Bill regulating spending by California utility companies awaits Newsom's signature

Utility companies couldn't use ratepayers’ money to pay for lobbying against the efforts of cities and counties throughout California to “municipalize” energy services, under a bill passed earlier this year in Sacramento.

Senate Bill 327 is awaiting Gov. Gavin Newsom's signature. If signed, the law would take effect Jan. 1.

The legislation keeps electrical and gas companies from increasing utility rates to compensate the company for lobbying against the localization of electrical and gas service, according to a legislative analysis.

The bill also gives the Public Advocate’s Office, a state agency, the same powers the California Public Utilities Commission has to review the accounts of utility companies.

“They have had a habit of using ratepayers’ own money to fight the ratepayers when they decide they want to form municipal utility companies, which in my mind, is a travesty,” Sen. Jerry McNerney, D-Stockton, told The Center Square on Thursday afternoon.

“It’s not acceptable," said McNerney, who co-introduced the bill with state Sen. Aisha Wahab, D-Fremont, who is leaving the Legislature and going to Washington, D.C., to finish the term of former U.S. Rep. Eric Swalwell, D-San Francisco Bay Area.

"If cities want to form munis, then utility companies can use stockholders’ money or investors’ money - not the ratepayers’ money - to do that," McNerney said.

In McNerney’s legislative district, the South San Joaquin Irrigation District has been trying to form a municipal utility service provider in the area for close to a decade.

“They just keep running into roadblocks,” McNerney said.

McNerney’s bill is one of several introduced this year in California that made issues caused by investor-owned utility companies a priority.

A bill by Sen. Scott Wiener, D-San Francisco, would have allowed cities to withdraw from utility service by Pacific Gas & Electric, although that bill ultimately did not pass a committee hearing in April. Former Assemblymember James Gallagher, R-Sutter County and now a U.S. representative in Congress, introduced a bill before leaving the California Legislature in June that would provide monetary relief for wildfire victims who lost their homes in utility-caused wildfires. That bill passed the legislature this year and is waiting for the governor’s signature.

After an investigation, the Los Angeles County Fire Department and the California Department of Forestry and Fire Protection said the devastating Eaton Fire in the Pasadena-Altadena area started at utility company Southern California Edison's transmission tower above Eaton Canyon Wash.

Pacific Gas & Electric, one of the largest utility companies in the state, did not respond to The Center Square before press time.

San Diego Gas & Electric and Southern California Gas, in a joint comment submitted in opposition to the bill earlier this year, said that the expansion of powers available to the Public Advocate’s Office runs afoul of current law, among other concerns.

“In addition, SB 327 is internally inconsistent with respect to its definition of political influence activity and how it treats costs associated with municipalization,” both companies said in opposition to the bill. “This expansion is unnecessary, as the [Public Advocate’s Office] already has full access to ratepayer-funded accounts and data needed to assess ratepayer impacts. Thus, this change in law would not lower rates for utility customers – the purported purpose of this statute.”