Bill Targeting Utility Profits and Lowering Electricity Costs Advances in Senate Committee

Sacramento, CA — With an overwhelming affirmative vote, the Senate Committee on Energy, Utilities, and Communications passed SB 905, authored by Senator Josh Becker (D-Menlo Park), which strengthens accountability for investor-owned utilities and controls rising electricity costs. SB 905 reduces costs of electricity bills, aligns executive compensation with utility costs, improves oversight, and identifies cost savings across California’s electric system, while maintaining reliable service and supporting the state’s clean energy transition.

“Californians are paying more for electricity every year, while utilities are making record profits. We need to make sure our policies are driving efficiency, transparency, and accountability in how those dollars are spent,” said Senator Becker. “This bill focuses on controlling costs, strengthening oversight, and making sure utilities are rewarded for delivering results rather than just spending more of our money.”

Specifically, SB 905 includes six major provisions to rein in the cost of electricity bills: 

  1. Aligning Executive Compensation with Cost Control

The bill requires investor-owned utilities (IOUs) to link a portion of executive compensation to keeping electricity rates from rising faster than inflation over a rolling three-year period. By linking compensation to rates, the measure encourages leadership decisions that prioritize cost discipline and responsible system management.

  1. Reducing Excess Utility Returns on Lower-Risk Investments

The bill directs regulators to consider lower authorized returns for certain categories of investments that reduce risk for utility shareholders. For example, undergrounding power lines can significantly reduce wildfire liability exposure for utilities while also improving system safety for customers. Because these investments benefit shareholders, they should require a lower

  1. Strengthening Performance Accountability

The bill directs the Public Utilities Commission (PUC) to establish clear performance metrics for utilities, including reliability, system utilization, greenhouse gas reductions, and the speed of connecting new customers and clean energy resources. This will make clear what our expectations are for good performance and hold utilities accountable for delivering safe, reliable, clean, and affordable power.

  1. Maximizing Use of Existing Grid Infrastructure

The bill requires new reporting on how effectively utilities are using existing grid capacity, particularly during off-peak periods. Improving utilization of infrastructure that ratepayers have already funded can reduce the need for expensive new investments.

 

  1. Reducing Pressure on Electricity Bills

The bill builds on previous work to create a Policy-Oriented and Wildfire Electric Reimbursement (POWER) Fund to allow certain public purpose programs and wildfire-related costs to be funded through sources other than electricity bills, helping shift some costs away from ratepayers.

  1. Exploring Lower-Cost Financing Options

The bill directs the PUC to evaluate alternative financing approaches for electric infrastructure investments, including options that could reduce borrowing costs and lower long-term costs for customers.

SB 905 is part of the California Electricity Affordability Pathway, which is a package of legislation aimed at lowering electricity bills for Californians by holding utilities more accountable for rate increases, enabling smarter grid planning, expanding energy storage, and continuing investments in proven demand-side reliability tools.

“As California continues its transition to a cleaner energy system, SB 905 is about getting more value out of the infrastructure we already have, holding utilities accountable for energy costs, and ensuring that every dollar spent delivers real benefits for Californians,” added Becker.

“California utility customers are dealing with a crisis of affordability due to unprecedented increases in electricity rates driven by excessive utility spending and outsized profits,” said Matthew Freedman, Staff Attorney for The Utility Reform Network. “SB 905 would force greater performance accountability by the utilities, reign in excessive profiteering, and prioritize lowest-cost strategies for improving and operating the electrical grid."

“We’re in the middle of a real affordability crisis, and skyrocketing electricity bills are making it harder for families to get by,” said Shannon Olivieri Hovis, Chief Strategy Officer at California Environmental Voters. “This bill takes important steps to bring greater accountability and cost control to the way our electric system is managed. When utility bills keep climbing, working families are forced into impossible choices between keeping the lights on, paying rent, or buying groceries. Protecting Californians means tackling rising utility costs head-on.”

SB 905 is sponsored by The Utility Reform Network (TURN) and is supported by 350 Humboldt, California Environmental Voters, California Solar & Storage Association, Climate Action California, Climate Action Campaign, Climate Future California, Deploy Action, and Sonoma Clean Power.