California Passes Law Lowering Energy Bills and Protecting Californians from Utility Misbehavior

Today, California became the seventh state in the nation to prevent for-profit utilities from forcing customers to foot the bill for political lobbying and promotional advertising costs. Authored by Assemblymember Marc Berman (D-Menlo Park), the California Ratepayer Protection Act (AB 1167) will help provide relief for Californians across the state facing skyrocketing utility bills. Co-sponsored by Earthjustice and The Utility Reform Network, the bill enjoyed widespread support from environmental and consumer rights organizations across the state.

“We’re incredibly thankful Governor Newsom stood up for Californians and signed the California Ratepayer Protection Act into law,” said Matt Vespa, senior attorney on Earthjustice’s Right To Zero campaign. “For years, we’ve seen utilities slip millions of dollars in lobbying and promotional advertising costs into customer bills. Now, we’re establishing commonsense guardrails to protect Californians from utilities run amok. We’d like to thank Assemblymember Marc Berman for his vision and persistence to protect Californians in authoring this bill.”

The legislation was shaped after investigations into monopoly utilities SoCalGas and PG&E revealed these corporations attempted to slip the costs for millions of dollars in inappropriate expenses into Californians’ utility bills. Reporting from the Sacramento Bee found that SoCalGas tried to pass $36 million onto customers for its years-long campaign lobbying against clean air and climate measures. PG&E was likewise discovered attempting to spend $6 million in wildfire funds paid for by customers on expensive TV ads to rehabilitate its corporate image.

The facade of Pacific Gas and Electric Company building in downtown San Francisco. (Smith Collection / Gado / Getty Images)

With Governor Newsom’s signing of the bill, California is catching up with states like Connecticut, Colorado, and Maine, which protected their residents with similar safeguards passed in recent years. Analysis from the Energy & Policy Institute indicates that Connecticut has already saved its residents from paying $10 million in appropriate utility expenses with their state law.

“TURN thanks Governor Newsom for standing up for ratepayers by signing AB 1167 and SB 24,” said TURN Executive Director, Mark Toney, PhD. “These bills provide the transparency and penalties needed to stop PG&E, SoCal Edison, SDG&E and SoCal Gas from — misspending customer money on promotional advertising, lobbying against climate goals, and working against local communities that want to join a municipal utility with lower rates.  California residents are facing an unprecedented affordability crisis, and AB 1167 and SB 24 go a long way to holding for-profit utility companies accountable to spending ratepayer money to benefit customers, not to fill shareholder pockets. We thank Governor Newsom for his leadership and look forward to continuing to work with him to achieve utility affordability and accountability.”

Utility rates have far outpaced inflation in California in recent years. PG&E’s rates have increased by 41% in the last 3 years. PG&E reaped record profits for the second year in a row in 2024, with $2.47 billion in profits while requesting approval for six rate hikes on its customers that year. SoCal Edison hit $1.62 billion in profits for shareholders in 2024, after increasing rates by 9.8% last year. Nearly one in five households in California is behind on their energy bills.

The California Ratepayer Protection Act works by establishing a structure to ensure utilities properly account for their political and promotional expenses. This includes:

• Building guardrails with clear definitions of the lobbying, promotional, and other activities for which utilities are prohibited from making customers foot the bill.
• Increasing transparency so misuse of customer money is much easier to spot, for example by requiring a utility’s TV ads and other public messages to clearly identify whether they are paid for by shareholders or customers.
• Establishing consequences by requiring regulators to impose penalties if utilities break the law.