Governor Newsom Weighs in on California Electricity Affordability Crisis

Governor Gavin Newsom signed Executive Order N-5-24 on October 30 to address California's "affordability crisis" with respect to electricity rates. From Newsom's press release: "We're taking action to address rising electricity costs and save consumers money on their bills. California is proving that we can address affordability concerns as we continue our world-leading efforts to combat the climate crisis." The Executive Order identifies wildfire mitigation measures as one of the primary reasons for the increasing costs and asks various state agencies to examine whether their programs are cost effective.

Specifically, the governor's executive order asks the California Public Utilities Commission (CPUC) to identify underperforming programs and return any unused energy program funds to customers receiving electric and gas service from private utilities as one or more credits on their bills. The CPUC is also asked to evaluate whether the rules and orders it has promulgated may be unduly adding to electric rates or whose funding might more appropriately come from a source other than ratepayers. The CPUC is requested to pursue, and to direct the regulated utilities to pursue, all federal funding opportunities that can help reduce and avoid electric service costs that would otherwise flow into electric rates.

Similarly, the Executive Order directs the California Energy Commission (CEC) to identify underperforming programs and whether any unused funds can be returned to ratepayers. 

The Executive Order directs the California Air Resources Board (CARB) to work with the CPUC to determine ways to maximize the California Climate Credit, which is a twice annual credit that shows up on many Californians' electric and gas bills in the spring and fall and is funded by the state's Cap-and-Trade program.

The executive order directs the Office of Energy Infrastructure Safety (OEIS) and requests the CPUC to evaluate utility wildfire safety oversight practices and ensure that utility investments and activities are focused on cost-effective wildfire mitigation measures. 

Overhauling regulatory programs takes time. Whether this Executive Order amounts to anything more than political posturing remains an open question.