Politics
Anger builds over sweeping change in the way most Californians will pay for electricity
With little debate two years ago, state lawmakers passed a complex energy bill that enabled a sweeping change in how most Californians are billed for electricity.
The legislation was what Pacific Gas & Electric had asked for from the state public utilities commission three months before: a transformation of electric rates so that households would pay a fixed charge each month in exchange for lower rates for each kilowatt hour they used.
Gov. Gavin Newsom submitted the bill as part of a massive 2022 budget revision. In four days, it was passed out of an Assembly committee hearing without discussion, approved by the full Assembly and Senate and signed by Newsom.
The state’s three largest investor-owned power companies that pushed for the change say it will encourage Californians to ditch cars and appliances that run on planet-warming fossil fuels and replace them with vehicles, stoves and heaters that operate on electricity from solar panels and wind turbines. They also say the new monthly fee would allow them to more evenly allocate fixed costs among customers.
But opponents say the legislation was a financial gift to PG&E, Southern California Edison and San Diego Gas & Electric, and will cause millions of Californians who live in small homes or apartments that use little electricity to pay more, while residents in large homes that use a lot of electricity will save money.
“If you wanted to design a policy that would send the signal that conservation doesn’t count, this would be it,” said Ken Cook, president of the Environmental Working Group.
Now, as governor-appointed members of the California Public Utilities Commission prepare to approve a $24 monthly charge at a May 9 meeting, some lawmakers who voted for the original legislation are trying to reverse it. A coalition of more than 250 environmental and community groups are also protesting the law, claiming that its approval smacks of an all too cozy relationship between utility companies, regulators and think tank researchers.
Opponents complain that the new law eliminates a $10 cap on fixed charges that had been in place since 2013, and that there is now nothing to prevent the utilities from raising it higher and higher.
“There is a trend nationwide of utilities trying to move more of the payments they extract from ratepayers into fixed fees because they get that money no matter what,” said Cook. “This is easy money.”
Terrie Prosper, the CPUC’s director of strategic communications, said in a statement that the new rate structure “makes going electric more affordable for everyone, regardless of income, geography, or the size of their home.”
Someone who powers all their home appliances and their vehicle with electricity would save an average of $28 to $44 a month compared to the current billing structure, the commission estimates. (The law does not apply to the Los Angeles Department of Water and Power or other municipal utilities.)
Prosper said customers would still be encouraged to conserve electricity in the evening hours when the grid is most stressed because the rate per kilowatt hour would be higher. This is similar to how current rates vary by the time of day, she said.
“The flat-rate design will not increase utility revenues,” Prosper said. “The flat rate is not a new fee — it simply reallocates how electricity costs are paid for on bills.”
Alex Stack, a spokesperson for Newsom, said that before the bill’s passage, the idea of the fixed fees had been repeatedly discussed at public meetings and budget hearings “as a potential solution for managing rising electric bills.”
Stack did not answer a question of whether Newsom proposed the bill at the utilities’ request.
And Prosper did not explain why the Newsom administration had introduced the fixed-fee language in a bill just days before the governor had to sign the budget and related legislation.
Already California has the nation’s second-highest electricity rates. Only rates in Hawaii are higher.
Michael Backstrom, SoCal Edison’s vice president of regulatory affairs, said the new fixed charge would ensure “everyone using the grid is paying for its operation and upkeep.”
“There is no additional cost being collected,” he said. “There’s no change to utility profits.”
PG&E and SDGE executives did not respond to several phone calls and emails seeking comment.
The inspiration for the new law came from a 2021 paper written by professors at UC Berkeley’s Energy Institute at Haas, which is partly funded by utility companies.
The paper detailed how costs for building renewable energy plants, burying power lines to reduce the risk of wildfire ignitions and compensating fire victims have pushed electric rates so high that they were discouraging Californians from buying electric cars and replacing their gas appliances.
The paper also said the rising number of homes with solar panels meant that fewer households were paying for these fast-rising expenses that go into calculating the rate per kilowatt hour charged by utilities.
The professors proposed that the rate per kilowatt hour be reduced while a new fixed charge be added to bills.
Fixed fees are considered to be regressive, since they are harder for lower-income people to pay than the wealthy. For this reason the professors proposed a fixed charge that was progressive and rose according to income.
Since 2018, Berkeley’s Energy Institute at Haas has received $205,000 from PG&E, $160,000 from Edison and $50,000 from SDGE, according to the institute.
The Solar Rights Alliance — a nonprofit that advocates on behalf of homeowners and businesses that use solar power — said the institute’s work of advising the government while receiving money from the utilities “suggests a serious conflict of interest.”
Severin Borenstein, an economics professor who was the lead author, said no organization is allowed to give more than 2% of the institute’s budget. And he said the electric companies had no influence on the 2021 paper.
“We are not doing the bidding of any of these people,” he said.
The utility companies liked the paper’s recommendations. In a March 2022 filing, PG&E argued for “swift adoption” of a fixed charge similar to what the professors had proposed.The company said legislation was needed “to either raise or ideally eliminate” the $10 cap.
Two months later, on May 13, 2022, Newsom released a 175-page revision to his proposed budget. In a paragraph on Page 63, he said he was proposing legislation “to adjust electricity rates to predetermined fixed charges.” That change, he said, would “enhance widespread electrification efforts.”
The state’s legislative tracking system shows the proposed language to do that first appeared on June 26, 2022. That’s when a measure, Assembly Bill 205, was amended to add pages of proposed energy legislation. Part of the bill allowed the state to buy power from the aging Diablo Canyon nuclear plant and to approve solar and wind farms over the objections of local governments.
It also contained language that eliminated the $10 cap and ordered the utilities commission to establish a fixed charge on an “income-graduated basis.”
AB 205 was what is known in Sacramento as a trailer bill to the state budget. The trailer bills are meant to enact law changes required by the governor’s proposed budget. But politicians have sometimes misused them to get complicated or controversial legislation passed with little public notice.
Lawmakers’ use of the trailer bills surged after voters passed Proposition 25, pushed through by Democrats and public employee unions in 2010, which said the budget and any related legislation would need just a majority vote, rather than two-thirds. Democrats now dominate the state’s legislature.
When AB 205 was introduced, a Democratic lawmaker called it “a crappy trailer bill that was dumped on us on late Sunday night.”
The next day, AB 205 and 28 other trailer bills addressing issues ranging from cannabis regulation to reproductive rights, were presented at a hearing of the Assembly Budget Committee.
According to a transcript, the committee’s leaders limited public discussion to one hour. The fixed electric charge was not mentioned.
“Unfortunately, having this one hearing for one hour mere hours after budget bills materialized is certainly not adequate,” said Assemblymember Vince Fong, a Bakersfield Republican, at the hearing.
The full Assembly and Senate passed the bill two days later. Newsom signed it the next day.
Last year, the three electric companies said that in accordance with AB 205 they were proposing fees as high as $128 a month for households with incomes over $180,000. Those earning $69,000 to $180,000 would pay a fixed monthly fee of as much as $73. Those making less than $69,000 would pay $15 to $34, depending on which company supplied their power.
The three companies said they would seek to increase the fixed charge if there was a “revenue imbalance” of 10%. Such an imbalance might occur if estimates of how much they would collect in fixed charges did not cover what they were losing in the lowered rates per kilowatt hour.
The companies’ proposal outraged some legislators.
A letter to the commission from 18 Democratic members of Congress pointed out that the average electricity consumption of each California resident had stayed nearly flat since the 1970s because of energy efficiency efforts.
“Imposing a high fixed charge may undercut these decades of progress by forcing people to pay their utility company before they even turn on the light switch,” the California representatives wrote.
In January, Assemblymember Jacqui Irwin, Democrat from Thousand Oaks, proposed a bill named AB 1999 to reverse much of what Newsom’s bill had done.
With criticism growing in late March, the commission said it was proposing a more modest monthly fixed charge of $24.15. Lower-income people would pay either $6 or $12 a month based on their circumstances.
But the commission’s proposal did not stop the complaints from households across the state or the coalition opposed to the new rate structure.
In an analysis conducted for the coalition, Josh Plaisted of Flagstaff Research estimated that households using more than 6,000 kilowatt hours a year would save more as they increased their electricity use. For example, a 2,500-square-foot home with a swimming pool might save more than $300 a year, he said.
“I think this is a surprise to most people,” Plaisted said. “You have low energy users subsidizing current high energy usage.”
The opposition was angered even more when Speaker Robert Rivas (D-Hollister) and other Assembly leaders stopped debate on Irwin’s bill late last month with a procedural move that shelved it for the legislative session.
Cynthia Moreno, the speaker’s press secretary, disputed claims that the Assembly leaders had killed the bill.
“We are continuing work on the issue this year, including possible amendments to ensure any changes in the fixed charge are revenue neutral for utilities and not a means to increase their profits,” she said.
Moreno said that Rivas appreciated the “legislative scrutiny of the PUC and the governor’s plan, and that oversight will continue.”
Gov. Gavin Newsom has signed off on a 100% state tax on money any Californians receive from Trump’s $1.8-billion “anti-weaponization” fund for his political allies.
Newsom unveiled his proposal in May, after Trump’s Justice Department said it would create a fund to compensate Trump’s allies who claim they have “suffered weaponization and lawfare” under Biden’s Justice Department.
The settlement fund was criticized by politicians on both sides of the aisle, including Sen. Mitch McConnell (R-Ky.), who described it as a “slush fund to pay people who assault cops.”
The fund remains in legal limbo. Earlier this month, a federal judge in Virginia extended a court-ordered block on the plan, which critics warned could be used to pay pardoned Jan. 6 rioters.
Fast-tracked into law as part of Senate Bill 122, Newsom’s plan imposes “a tax on any settlement fund payment from the federal Anti-Weaponization Fund, or any subsequent fund, settlement, or agreement, as provided, at a rate of 100%,” according to the bill text. The tax applies to all tax years between 2026 and 2030.
Newsom signed the bill Tuesday. In a statement, his office said the tax is meant to ensure that, should Trump’s fund proceed, California recipients won’t “receive favorable state treatment on those payments.”
“We believe democracy is worth defending, the rule of law matters, and public dollars should support victims—not those who attacked the very institutions that protect our freedoms,” Newsom said in the statement.
University of Southern California law professor Ariel Jurow Kleiman, an expert on tax law and policy, said that while Newsom’s tax is a “novel legal strategy,” she believes there is “no categorical legal restriction” preventing California from implementing it.
States have a “wide degree of discretion” to design their tax systems — including how they define income — so long as they do not violate their constitutions, Jurow Kleiman said.
If a California resident wanted to challenge the tax in court, they would need to show they were harmed by it to have standing to sue, according to Jurow Kleiman. That would mean receiving a payment from Trump’s settlement fund and then paying the 100% California tax. Unless the settlement fund is established and distributes payments, that scenario is unlikely.
While there have been proposals to levy a 100% tax on income above certain thresholds — Sen. Bernie Sanders (I-Vt.) in 2023 said he supports a 100% tax on income exceeding $1 billion — Jurow Kleiman said she is not aware of any governments that have adopted such a policy.
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The House has officially shipped a colossal bipartisan housing package to President Donald Trump, and lawmakers are hoping that, at the very least, he doesn’t veto it.
Trump was supposed to sign the 21st Century ROAD to Housing Act last week, but his last-minute decision to ghost the signing ceremony with House Speaker Mike Johnson, R-La., and Senate Majority Leader John Thune, R-S.D., put into question whether the bill was dead.
His refusal to sign the bill, which passed with overwhelmingly bipartisan support in both chambers, was to leverage the Safeguarding American Voter Eligibility (SAVE) America Act, which doesn’t currently have the votes to succeed in the Senate.
WARREN TELLS TRUMP TO ‘SIGN THE DAMN BILL’ AS BIPARTISAN HOUSING PACKAGE REMAINS STALLED IN WASHINGTON
Trump has refused to sign the 21st Century ROAD to Housing Act. (Shawn Thew/EPA/Bloomberg via Getty Images)
Trump appears to be in no hurry to sign the bill, despite Republicans who are hungry for a win in the affordability fight ahead of the midterm elections.
“It’s so unimportant … compared to the SAVE America Act,” Trump told reporters in the Oval Office on Monday. “I think the SAVE America Act is exactly what it says. It’s saving America from crooked elections.”
“Here’s what I would like to sign, much more than a bill that — big deal, it’s a yawn,” he continued. “Some people say it’s wonderful. To me, compared to the SAVE America Act, just about everything is a big yawn.”
GOP INFIGHTING OVER TRUMP’S VOTER ID BILL ERUPTS AS TOP SENATOR CALLS STRATEGY ‘FANTASY’
It’s legislation that is loaded with nearly 60 provisions from both sides of the aisle in both chambers that’s designed to make it easier for homes to be built and for younger Americans to buy their first home. It also includes a ban on hedge funds buying up housing stock that Trump pushed Congress to include during the State of the Union earlier this year.
Sen. Elizabeth Warren, D-Mass., one of the architects behind the bill in the upper chamber alongside Sen. Tim Scott, R-S.C., charged that Congress handed the bill to Trump “on a silver platter.”
“When you ask me what happens next, if he cared about the American people, he’d have already signed the damned thing, and we’d be underway,” Warren said on WCVB’s “On the Record” on Sunday.
But Trump doesn’t have to put his signature on the bill for it to become law.
IRATE REPUBLICANS ACCUSE TRUMP OF HANDING DEMOCRATS A WIN AFTER BLOWING UP HOUSING PACKAGE
The Senate advanced a massive, Trump-backed housing package geared toward lowering the costs of homes and supercharging the housing supply. Sen. Elizabeth Warren, D-Mass., pitched it as legislation to prevent America from becoming a “nation of renters.” (Jemal Countess/Getty Images for Protect Borrowers; Anna Moneymaker/Getty Images)
The Constitution grants presidents the ability to veto a bill within 10 days of it being transferred over to the White House. In that scenario, Congress could override a veto of the housing package.
It’s happened before under the Trump administration. In early 2021, Congress overrode Trump’s veto of the annual National Defense Authorization Act — a massive Pentagon funding authorization package that some House Republicans are trying to use as a vehicle to pass the SAVE America Act.
But during that 10-day period, if Trump doesn’t sign the bill, it would automatically become law. That’s unless Congress completely adjourns, in which case a “pocket veto” could happen. The Senate is currently in recess and the House is scheduled to leave town by week’s end, but neither count as a full adjournment.
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Johnson, who spent the last few days meeting with Trump at the White House about the housing bill and the SAVE America Act, said: “I hope he does sign it.”
“If he doesn’t, it’s still law,” Johnson said. “We’ll still celebrate it, but he’s trying to make a point, and I think he’s making it very effectively. And the fact that you all ask me every three steps down the hallway illustrates that he has achieved the desired objective, and that is to make SAVE America the number one thing, because if we don’t get that right, everybody’s concerned about what happens next.”
Britain’s culture minister may challenge Paramount Skydance’s takeover of Warner Bros. Discovery — presenting a potential speed-bump to David Ellison’s plan to wrap up his $111-billion deal by September.
Earlier this month, Paramount secured the U.S. Justice Department’s blessing to buy the Warner assets, which include CNN, HBO, Cartoon Network, Animal Planet and the Warner Bros. film and TV studios in Burbank.
Paramount also must win the approval of British and European regulators, who are known for drilling deeply into media matters because of their influence on society.
Britain’s Competition and Markets Authority took a preliminary step this month by opening an investigation into Ellison’s proposed merger.
On Tuesday, Lisa Nandy, Britain’s Secretary of State for Culture, Media and Sport, notified Parliament that she was inclined to intervene in the blockbuster deal.
In a written statement, Nandy cited her ability to weigh in on “public interest grounds,” due to concerns about maintaining a competitive media market in Britain.
“The UK’s move to intervene in the Paramount–WBD deal confirms what we’ve been saying for months. The real regulatory risk was never in the US — it’s in Europe,” Forrester VP Research Director Mike Proulx said Tuesday in a statement.
While Nandy cautioned she has not made “a final decision on intervention at this stage,” she has invited Paramount and Warner Bros. to respond to her concerns by July 6.
June 2026 photo of Culture, Media and Sport Secretary Lisa Nandy arriving at Downing Street for the weekly Government cabinet meeting in London.
(Alishia Abodunde/Getty Images)
Paramount did not offer immediate comment.
The company owns CBS News, children’s channel Nickelodeon and Channel 5, one of the largest over-the-air television broadcasters in the United Kingdom.
Warner Bros. Discovery owns CNN, Cartoon Network and TNT Sports, which broadcasts the Olympics, Champions League and Premier League soccer matches.
“I am conscious that the proposed acquisition is global in nature,” Nandy wrote in her statement. “In reaching this decision, my focus has been, and will remain, on the UK public interest and the range of services available to UK audiences, including Channel 5, TNT Sports, Cartoon Network, Nickelodeon, and CNN International, as well as Paramount+ and HBO Max.”
If Nandy decides to intervene, the Office of Communications, known as Ofcom, would launch an assessment of the deal. Britain’s Competition and Markets Authority also would determine how the merger might reshape the competitive landscape.
Teams from the two companies have been huddling for months to plan for the melding of the two operations as soon as Paramount receives all of its regulatory approvals.
Australia, New Zealand, China, Saudi Arabia, Ukraine, Serbia, France and Italy have already given their approvals to the deal.
Saudi Arabia’s Public Investment Fund is planning to contribute $10 billion to help the billionaire Ellison family pull off the merger, which would make the Saudi royal family a significant, although passive, equity owner. In addition, the royal families of Qatar and Abu Dhabi have agreed to each contribute $7 billion in equity financing.
The Federal Communications Commission must evaluate the foreign ownership stakes due to Paramount’s holding of CBS broadcast licenses. U.S. antitrust regulators already have concluded the combination would not violate federal anticompetition laws.
Approval had been expected because President Trump — who has friendly ties with Ellison and his father, tech billionaire Larry Ellison — favors the deal.
Trump has been eager for changes at CNN.
The U.S. government stopped short of asking Paramount to make concessions or divestitures. Many expect that Paramount may have to reconfigure its children’s television holdings abroad due to the proposed combination of two large players — Nickelodeon and Cartoon Network.
Nandy suggested that Britain also should scrutinize the impact of combining two major streaming services HBO Max, a Warner property, with Paramount+.
HBO programming, including “Game of Thrones,” “Boardwalk Empire,” and “Succession,” has long been popular in Britain.
A coalition of state attorneys general, led by California Atty. Gen. Rob Bonta, also is expected to challenge the deal, in part, due to concerns about news media consolidation. Bonta’s office has said the matter remains under review.
Opposition to the deal has been building in the U.S. for months. A group of Hollywood activists — led by actors Jane Fonda and Mark Ruffalo — have spearheaded a “block the merger” campaign that now has support from more than 5,000 entertainment workers.
The group’s open letter calls on Bonta to take action to thwart the Ellison expansion effort. Paramount’s Chief Legal Officer Makan Delrahim has blasted the campaign, calling it “fear-mongering” and a partisan distortion of antitrust law.
Forrester’s Proulx noted differences in attitudes toward the deal among the various constituencies.
“For US consumers, this merger has become a proxy fight about political influence and control of media,” Proulx said. “In the UK, it’s being treated as a structural competition issue where regulators, not consumers, will decide how this deal plays out and how long it takes.”
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