SB 24 would also bar utilities from turning off a resident’s power for nonpayment on days when the air quality in their area is “unhealthy for sensitive groups” or worse.
Press Release

Sen. McNerney Introduces Legislation to Protect CA Ratepayers from Utility Abuses

State Senator Jerry McNerney, D-Pleasanton, on Tuesday introduced SB 24, legislation to protect Californians against skyrocketing utility bills by safeguarding ratepayers from abuses by investor-owned electric and gas utilities.

SB 24 would close legal loopholes and strengthen state law to prevent investor-owned utilities (IOUs), like SoCalGas, PG&E, and others, from using ratepayer funds to pay for political lobbying and campaigns and political advertising. SB 24 would also bar IOUs from using ratepayers dollars to lobby against local efforts to create a municipal utility. In addition, the legislation would prohibit utilities from turning off residential service on days when outdoor air pollution is unhealthy for sensitive groups.

“Utility bills are soaring and California is becoming increasingly unaffordable as IOUs pocket billions in record profits. That’s particularly appalling when those same utilities are using their customers’ money to finance expensive lobbying and political campaigns and battle efforts by cities and counties to create their own municipal utilities,” said Sen. McNerney, who is a member of the Senate Energy, Utilities and Communications Committee. “SB 24 will stop utilities from wasting ratepayer funds on politics and lobbying activities that should be paid by their shareholders.”

“SB 24 will also ensure that utilities don’t shut off service from low-income Californians on days when going outside can be unhealthy.”

Last year, Pacific Gas and Electric Company (PG&E) raked in record profits of $2.47 billion, while Southern California Edison pocketed a record $1.69 billion. And Sempra Energy, which owns Southern California Gas (SoCalGas) and San Diego Gas and Electric (SDGE), posted $2.82 billion in net income.

Those billions in profits were fueled by six rate hikes last year that utilities said they needed to finance more transmission lines, additional energy sources, hardening against wildfires, and more. But those rate hikes mean that California now has the second-highest utility rates in the nation and almost double those of the rest of the country.

At the same time, 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.

Using ratepayer dollars on lobbying, political campaigns, and promotional advertising violates existing state law, which states that IOUs must use shareholder dollars for such activities. But California law includes loopholes and lax enforcement that have enabled IOUs to blur the lines between ratepayer and shareholder spending.

SB 24 is designed to close loopholes and strengthen state enforcement on bans of using 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 also 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.

Under SB 24, IOUs would be subject to daily fines of up to $10,000 per violation. The California Public Utilities Commission would also be authorized to order ratepayer refunds for any misuse of ratepayer funds by utilities.

Finally, SB 24 would also bar utilities from turning off a resident’s power for nonpayment on days when the air quality in their area is “unhealthy for sensitive groups” or worse. The legislation would also require utilities to reconnect power for residents on days when the air quality in their area is “unhealthy for sensitive groups” or worse.

 

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.