Newsom Orders Review to Address Rising Electricity Prices
Governor Gavin Newsom signed an executive order October 30 intended to provide relief for rising electricity prices. A key point in the order directs the California Public Utilities Commission (CPUC) to identify any underperforming programs that could be leading to rising electricity costs.
Newsom acknowledged that “Californians have seen their electric bills rise in recent years, outpacing the rate of inflation.” The order stated that “electric rate increases have been driven largely by the cost of some programs added over time, such as the subsidy provided through the legacy Net Energy Metering program for rooftop solar photovoltaic systems.” It also cited investments to reduce wildfire risk.
Critics of California’s focus on renewable energy, however, cited the high cost of solar and battery power at higher cost and the cost of the state’s cap-and-trade program as contributed to higher electricity prices.
Executive Order
The executive order outlines four key areas:
Return unused funds: The executive order asks CPUC to “identify underperforming programs and return any unused energy program funds” back to private utility customers as credits on their utility bills.
Maximize the California Climate Credit. The order directs the California Air Resources Board (CARB) to work with the CPUC to “determine ways to maximize the California Climate Credit.” This program applies twice annual credits to customers’ electricity and gas bills through funds from the state’s cap-and-trade program, which requires certain emitters to purchase greenhouse gas allowances and offsets.
Make long-term cost reduction recommendations. The order asks the CPUC and the California Energy Commission (CEC) to evaluate electric ratepayer supported programs and the costs of regulations to identify any changes that could reduce utility bills. It also directs the CPUC to pursue any federal funding available to help reduce electricity costs for residents.
Smarter wildfire mitigation investments. The executive order directs the Office of Energy Infrastructure Safety and the CPUC to evaluate utility wildfire safety oversight practices and ensure that utility investments and activities are focused on cost-effective wildfire mitigation measures.