Bills Would Ban Utilities from Lobbying with Ratepayer Funds
On March 25, 2025, two bills were introduced that would prohibit investor-owned utilities (IOUs) from using revenue from customer rates to pay for political influence or promotional advertising. Both SB 24 and AB 1167, the California Ratepayer Protection Act, would prohibit utilities from using ratepayers funds for political reasons and require utilities to disclose in all of their advertising expenses whether the advertising costs are paid by the corporation’s shareholders or by ratepayers. The proposed bills would also expand the definition of political influence and promotional advertising and give the California Public Utilities Commission (CPUC) new authority to fine utilities that violate the law. Lawmakers introduced a similar bill last year, but it failed to advance.
Existing law prohibits regulated public utilities from using ratepayer funds for political advocacy and promotional advertising and requires that spending from those activities come from shareholder funds. Consumer groups, however, have argued that a narrow definition of political lobbying and a lack of transparency have allowed utilities to get around the law. Notably, utilities have used ratepayer funds to fund trade groups that, in turn, lobby legislators and pay for advertising. The Sacramento Bee reported that SoCalGas spent $36 million in ratepayers funds for political lobbying in 2019 aimed at opposing the state’s climate laws.
Prohibited Activities
Both AB 1167 and SB 24 would prohibit utilities from using ratepayer funds for:
Membership dues, sponsorships, or other contributions to an industry trade association, group, or related entity;
Charitable giving;
Political influence activities;
Promotional advertising;
Payments to outside attorneys or experts for work related to commission proceedings that exceed the amounts that would be permitted for rate recovery under the commission’s intervenor compensation program;
Contributions to political candidates, political parties, campaign committees, issue committees, or independent expenditure committees, or other political expenses;
Litigation regarding existing or proposed federal, state, or local regulations, legislation, or ordinances;
A cost, including marketing, administration, or customer service, for products or services not regulated by the commission;
Penalties or fines, including tax penalties or fines, issued against a utility;
Board of directors and officers liability insurance, and travel, lodging, food, or beverage expenses for a utility’s board of directors and officers or the board of directors and officers of a utility affiliate;
An owned, leased, or chartered aircraft for the utility’s board of directors and offices or the board of directors and officers of a utility affiliate; or
Investor relations.
The senate bill includes the municipalization of electrical or gas service in its prohibited activities.
Reporting Requirement
Utilities would be required to provide the commission with a report of expenses from the previous calendar year and would require the report to contain specified information for each business unit of the corporation that performs work associated with political influence activities or promotional advertising. The utility would be required to make the report publicly available.
Political Influence Activities
The bills define a “political influence activity” as an activity for the purpose of directly or indirectly influencing:
The adoption, repeal, or modification of federal, state, or local legislation, regulations, or ordinances.
The election, recall, appointment, or removal of a public official or the adoption of initiatives or referenda.
The approval, modification, or revocation of franchises of a utility.
Public opinion with respect to legislation, regulations, ordinances, elections, referenda, or rate setting of a utility.
Decisions of federal, state, or local public officials.
A “political influence activity” also includes research, preparation, or any other activity undertaken to support any of these activities.
Promotional Advertising
The bill also defines “promotional advertising” as written, online, video, or audio communications that primarily build the public image of a utility, including communications about the undergrounding of electrical lines or other actions that a utility may take in the future.
Notably, the bills do not prohibit a utility from making these types of payments with ratepayer funds if the payment is made pursuant to a labor agreement.
Lastly, SB 24 would prohibit utilities from turning off a resident’s power for nonpayment on days when the air quality “is in the unhealthy for sensitive groups category or worse.”