Calif. Gov. Newsom issues executive order on rising electric bills -- but how much will it help?

Gov. Gavin Newsom issued an executive order Wednesday aimed at finding ways to reduce rising electricity bills that beleaguered customers pay each month — although the order did not offer specific dollar figures and timetables.

One of the major drivers of higher bills comes from spending by the state’s investor-owned utilities such as San Diego Gas & Electric on programs to reduce the risk of wildfires. SDG&E, for example, has spent about $5 billion in ratepayer money since the deadly Witch Creek, Guejito and Rice wildfires in 2007 that destroyed more than 1,300 homes, killed two people and injured 40 firefighters.

Newsom’s executive order calls for “smarter wildfire mitigation investments” by directing state regulators to evaluate utility oversight and ensure that spending is “focused on cost-effective” measures.

The order also:

—calls on the California Public Utilities Commission to identify underperforming programs and return any unused money to utility customers through credits on their bills

—asks the utilities commission review the costs of regulations of various programs, pursue federal funding options to help lower electric bills and directs the California Energy Commission to look at cost-saving measures, and

—instructs the California Air Resources Board to find ways to increase the California Climate Credit that utility customers receive two times each year.

SDG&E customers received their most recent climate credit earlier this month, seeing an automatic bill deduction of $78.22 in their October bill cycle. Funding comes from money generated by the state’s cap-and-trade program that requires power plants, natural gas providers and large industries that emit greenhouse gases to buy permits on the carbon pollution they produce.

California policymakers have set a goal to derive 100% of the state’s electricity from carbon-free sources by 2045, if not sooner. The costs associated with clean energy projects, such as battery storage projects aimed at reducing the use of natural gas power plants, are passed on to utility ratepayers.

“We’re taking action to address rising electricity costs and save consumers money on their bills,” Newsom said in a statement. “California is proving that we can address affordability concerns as we continue our world-leading efforts to combat the climate crisis.”

The Utility Reform Network, the San Francisco consumer group commonly known as TURN that often weighs in on utility issues, called Newsom’s executive order “an important first step to solving the affordability crisis” facing California ratepayers.

But TURN’s executive director Mark Toney said his group “looks forward to working with the governor’s staff on affordability strategies” that are not mentioned in the executive order, such as “setting limits on utility overspending” that Toney said could save customers billions of dollars.

SDG&E called the executive order “a great first step” and “we look forward to this process moving quickly.”

At the same time, SDG&E spokesperson Anthony Wagner said in an email, “we remain focused on reducing operational costs to help control the rise of electricity prices and stabilize bills while still delivering the exceptional service our customers expect.”

Earlier this month, the public utilities commission issued a proposed decision that would raise SDG&E rates by about 4% per year through 2027.

The proposal still needs to be approved by a majority of the five voting members of the commission, known as the CPUC for short. A vote is expected on Dec. 5.

Democrats in legislative leadership roles in Sacramento said Newsom’s executive order is needed.

“The state, including its regulatory agencies, needs to buckle down and blunt the expanding fiscal impacts on ratepayers,” Senate President pro tem Mike McGuire, D-North Coast, said in a statement. “This is an important start by Gov. Newsom and the Senate plans to double down on this progress in the months ahead.”

Senate Republicans were much less charitable, saying the governor “finally realizes electricity prices are a vulnerability for his political career.”

“While a better approach would be to cut expensive regulations immediately, Newsom is taking a small step in the right direction to review programs that are ‘underperforming’ and return that funding to ratepayers,” Senate Minority Leader Brian Jones, R-San Diego, said in an email. “I am cautiously optimistic that today’s executive order may be the needle moving in the right direction and bring much-needed relief to Californians.”

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