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Support for the State’s 2026 Utility Affordability and Accountability Legislative Package (Districts: All)
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Overview
The 2026 Utility Affordability and Accountability Legislative Package (Package) consists of 11 bills in the California State Senate and Assembly that aim to lower utility costs, ensure fair electricity pricing, and advance equitable and affordable energy for residents across the state. The Package provides a variety of mechanisms intended to reduce upward pressure on utility rates, strengthen oversight of utility spending and profits, improve transparency in rate-setting, and prevent costs associated with large energy users from being shifted onto residential customers. Today’s request is to direct the Chief Administrative Officer to take action that reflects the County of San Diego’s support for this Package.
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Recommendation by Chair Pro Tem Paloma Aguirre and Vice Chair Monica Montgomery Steppe:
Direct the Chief Administrative Officer to express the County of San Diego’s support for the 2026 Utility Affordability and Accountability Legislative Package consisting of: Assembly Bill 2463, State Senate Bill 905, State Senate Bill 1098, State Senate Bill 943, Assembly Bill 1761, State Senate Bill 1138, State Senate Bill 1359, Assembly Bill 2516, Assembly Bill 2493, State Senate Bill 1159, and State Senate Bill 913.
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Equity Impact Statement
The 2026 Utility Affordability and Accountability Legislative Package (Package) advances equity by addressing rising utility costs that place additional financial pressure on households already struggling with housing affordability. The U.S. Department of Housing and Urban Development defines households as housing cost-burdened when they spend more than 30 percent of their income on housing costs. In San Diego County, 38 percent of homeowners and 58 percent of renters are housing cost-burdened, according to the University of San Diego Nonprofit Institute. By strengthening oversight of investor-owned utilities, increasing transparency in rate-setting, and reducing unfair cost shifts to residential customers, the Package may help limit future utility cost increases and preserve household income, particularly for residents with the least flexibility in their monthly budgets.
Sustainability Impact Statement
The 2026 Utility Affordability and Accountability Legislative Package (Package) advances economic and environmental sustainability by strengthening oversight of utility spending, improving transparency in rate-setting, and promoting more cost-effective investments in California’s energy system. The Package also supports a clean-energy transition by improving grid planning and utilization, enabling greater participation by distributed energy resources, strengthening oversight of gas infrastructure investments, and supporting the timely development of electric-grid infrastructure.
Fiscal Impact
There is no fiscal impact associated with this action. There will be no change in net General Fund cost and no additional staff years.
Business Impact Statement
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Advisory Board Statement
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Background
Rising utility rates in California continue to increase the cost of living for millions of residents. Between 2020 and 2025, residential rates for the three largest investor-owned utilities increased at a rapid pace, far exceeding inflation: Pacific Gas and Electric Company (PG&E) rates increased by an average of 13.3% annually, Southern California Edison (SCE) by 12.3%, and San Diego Gas & Electric Company (SDG&E) by 9.1%. In December 2024, the California Public Utilities Commission (CPUC) authorized an additional 18% revenue requirement increase for SDG&E. Residents in San Diego County now pay an average of approximately $313 per month for electricity, with rates reaching $0.45/kWh-roughly 70% higher than the national average.
These affordability pressures may continue. In June 2026, SDG&E filed a request for an 8.6% rate increase beginning in 2028. If approved by the CPUC, the proposal would add an average of $22.48 per month to a typical household’s combined gas and electric bills, further increasing pressure on residents already facing some of the highest utility costs in the state. According to 2024 and 2025 CPUC reports, SDG&E maintains the highest electricity rates in the state, and utility debt in the region has increased by over $200 million since 2021, with nearly 30% of customers now qualifying for bill assistance programs.
The 2026 Utility Affordability and Accountability Legislative Package is comprised of the following State bills:
• Assembly Bill 2463 (Petrie-Norris): requires the CPUC to conduct a comprehensive, systemwide review of methodologies used to determine the cost of capital and authorized return on equity for electrical and gas corporations to bring greater consistency and ratepayer protection.
• State Senate Bill 905 (Becker): seeks to reduce shareholder profits on safety investments, expand options for low-cost public financing of capital projects, tie executive pay to reducing rate increases, and improve grid capacity.
• State Senate Bill 1098 (Perez): limits the use of balancing and memorandum accounts to bring more spending decisions into General Rate Cases, reducing unlimited corporate overspending.
• State Senate Bill 943 (Becker): directs the CPUC to develop a more equitable methodology for calculating high-voltage transmission charges and authorizes rate adjustments for industrial customers who switch to clean electricity.
• Assembly Bill 1761 (Rogers): requires the CPUC and investor-owned utilities to publicly disclose all data and methodologies used to calculate the Power Charge Indifference Adjustment (PCIA) to identify billing errors.
• State Senate Bill 1138 (Padilla): gives load-serving entities flexibility to meet up to 25% of resource adequacy obligations through short-term transactions, reducing unnecessary procurement costs passed to ratepayers.
• State Senate Bill 1359 (Stern): directs the CPUC to create a standardized methodology for forecasting gas demand to advance planning for ramping down gas storage and consumption, and protects customers from paying for avoidable gas leaks.
• Assembly Bill 2516 (Petrie-Norris): establishes the California Grid Manufacturing Initiative to aggregate demand, coordinate procurement of critical grid components, and incentivize in-state manufacturing.
• Assembly Bill 2493 (Petrie-Norris): helps prevent wasteful utility overspending by increasing independent oversight of transmission projects and enabling lower-cost alternatives instead of expensive infrastructure buildouts.
• State Senate Bill 1159 (Cabaldon): clarifies that AI systems and autonomous agents do not qualify as "persons" or "members of the public" under the California Public Records Act, thereby protecting the integrity of utility rate-setting proceedings.
• State Senate Bill 913 (Becker) strengthens grid reliability by allowing home batteries and EVs to coordinate as "virtual power plants" that sell clean energy back to the grid.
Linkage to the County of San Diego Strategic Plan
Today’s proposed action to support a package of State bills addressing utility affordability and accountability supports the Sustainability Strategic Initiative in the County of San Diego’s 2026-2031 Strategic Plan by supporting policies that reduce poverty and provide economic and environmental sustainability for all residents in the San Diego region.
Respectfully submitted,
Paloma Aguirre Monica Montgomery Steppe
Supervisor, First District Supervisor, Fourth District
Attachment(s)
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