California lawmakers plan to give out $500M in electric bill refunds, streamline clean energy

California lawmakers unveiled a series of measures Wednesday meant to streamline renewable energy development and lower the cost of monthly electric bills, as this year’s legislative session reached the pinnacle of a frenzied final week.

One could put about $30 in the pockets of California’s roughly 17 million customers of investor-owned utilities, Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric.

After months of negotiations and pledges from leaders to prioritize the issue, seven bills were released on the last day possible. Gov. Gavin Newsom encountered significant challenges in recent weeks to his proposals to lower energy bills and thwart gas price spikes.

The eleventh-hour legislative package aims to meet two climate priorities that can sometimes be in competition: meeting the state’s rapidly approaching clean energy targets and addressing growing concerns about electricity affordability.

The bulk of the package is meant to dovetail with the Biden administration’s signature climate law by taking advantage of federal investment in clean energy projects. It was spearheaded by Senate Pro Tempore Mike McGuire and dubbed “California Made.”

Those five proposals, including SB 1272 , SB 950 , SB 1003 and SB 1140 , would overhaul the way the state approves and supports solar, offshore wind, battery storage, hydrogen and other green energy projects with simplified environmental permitting.

Another two measures mark a more controversial, significantly scaled-back version of a plan spearheaded by Newsom to lower electric bill costs. Those, AB 3121 and AB 3264 , were introduced by Assemblymember Cottie Petrie-Norris, D-Irvine.

One of the two bills will draw up to $500 million in surplus money from three ratepayer funded grant programs that currently support schools and low-income communities. The savings will be returned via rebates to roughly 15 million customers of IOUs.

The other would initiate a study of hundreds of other energy efficiency programs currently underwritten by ratepayers and ask the Public Utilities Commission to lower the burden on electricity customers.

“We have a proposal on the table that will deliver real relief for Californians today, and will also set a foundation to lower bills in the long term,” Petrie-Norris said in an interview. “We’re working to put more money back into pockets of hard working Californians.”

Session coming to a close

With a deadline to pass legislation fast approaching, Newsom reportedly threatened to call a special session this fall in an effort to pressure lawmakers to pass these and another measure framed as tackling energy affordability.

That bill would require oil refiners to maintain gasoline reserves to prevent fuel shortages and price spikes when equipment is taken offline for maintenance. It would mark the first major result of his 2022 special session on gas prices.

Newsom retreated from key pieces of his initial affordability plan following opposition from electrical workers and utilities. That included the piece of the governor’s original plan that experts said would affect bills the most.

Securitization, effectively lowering interest rates on utilities’ capital investment, would also have cut into’ shareholder profits. Opponents warned that the financial process could raise company borrowing costs and trickle into bills.

California’s legislative session concludes Saturday, Aug. 31. Newsom’s office did not respond to a request for comment.

Energy growing pains

California is undergoing major energy growing pains, with electricity demand increasing for the first time in decades as utilities transition away from fossil fuels and try to keep their equipment from sparking devastating wildfires.

The “California Made” package marks another push toward achieving California’s clean energy targets. Today, the state still procures roughly 40% of its electricity from fossil fuels, far from a goal set in 2022 to reach 90% renewable by 2035.

To get there, the state is relying on its investor-owned utilities — not only to invest in renewable energy but also to spend billions undergrounding power lines to help prevent wildfires and upgrade infrastructure to accommodate demand.

Between those costs and the growing need for air conditioning during hotter summers, summer electric bills for customers of those utilities — PG&E, SoCal Edison and SD G&E — are reaching new heights.

Residential electricity bills in California have increased by as much as 110% in the last decade, according to the public advocate’s arm of the state Public Utilities Commission. In just the past three years, bills for customers of the big three IOUs have seen 20-50% increases.

A group of protesters and customers of PG&E outside the capitol Tuesday blasted state leaders for their high bills, noting the stark difference in costs to power their homes versus those in Sacramento Municipal Utility District territory.

No matter how much energy they conserved in their modest-sized homes, several protesters said, their monthly bills amounted to hundreds of dollars even with minimal use of air conditioning this summer.

They called on lawmakers and the governor to lower electric bills by more forcefully regulating utilities through the California Public Utilities Commission, arguing the appointed body should be made up of elected officials.

“You have elderly people begging not to turn their power off. We feel like we’re being ignored,” said Kelly Smith, co-founder of advocacy group Stop PG&E that launched this spring. “This is a temporary fix, not a solution. It’s mean to pacify us.”