California Bill Aims to Shield Customers From Utility Political Spending
SACRAMENTO, CA - California lawmakers have passed legislation restricting investor-owned utilities’ use of customer funds for political and lobbying activities, marking a significant step in a growing national trend to increase utility accountability. Senate Bill 24, authored by Senator Jerry McNerney (D-Pleasanton), prohibits these utilities from using ratepayer money to oppose efforts to establish municipal utilities and grants the Public Advocate’s Office at the California Public Utilities Commission (PUC) full investigatory authority over investor-owned utilities.
California’s investor-owned utilities actively opposed both SB 24 and a related measure, Assembly Bill 1488, which requires utilities to disclose political and lobbying spending. Governor Newsom has until October 12 to sign the bills into law.
The move comes as Americans grapple wiht rising energy bills alongside broader cost of living increases. According to data from Canary Media, electricity prices are on the rise. In response, at least 18 states have considered legislation in recent years to prevent monopoly utilities from passing on costs associated with political activities, lobbying, trade associations, and other corporate expenses to customers.
Several states have already enacted similar reforms.In 2023, Colorado, Connecticut, and Maine passed broad utility accountability laws with provisions mirroring California’s efforts.Maryland followed earlier this year with the Next Generation Energy Act, prohibiting charges for trade association memberships and private plane expenses. New York enacted a similar ban on ratepayer-funded membership dues in 2021, and New Hampshire excluded lobbying and political costs from rates in 2019.
These laws are already yielding tangible results. Colorado’s Public Utilities Commission recently ordered Xcel Energy to remove over $775,000 in previously sought expenses from customer rates. A review by the Energy and Policy institute (EPI) of disclosures in Connecticut revealed that utility companies had at least $9.7 million excluded from customer rates due to the 2023 law.
