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California Democrats will try again to slash high energy bills

A consistent gripe has reached the ears of California lawmakers in Sacramento as customers’ energy bills rise to new heights, driven by the costs of destructive wildfires and other factors.

“They’re worried about bills going up,” state Sen. Jerry McNerney, a Democrat representing San Joaquin and eastern Alameda county, said in an interview. “It’s on my mind and everybody around here’s mind.”

    McNerney, who took office in December after 16 years in Congress, is joining Democrats who control the levers of power at the state Legislature who say they’re redoubling their efforts this year to give energy customers relief from steep energy bills.

    Energy rates in California are on average nearly double the rest of the U.S., according to the nonpartisan state legislative analyst’s office, and more than double rates in neighboring states Oregon, Nevada and Arizona. Prices are highest for customers of the state’s big investor-owned utilities, including PG&E, the main electricity provider in Northern California, which received regulatory approval to raise rates a whopping six times last year. The main reason for the constant uptick? Power line undergrounding and other fire mitigation costs for PG&E and top utilities totaled $16 billion since 2020, according to another legislative report — plus another $11 billion for fires themselves and insurance premiums.

    “These are massive investments that are happening, and they’re really needed,” said Britt Marra, executive director of the San Francisco-based nonprofit Small Business Utility Advocates.

    However, PG&E also raked in a record $2.5 billion profit last year.

    Marra and other consumer advocates say customers are bearing too much of the system’s costs. They want state lawmakers to hold utilities accountable in the current legislative session, which kicked off in December.

    PG&E executives have said that the cost increases will slow or stop if the utility’s own costs diminish for wildfire hazard mitigation. Regardless, McNerney said the company is unpopular in his conversations with voters.

    “Whenever I mention PG&E, people have a negative reaction,” he said.

    Democrats have promised to tackle the issue this year as part of their post-election focus on California’s high cost of living.

    In the state Senate, Sen. Josh Becker, a Menlo Park Democrat, kicked off the session in January with an informational hearing that saw Sen. Aisha Wahab, Hayward Democrat, grill the president of California’s Public Utility Commission that regulates power providers.

    “Ratepayers are not a bank,” Wahab told commission president Alice Busching Reynolds during the meeting of the Senate energy, utilities and communications committee. “I’m deeply disappointed in the fact that ratepayers are being treated like an endless bucket of money, because they are not.”

    The most influential bill introduced so far this session is Becker’s Senate Bill 254, which was released in its expanded form on Tuesday.

    The bill is intended to give ratepayers relief by paying for some projects with other sources of funds, expand subsidies for low-income residents and provide all customers with credits to use during summer months when bills are priciest. It would also expand oversight and transparency of rate increases and utilities’ profits.

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    The influential consumer advocacy group The Utility Reform Network supports the bill for its combination of long-term cost reductions for ratepayers and immediate relief, executive director Mark Toney said in an email.

    Democrats have already introduced a slew of bills to blunt the high cost of energy bills — including ambitious bills by local lawmakers that were quickly cut down by Becker’s committee on Monday, a familiar tale in a state legislature where utilities hold major sway.

    The committee overwhelmingly passed Senate Bill 24, introduced by McNerney, which aims to prevent utilities from spending ratepayer dollars on political lobbying and advertising by closing loopholes in the law. It would add teeth to existing law that bans utilities from spending the public’s funds to fight policy they may not agree with, such as municipalization, McNerney said. If passed, his bill would fine utilities $10,000 each day they violate the law and kick refunds back to rate payers.

    However, the Democrat-controlled committee signaled it wouldn’t support a provision in the bill to bar utilities from shutting off power to customers on days of unhealthy air quality. McNerney said that part of the bill was “too broad” but intended to support vulnerable residents.

    “It would be nice to find some way to protect people who are on the margins and having trouble breathing,” he said. “But we have to take what we can get at this point.”

    Wahab on Monday also accepted major amendments to her ambitious proposal, Senate Bill 332, which would have capped energy bill increases at the rate of inflation and would have limited power shutoffs to pregnant customers, seniors and other vulnerable groups who can’t or don’t pay their bill.

    Wahab struck those clauses and another major part of the bill that would have required the state to study and implement a plan to ditch major utilities altogether. The bill as of Wednesday afternoon would only require a state agency to conduct the study.

    PG&E and utility trade groups had opposed both of the bills.

    In a written opposition, PG&E urged Wahab “to reconsider the provisions of this bill and work with stakeholders to develop a more balanced and effective approach to addressing the complex issues facing California’s energy system.”

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