Lawmakers Advance Plan to Slash Power Bills Statewide

Lawmakers Advance Plan to Slash Power Bills Statewide \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ California lawmakers are advancing major reforms to reduce electricity costs and rein in utility profits amid soaring living expenses. New legislation proposes changes to how utilities fund wildfire prevention and infrastructure, boosting oversight and affordability. Despite bipartisan concerns, Democrats say the overhaul is essential for long-term ratepayer relief.

Quick Looks

• Sweeping utility legislation aims to reduce electricity costs
• Wildfire infrastructure costs shift from ratepayers to utilities
• Public financing for $15B in utility projects proposed
• Utilities face new limits on shareholder returns and rate hikes
• Opposition from GOP, utilities, and business lobby groups

Deep Look

As the cost of living in California continues to rise, state lawmakers are taking aggressive action to curb one of the most burdensome expenses for millions of residents: electricity. This week, California’s Democratic-majority Senate advanced a sweeping set of bills designed to rein in utility profits, limit shareholder returns, and reduce the rapid pace of power rate increases that have left many households struggling to keep the lights on.

The centerpiece of this legislative push is authored by Democratic State Senator Josh Becker and represents a fundamental shift in how the state’s investor-owned utilities—such as Pacific Gas & Electric (PG&E), Southern California Edison, and San Diego Gas & Electric—fund major infrastructure projects and wildfire mitigation efforts. Rather than relying solely on ratepayer dollars and passing costs along with hefty profits to shareholders, Becker’s bill proposes leveraging public financing for the first $15 billion in capital expenditures related to infrastructure.

The public financing mechanism would enable utilities to borrow at significantly lower interest rates and, critically, would prohibit them from earning a return on these funds—effectively preventing shareholder profits from being derived from that portion of investment. According to Becker, this approach could yield nearly $9 billion in consumer savings over the next decade by reducing the profit margins typically embedded in ratepayer-funded projects.

This is especially significant in the context of California’s wildfire-prone landscape. In recent years, catastrophic wildfires sparked by utility equipment have devastated communities, caused billions in damages, and led to the bankruptcy of PG&E. To reduce future risk, utilities have been burying power lines, upgrading grid infrastructure, and implementing fire prevention strategies—all expensive undertakings. These costs, however, have largely been passed on to consumers through repeated rate increases.

From 2019 to 2023, the average residential electricity rate in California increased by 47%, according to the state’s nonpartisan Legislative Analyst’s Office. One in five Californians is now behind on their electricity bill, while utilities like PG&E have reported record-breaking profits—despite their role in some of the state’s deadliest fires.

Consumer advocates, such as The Utility Reform Network (TURN), have applauded the reforms. TURN’s executive director, Mark Toney, said the current regulatory environment allows utilities to request rate hikes as often and as high as they wish. “You can’t blame them for asking for the sky,” Toney remarked. Becker’s bill, he argues, is a long-overdue effort to introduce meaningful checks and balances into the rate-setting process.

Among the bill’s provisions are requirements for utilities to submit at least one rate proposal that does not exceed the rate of inflation. This is meant to give regulators and consumers a baseline option that reflects the broader economic environment. The bill would also create a state-managed wildfire fund to reimburse utilities for qualifying fire prevention efforts—a critical measure given the state’s increasing wildfire exposure due to climate change.

Yet despite the bold ambitions of the legislation, it faces stiff opposition from multiple fronts. Utilities themselves have pushed back, warning that the bill could hamper their ability to attract investment and finance future grid improvements. The California Chamber of Commerce has echoed those concerns, stating in a letter of opposition that the legislation “moves today’s utility costs around without eliminating them.” Critics worry that the public financing model, combined with restrictions on shareholder returns, could disincentivize utility companies from making long-term infrastructure investments.

Republican lawmakers, though a minority in both chambers, have also been vocal in their criticism. They argue that the state’s push toward green energy, increased reliance on electricity (especially with the transition to electric vehicles), and extensive regulatory requirements have contributed more to rising rates than utility profits. Sen. Roger Niello, a Republican, dismissed the legislation as a token effort. “Your package of affordability is rather modest in number, but it is even more modest in its potential impact,” he said.

In addition to the flagship bill, the state Senate also moved forward on a variety of complementary measures aimed at bolstering ratepayer protections and enhancing energy reliability. One bill would prevent utilities from using customer funds to pay for political lobbying or public relations campaigns. Another measure seeks to integrate California into a broader regional energy market alongside other Western states, with the goal of increasing grid flexibility, expanding access to cleaner power sources, and reducing costs during peak usage periods.

Still, challenges remain, especially regarding how the state will fund the wildfire reimbursement mechanism proposed in Becker’s bill. California’s budget outlook has tightened considerably, and it’s unclear whether the necessary allocations will be available in the current fiscal year. However, supporters argue that failing to act will leave ratepayers increasingly vulnerable to a status quo that rewards utilities at the public’s expense.

Governor Gavin Newsom, who has previously called on lawmakers to address surging electricity rates through an executive order, has yet to weigh in on the specifics of Becker’s proposals. However, his administration has signaled support for rebalancing the financial equation between utilities and consumers, particularly in the wake of multiple climate-driven disasters that underscore the importance of resilient energy infrastructure.

For now, the reforms head to the Assembly, where they are likely to face intense scrutiny and lobbying from all sides. But one thing is clear: California’s energy landscape is changing, and the legislature is finally attempting to confront the structural forces that have driven electricity costs to unsustainable levels for millions of Californians.

If passed, this new regulatory framework could serve as a national model for addressing utility-driven costs, especially in regions where climate-related disasters are becoming more frequent and infrastructure investments are increasingly urgent.

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