Last week, Governor Newsom vetoed three common-sense bills to advance affordable, clean energy. That included AB 740 (Harabedian), a low-cost, non-controversial bill co-sponsored by The Climate Center that passed the state legislature with overwhelming bipartisan support. AB 740 and two other bills that were vetoed (AB 44 and SB 541) aimed to expand the state’s use of local, clean energy resources, including rooftop solar, electric vehicle and stationary batteries, smart thermostats, and smart heat pumps.
As we wrote to the governor in August, AB 740 would have made electricity more affordable in California by requiring the state to adopt a virtual power plant (VPP) deployment plan. VPPs are networks of existing local, clean energy resources across thousands of homes that, when aggregated, have the potential to cut $13.7 billion in costs through 2030 in California alone, saving you money on your electricity bill. VPPs could also generate more than 7,500 megawatts of capacity — enough to power at least 1.5 million homes!
Corporate utilities have been maximizing their record profits through expensive energy infrastructure upgrades and passing those costs onto customers like you and me through relentless rate hikes. VPPs and other distributed, clean energy solutions reduce the need for those upgrades, saving electricity customers money but cutting into utility profits. For that reason, utilities like PG&E have obstructed the deployment of clean, locally-controlled electricity solutions for years. And they’ve been very successful at influencing the governor and the California Public Utilities Commission.
Follow the money and it’s quite obvious what’s going on. Between 2000 and 2024, California’s investor-owned utilities made nearly $220 million in campaign contributions to political candidates at every level of government. More than $15 million of that went to sitting members of the state legislature and $2.6 million went to Governor Newsom. PG&E is the largest spender, having tripled the amount it spends on political donations in the last five years.
Performance-based regulation (PBR) is an alternative compensation approach that can help Californians get relief from utility greed. PBR policies shift utilities’ incentives away from just building infrastructure to minimizing costs and advancing critical clean air and climate goals. Connecticut and Hawaii are experimenting with PBR, tying utility profits to performance.
Learn more about PBR in this recent paper from The Climate Center, Reducing Consumer Costs in California. And stay tuned for more ways you can help ensure that California’s policymakers embrace clean, locally-controlled energy to lower your electricity bills and help secure a climate-safe future for all!
This blog first appeared in The Climate Center’s bi-weekly newsletter. To keep up with the latest climate news and ways to take action for a climate-safe future, subscribe today!
