Stunt or first step? Inside state’s last-minute effort to cut electric bills, streamline clean energy

The Legislature and Gov. Gavin Newsom have significantly scaled back their eleventh-hour plans to reduce Californians’ electric bills and fast-track renewable energy projects.

Many experts said the proposed measures now amount to a political gesture or, at best, a small first step toward solving the problems, rather than nuts-and-bolts, comprehensive steps that would give Californians financial relief or speed up solar and wind projects.

The main proposal addressing California’s rising electric bills would give each household a small, one-time credit of between $30 to $70, according to a person familiar with the bill. The measure would save an estimated $500 million, which would come from cuts in utility programs that assist low-income residents and schools.

It’s uncertain whether the scattershot, gut-and amend-approach will win the Legislature’s approval by Saturday, the deadline for when all legislation for the year must be approved.

For weeks, top lawmakers and the governor’s aides have negotiated a series of proposals aimed at addressing California’s twin clean energy challenges: meeting mandates for clean, carbon-free energy and reducing electric bills that are among the highest in the nation.

By the Wednesday night deadline, the state’s leaders unveiled six bills that address the cost of electricity and building of renewable energy projects.

Environmental groups, clean-energy businesses and consumer advocates have mixed feelings about all of them, with some saying they are largely ineffective and others saying they are a good first step.

Loretta Lynch, an environmental consultant and former president of the California Public Utilities Commission, told CalMatters that customer bills are climbing because the commission keeps giving the green light to rate increases. The Assembly measures wouldn’t address the biggest drivers of costs to consumers, she said.

“The last minute, gut-and-amend backroom deals do not attack the root causes of California’s incredibly high energy bills,” she said. “Instead, they rob Peter to pay Paul — taking away key funds from programs that work to create a sham (consumer) bill reduction.”

But Mark Toney, executive director of The Utility Reform Network, supported the measures, saying they are “an important first step towards affordable energy for all California residents.” He has called lowering ratepayers’ costs an urgent priority because the state could lose public support for clean energy.

Molly Croll, director of Pacific offshore wind for American Clean Power, a renewable industry group, said she was surprised by the streamlining proposal and has no position on it, since it wasn’t anything the industry lobbied the Legislature for. “We haven’t had input,” she said echoing comments from other renewable energy groups.

Senate President Pro Tem Mike McGuire, a Democrat from Santa Rosa, told CalMatters he would try again next year by bringing back more proposals.

“This is a two-year effort,” he said. “Anything worth its weight in life, anything big and bold, takes time. But we’re committed.”

Californians have seen their electric bills nearly double over the last decade as the state’s biggest utilities have passed on spending from reducing wildfire risks and transitioning rapidly away from fossil fuels. Rates are expected to continue to outpace inflation through 2027.

Two measures authored by Assemblymember Cottie Petrie-Norris, a Democrat from Irvine, aimed at reducing energy bills were introduced Wednesday night by gutting and amending two unrelated bills.

Assembly Bill 3121 would require ratepayers to be paid funds — reportedly amounting to the single $30 to $70 credit for each household — from a few consumer energy programs in areas served by Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric.

Included is a program that provides upgrades to school heating and air conditioning systems, and two programs that help low-income Californians save on their energy bills with incentives for installing solar panels and rebates for energy storage.

Advocates for the programs say the proposed cuts would harm low-income Californians and children while cutting ratepayers’ utility bills only an inconsequential amount.

“It is a pound-foolish decision that doesn’t address the systemic (energy) affordability crisis we’re facing,” said Stephanie Seidmon, program director for UndauntedK12, a nonprofit that helps public schools transition to clean energy. “It feels more like a political stunt and it’s unconscionable we would do that to our children, our staff members and our teachers who come to schools that are not always safe learning and working environments.”

Jennifer Robison, a Pacific Gas & Electric spokesperson, said the company hasn’t taken a position on AB 3121, but supports returning money to customers from the programs.

“PG&E shares the legislature’s and Governor’s focus on making energy bills more affordable for our customers. We’re working to stabilize bills and limit average annual bill increases to no more than 3% through 2026,” she said in a statement. She said the company has “adopted companywide savings initiatives to reduce our operating costs and limit unnecessary expenses” and is “supporting customers with ways to reduce energy use and bills.”

The second legislative proposal, Assembly Bill 3264, would require the Public Utilities Commission to study how to reduce costs of expanding transmission capacity and report to the Legislature on energy efficiency programs funded through consumers’ utility bills.

Two other Senate bills are aimed at utility costs. Senate Bill 1003 would help address the cost of utilities’ wildfire plans, advocates said, and Senate Bill 1142 would prevent power shutoffs for ratepayers who agree to payment plans.

The Senate moved forward with a considerably scaled-back version of proposals to fast-track renewable energy projects. Those proposals aimed to streamline and assist solar, offshore wind, battery storage and other green energy projects.

Senate Bill 1272 would allow the California Energy Commission to adopt an overall environmental impact report that evaluates the potential effects common to a wide range of clean energy projects. The approach allows developers in most cases to rely on that analysis, saving time and money.

Renewable energy advocates asked for more time to craft better legislation given the bill “raises more questions than it answers.”

Instead, the clean energy groups wanted the state to update its tax code to align with federal rules that would allow them to take advantage of renewable energy tax credits that are part of the Biden administration’s Inflation Reduction Act, without being taxed on them as income.

“We appreciate the intent to facilitate project streamlining, which is definitely needed, but deserves more discussion,” Shannon Eddy, executive director of the Large-scale Solar Association, told CalMatters. “What clean energy projects need in that timeframe is tax conformity.”

McGuire backed away from proposals that would create the tax credits, streamline local and state permitting and grant “by right” approval to developers building in areas already zoned for them, which would eliminate the need for local approvals, according to a previous CalMatters report.

Also gone are proposals to consolidate the process by creating a “one-stop shop” system that would consolidate applications, hearings and decision-making.

McGuire told CalMatters that creating tax credits was difficult given the state’s large fiscal deficit. He said he would bring back the rest of the measures next year.

To meet its ambitious greenhouse gas targets, California must supply 60% of its energy from renewable sources by 2030 and 100% by 2045. Californians are facing the highest energy bills in continental America.

Another proposed measure, Senate Bill 1420, would allow hydrogen-producing facilities to benefit from some streamlining under the California Environmental Quality Act. One environmental group, California Environmental Voters, said they would oppose the measure because it could open the door to hydrogen facilities powered by fossil fuels getting expedited.

It was not clear Thursday whether any of the measures would come to a vote by Saturday — or whether they would pass — given tense negotiations and competing priorities of legislators.

Newsom warned legislative leaders he would call a special session to address energy issues unless Senate Bill 950 aimed at gas prices was passed — a prospect the state Senate’s leader, McGuire, publicly opposed. A spokesperson for Assembly Speaker Robert Rivas declined to comment.