California Utility Customers to Receive $137 Credits Amid Rate Increases

SACRAMENTO, Calif. — Pacific Gas and Electric Co. customers are among millions of Californians set to receive average credits of $137 on their upcoming utility bills, as announced by Gov. Gavin Newsom on Tuesday. This initiative is part of the state’s California Climate Credit program, designed to provide financial relief for rising energy costs.

The California Climate Credit is automatically applied to eligible customers’ bills every April and October. This year, the initiative falls amid a backdrop of significant rate increases approved for PG&E, which has faced criticism for its sizable profit margins amidst climbing electricity costs. State regulators allowed six rate increases in 2024, coinciding with PG&E reporting nearly $2.5 billion in profits.

The Cap-and-Trade program, which governs the emissions of greenhouse gases, funds the California Climate Credit. Under this program, entities purchase greenhouse allowances and credits with a decreasing cap over time. Revenues generated contribute to various environmental projects.

Aside from PG&E, customers of San Diego Gas and Electric, Southern California Gas Company, and Southwest Gas also qualify for the credits. In total, the state anticipates distributing $2.4 billion in credits this April, with $1.4 billion allocated for electric customers and $1 billion for natural gas customers. Additionally, $122 million is earmarked for small businesses.

The range of credits will vary, offering amounts between $35 to $259 for electricity bills and $54 to $87 for natural gas bills. Utility customers can verify their specific credit amounts through the state’s resources.

The California Air Resources Board oversees the Cap-and-Trade program, which has distributed $10.9 billion in credits to customers since 2014—equating to an average of $1,120 per household. Furthermore, the program has financed $28 billion in climate-related investments, resulting in over half a million projects and the creation of approximately 30,000 jobs. According to Newsom’s office, the Cap-and-Trade program has successfully reduced millions of tons of carbon emissions.

As state lawmakers continue discussions surrounding the rising electricity costs, the question of whether to shift some financial burdens to shareholders instead of ratepayers remains at the forefront. During a recent hearing, Alice Reynolds, president of the California Public Utilities Commission, faced scrutiny regarding the ongoing rate hikes and their impact on consumers.

Reynolds acknowledged the concerns but maintained that the CPUC’s decisions aimed to ensure adequate utility work and infrastructure. However, some lawmakers expressed frustration, emphasizing that ratepayers should not bear the brunt of expenses tied to utility profits.

The hearing and the Governor’s announcement come as California continues to grapple with some of the highest electricity rates in the nation, a situation underscored by the already significant increases approved in prior years.