By Grant Stringer, MERCURY NEWS
After falling short last year, lawmakers in the state Senate are advancing bills intended to give customers relief from rising electricity bills and rein in investor-owned utilities like PG&E, which is raking in record profits. The plans are central to the promise of Gov. Gavin Newsom and top Democrats to make California more affordable.
Silicon Valley state Sen. Josh Becker, a Democrat, is at the helm of the plans. Becker chairs the powerful Senate committee on energy, utilities and communications.
“California is at a tipping point,” Becker’s office said in a news release. “Electricity prices are surging, the grid is under pressure and the state must urgently reduce emissions.”
Energy rates in California are on average nearly double the rest of the U.S., according to the nonpartisan state Legislative Analyst’s Office, and more than double rates in neighboring states Oregon, Nevada and Arizona. Prices are highest for customers of the state’s big investor-owned utilities, including PG&E, the main electricity provider in Northern California.
The main reason for the constant uptick is power line undergrounding and other fire mitigation projects by PG&E and other top utilities.
Two bills passed by the Senate this week would drive major changes to energy markets and regulation in California.
With Los Angeles Democratic Sen. Henry Stern, Becker introduced SB 540 – “one of the most consequential actions to improve our grid reliability and achieve our clean energy goals,” Becker said. If passed, the bill would allow California to join a shared energy market with as many as 10 other states in the Western U.S. The Senate floor passed the bill unanimously on Wednesday, and it is headed to the Assembly.
Becker and Stern contend that a regional market would give California better access to reliable electricity as the grid faces rising demand and natural disasters, including heat waves and wildfires. They also argue that linking markets with other states would bring savings. The most recent analysis of the bill cites one study commissioned by the California Energy Commission that found an expanded market scheme could save the state $800 million per year.
The bill was supported by a diverse group including PG&E, the Environmental Defense Fund and tech giants Microsoft and Google, which are seeking abundant energy for AI and data centers.
But dozens of progressive and environmental organizations opposed it, as well as The Utility Reform Network consumer group known as TURN. The nonprofit Consumer Watchdog argued that the bill would relinquish state control of California’s famously ambitious clean energy policies.
“This is a stunning abdication of the Senate’s duty to protect electricity consumers and the state’s environmental laws when they are under threat from the Trump Administration,” said Jamie Court, president of Consumer Watchdog. “California voters should be deeply disappointed in their leaders at time when the affordability of electricity is under scrutiny and our climate laws are under attack from Washington.”
The Senate also passed another consequential piece of energy legislation authored by Becker on Wednesday. SB 254 would make structural changes to the way the California Public Utilities Commission regulates utilities and the manner of financing for pricey infrastructure projects. This time, all 10 Republicans opposed it.
The bill is a cornerstone of Democrats’ “affordability” agenda this year. It includes a mix of short-term and long-term benefits for consumers, said Mark Toney, executive director of TURN, which supports the bill. Under the bill, the state would pour more money from its emissions Cap and Trade program into bill relief for customers. Currently, PG&E ratepayers receive $58 twice a year, according to the utilities commission. Plus, low-income customers would also receive bigger subsidies if the bill passes – though it’s unclear how much.
The bill also would require utilities to finance $15 billion of spending at lower interest rates and without any profits for investors. And in a major development, the bill would create a public authority to finance transmission projects, instead of private investors. Becker’s office contends that would provide “billions in long term savings to ratepayers.”
Britt Marra, executive director of Small Business Utility Advocates, called the bill’s passage in the Senate “a big win for California’s small businesses and struggling ratepayers.”
“Across the state, small businesses are reeling from rising energy costs, and this bill rightly shifts the burden off ratepayers and onto a more sustainable, long-term financing model,” she said.
Utilities were opposed to the bill, and the California Chamber of Commerce condemned it in recent comments to a legislative committee.
“SB 254’s headline promise is lower energy bills, but its mechanics mostly move today’s utility costs around, without eliminating them. By layering state-backed funds, bond instruments and new authorities on top of conventional ratemaking, the bill masks rather than reduces total system costs,” the Chamber said.
Toney at TURN, which supports the bills and many others this session, said he’s “feeling optimistic that the Senate and Assembly leadership are going to stand up for ratepayer affordability and will stand strong against PG&E and other utility lobbying.”
