Remaining Issues
Parties in the proceeding broadly supported the establishment of standard offer FSCs to expedite energization where capacity constraints exist. Many stakeholders emphasized the need for clear, predictable rules that prospective customers could rely on when planning large projects or investment decisions.
Remaining issues — including potential enhancements to dynamic FSCs, compensation structures for constrained capacity use, and more robust integration with the CPUC’s broader DER and High-DER initiatives — remain open for further exploration in subsequent decisions and related rulemakings.
Why This Matters
For developers, large load customers, and distribution planners, the proposed decision represents a significant step toward standardizing how capacity constraints are managed, reducing wait times for service connections, and improving predictability in project timelines. By formalizing FSCs in tariffs and embedding them in utility process workflows, the CPUC seeks to bridge a longstanding gap between customer energy needs and distribution grid capacity limitations, offering a new tool to accelerate project delivery without sacrificing reliability.
ZEG Perspective
Zero Emission Grid supports stakeholders interpreting the implications of this proposed decision for project timelines, tariff risk, and integration planning. As California distribution infrastructure grapples with rapid electrification and DER growth, clarity around energization pathways is increasingly essential to investment certainty. Contact us to get started today.
