I’m launching this newsletter at an intriguing moment in California politics. Democratic Gov. Gavin Newsom — who everyone knows is eyeing a run for the White House — has one last chance to show his true colors on energy and climate change. Rising electricity costs are a major issue in California, and Newsom must decide by the end of this month whether to sign a host of bills that could help cut utility rates while also advancing the state’s clean energy transition. What message does he want to send to Californians and the rest of the country?
Earlier this week, I published an assessment of Newsom’s legacy on climate and clean energy so far. Long story short: While he can legitimately brag about some things, he hasn’t been willing to take on utility interests or to challenge the status quo. That’s especially apparent in how he’s sidelined virtual power plants, vetoing and defunding efforts to harness them to rein in skyrocketing electricity rates for customers of the state’s three major utilities.
But a few bills on his desk now could at least start the long slog of reforms that experts say will help make power more affordable.
Most notable is Senate Bill 905. This year’s big affordability reform package from state Sen. Josh Becker (D) would curb utilities’ profits on wildfire-prevention investments and other spending that reduces their risk exposure. It would also expand on provisions from Becker’s reform bill passed last year that require utilities to finance more grid costs through borrowing, which also helps contain the profits they get to collect from customers.
In addition, SB 905 would encourage utilities to measure how efficiently they’re using their existing grids — a precursor to setting up regulations that could steer them toward prioritizing lower-cost solutions over expensive grid upgrades.
One such solution is tapping into virtual power plants — the customer-owned batteries, EV chargers, smart thermostats, and other devices that can provide hundreds of megawatts of power to the grid. Becker’s SB 913 would create new pathways for VPPs to help lessen reliance on aging fossil-gas-fired peaker plants.
But California’s politically powerful investor-owned utilities have vigorously opposed policies that could reduce their regulated profits. That may be why the Newsom administration has largely taken an alternative tack to save money: slashing public services paid for through utility rates. For example, Newsom backed a 2024 bill that would have cut hundreds of millions of dollars in energy-efficiency and solar programs to instead give customers a small one-time rebate.
What else I’m watching
Meanwhile, I’m tracking a few other climate bills awaiting Newsom’s signature or veto:
