Utility Accountability Act - SB 938

SB 938 (Min) Utility Accountability Act

Author: Senator Dave Min (District 37 – Dem)

Summary

SB 938 would prohibit utilities from using ratepayer dollars to fund political activities, promotional advertisements, and membership dues of trade associations engaged in lobbying.

Issue

As California works to end its dependence on natural gas and other fossil fuels, the current business model and shareholder profits of gas-only utilities are being threatened. These companies have responded by spending millions of ratepayer dollars on political activities that not only derail the state’s climate and public health goals, but also increase customer rates.

Although current state and federal regulations largely prohibit utilities from billing customers for costs to influence public opinion or the decisions of public officials, the lack of effective accountability mechanisms has enabled utilities to sneak these expenses into customers’ monthly bills.

California families already face the burden of high gas and electric bills — they should not have to pay for their utilities’ political influence efforts.

Solution

By defining the activities utility shareholders must pay for, setting transparency provisions to ease enforcement, and penalties to incentivize compliance, this bill will put a stop to utility misuse of customer funds. Specifically, this bill will:

1. Prohibit an electrical or gas corporation from recovering expenses for political influence activities and promotional advertising and require the CPUC to impose penalties if a utility improperly books these costs to customers

2. Prohibit recovery of membership dues to trade associations engaged in political activities

3. Require electrical or gas corporations to clearly and conspicuously disclose whether the costs of their public messaging and advertising are being paid for by shareholders or customers

4. Require electrical or gas corporations to file a publicly available annual report to make it easier to assess compliance with this bill