Berman and McNerney Announce Joint Effort to Protect CA Ratepayers from Utilities’ Abuses

California state Sen. Jerry McNerney (D-Pleasanton) and Asm. Marc Berman (D-Menlo Park) announced a joint legislative package today to protect California ratepayers from unlawful activities by investor-owned utilities.

Sen. McNerney’s SB 24 and Asm. Berman’s AB 1167 will work in tandem to strengthen state law to further prevent IOUs, like SoCalGas, PG&E, and others, from using ratepayer funds to pay for lobbying, political campaigns, and promotional advertising. 

The legislative package would also bar IOUs from using ratepayers dollars to lobby against local efforts to create a municipal utility and would expand the investigative oversight of IOUs’ actions.

“Californians are suffering from unprecedented hikes in their utility bills over the last few years, all while those same utilities are raking in record profits,” Asm. Berman said. “Enough is enough. I am proud to work with Senator McNerney to establish common sense guardrails that ensure that hardworking Californians are not footing the bill for their utilities’ political endeavors.”

“As utility bills soar and IOUs pocket billions in record profits, it’s unconscionable that those same utilities would use their customers’ money to finance expensive lobbying and political campaigns,” said Sen. McNerney. “So, I’m proud to partner with Assemblymember Berman to hold utilities accountable and to stop them from wasting ratepayer dollars on lobbying and political campaigns that should be paid by shareholders.”

Sen. McNerney is a principal co-author of Asm. Berman’s AB 1167 and Asm. Berman is a principal co-author of Sen. McNerney’s SB 24. Both bills are scheduled to be voted on this week on the Senate and Assembly floors. AB 1167 is co-sponsored by The Utility Reform Network (TURN) and Earthjustice. TURN is also sponsoring SB 24.

“We need commonsense guardrails to keep for-profit utilities from slipping pricey lobbying and advertising costs into Californians’ monthly energy bills,” said Matt Vespa, senior attorney with Earthjustice’s Right To Zero Campaign. “Assemblymember Berman and Senator McNerney are offering clear-eyed leadership in authoring AB 1167 and SB 24, and we hope to see legislators rally around these solutions for Californians at a time of spiking energy costs. It’s time to take politics out of our power bills — and in doing so, follow the lead of states like Colorado, Maine, and Connecticut.”

“AB 1167 and SB 24 provide the transparency and penalties needed to stop PG&E, SoCal Edison, SDG&E and SoCal Gas from spending customer money on promotional advertising, lobbying against climate goals, and working against local communities that want to join a municipal utility with lower rates. California residents are facing an unprecedented affordability crisis, and AB 1167 and SB 24 go a long way to holding for-profit utility companies accountable to spending ratepayer money to benefit customers, not to fill shareholder pockets,” said TURN Executive Director Mark Toney.

Current state law bars IOUs from using ratepayer dollars for lobbying, political campaigns, and promotional advertising, and instead directs IOUs to use shareholder funds for such activities. But current law includes loopholes and lax enforcement, enabling IOUs to blur the lines between ratepayer and shareholder spending.

Recent investigations have revealed that IOUs have been using ratepayer funds — dollars that should be used to keep the lights on — on expensive lobbying and political campaigns, and on costly promotional advertising. At the same time, California now has the second-highest utility rates in the nation and almost double those of the rest of the country.

AB 1167 would close loopholes and strengthen enforcement of existing law by mandating fines against IOUs that illegally use ratepayer funds for: 

• Lobbying, political campaign contributions, and promotional advertising
• Litigation regarding existing or proposed regulations
• Fines or penalties issued against a utility
• Board member travel, food, and insurance.

The above would not to apply to IOU workers represented by labor organizations.

SB 24 would explicitly ban the use of ratepayer funds on lobbying or other political activities against efforts by cities and counties to create their own municipal utilities. SB 24 would also empower the Public Advocate’s Office of the Public Utilities Commission with full investigatory authority over IOUs’ activities in order to protect consumers from utilities’ abuses.

Sen. Jerry McNerney is chair of the Senate Revenue and Taxation Committee and his 5th Senate District includes all of San Joaquin County and Alameda County’s Tri-Valley.

Asm. Marc Berman is chair of the Assembly Business and Professions Committee and his 23rd Assembly District includes southern San Mateo County and northern Santa Clara County.