California Code, Public Utilities Code - PUC § 748.2

(a) Except as specified in subdivision (b), an electrical corporation or gas corporation shall not recover, through a rate approved by the commission, costs arising directly from new or additional activities expressly agreed to by the corporation, or any direct payment, fine, or penalty paid by the corporation, in a settlement agreement resolving a criminal or civil inquiry, investigation, or prosecution for a violation of law, conducted by the Attorney General or a district attorney, county counsel, city attorney, or city prosecutor, and in exchange for the inquiry, investigation, or prosecution to be terminated or concluded.

(b) Notwithstanding subdivision (a), the commission shall only approve an electrical corporation or gas corporation to recover, through a rate, costs described in subdivision (a) if the commission determines that those costs were just and reasonably incurred.