Newsom Energy Plan Sparks Tug of War with Lawmakers in Final Hours of Legislative Session

Source: Los Angeles Times  |  By Hayley Smith & Melody Petersen

Amid tense, closed-door negotiations, Gov. Gavin Newsom and Democratic lawmakers have released a suite of seven bills that aim to reduce Californians’ soaring energy costs — including a controversial electricity affordability plan that critics say was substantially weakened by lobbying from utilities and will offer little real relief.

Mark Toney, executive director of The Utility Reform Network (TURN) — a consumer advocacy group — said the governor’s original electricity affordability plan included a measure that would have lowered the interest rates that utilities earn on capital investments such as transmission lines and power plants. Current policy encourages utilities to build expensive infrastructure because they get to recover the cost — plus annual interest that is typically 10.5% — through rates billed to customers. The original plan was aimed at reducing that rate through a financing technique called securitization. “It would create significant savings,” Toney said of the original proposal.